The California Apartment Association is the nation’s largest statewide trade group representing owners, investors, developers, managers, and suppliers of rental homes and apartment communities. The association represents over 60,000 owners and industry professionals who operate over a million units in the state.
Beyond representing the interests of its thousands of members, CAA recognizes its ethical duties to the communities it serves and insists on upholding the utmost integrity in the rental housing field. CAA upholds its ethical duty to the communities it serves through adherence to a Code of Ethics, Code for Equal Housing, and Resident Bill of Rights. A commitment to providing safe rental housing opportunities is a common theme:
- Rule 1 of the Code of Ethics commits CAA’s members to complying with applicable laws and regulations.
- Rule 6 of the Code of Ethics commands that rental housing professionals shall act to better the communities of which they are a part.
- Rule 1 of the Code for Equal Housing commits CAA members to offering housing to all persons on an equal basis.
- Points 1 and 3 of the Resident Bill of Rights recognize the right of residents to be treated fairly when living in a rental residence and the right of residents to receive a prompt response to requests for repairs.
CAA adheres to these commitments because every person deserves to be treated with dignity and respect. But these commitments also protect the reputation and integrity of the rental housing industry. The idiom “you are only as strong as your weakest link” rings true in this regard: Rental housing providers who mistreat their residents denigrate the reputation of the rental housing industry as a whole. Further, it is important to ensure that new entrants into the industry are as committed to these principles as existing ones. For example, serious discussions are underway calling for health care providers to expand into the rental housing industry aggressive. This represents a potential opportunity to help improve housing availability in California. But it also poses risks for the rental housing industry. Many, if not most, health care providers have access to a major revenue source due to a government program known as 340B, which allows them to purchase heavily discounted prescription drugs that can then be marked up and resold.
Today, healthcare providers can spend these profits any way they see fit — including the purchase of rental housing. However, unlike most rental housing providers who rely on residents’ rent payments to make ends meet, healthcare providers can also count on continued revenues through the 340B program to keep their operations afloat. This stands to make them potentially less responsive to their residents — and potentially less committed to CAA’s Codes of Ethics and Equal Housing, and Resident Bill of Rights.
This is where the Protect Patients Now Act comes. This ballot measure, which CAA is supporting, would ensure that the healthcare providers with the worst track records as rental property providers re-prioritize their focus on their primary mission—providing healthcare. It would provide additional safeguards on in-state healthcare spending to expand patient care and strengthen the reputational and integrity standards of the rental housing industry. The Protect Patients Now Act would give healthcare providers the benefit of the doubt: It would only kick in once a healthcare provider has invested heavily in non-direct patient care (over $100 million in a 10-year period) and has run up an egregious record of violating resident health and safety rules as a rental property professional (at least 500 high-severity health and safety violations). Only when a healthcare provider crosses these thresholds would the Protect Patients Now Act impose requirements that would protect residents and the integrity of the rental housing industry.
CAA is involved in this work because there is a documented connection between housing insecurity and health outcomes. When healthcare providers use 340B revenues to enter the rental housing industry but then endanger public health by operating their properties in a severely dangerous, inhumane way, they undermine the intent of the 340B program. They also harm residents and give the entire rental housing industry a black eye. The Protect Patients Now Act would increase accountability over healthcare providers that have used those revenues to harm public health — and do so in a manner that would protect residents and the rental housing industry’s integrity.
The Protect Patients Now Act would provide tools to ensure taxpayer funding that’s intended to improve public health isn’t redirected toward harming public health through substandard housing. And it would protect the reputation and integrity of all other rental housing professionals who commit themselves to ethical, fair, and humane treatment of their residents. In the coming weeks, CAA will provide details on how you can support the Protect Patients Now Act.