AIDS Healthcare Foundation settles class-action tenant case over squalid living conditions

The nonprofit AIDS Healthcare Foundation will pay current and former tenants of a Skid Row residential hotel $575,000 to resolve a long-running class-action lawsuit over conditions at its property.

Residents of the Madison Hotel alleged pervasive problems within the building, including mold, vermin, plumbing and electrical issues that they said the foundation has failed to fix.

The case was filed in Los Angeles County Superior Court in 2020 and the settlement was reached Monday when the trial was scheduled to begin. A series of rulings from Judge William F. Highberger had narrowed the tenants’ claims to conditions in the building’s common areas. Most of the roughly 200 residents in the century-old, single-room occupancy hotel share bathroom facilities on each floor.

Jennifer Kramer, an attorney representing the tenants, did not respond to a request for comment. Representatives for the foundation could not immediately be reached for comment.

Besides the financial settlement, the agreement reached Monday requires the foundation to consult with experts and receive training on maintenance and management issues at the Madison. The foundation also agreed to hire a consultant to assess the building’s elevator.

Last year, the foundation paid at least $832,000 to settle a separate lawsuit from elderly and disabled tenants at the Madison who alleged they were stuck in their apartments or had to sleep in the lobby because of the elevator’s failures. Since the settlement, the elevator has continued to malfunction.

The Madison was the first property the foundation purchased in 2017 as part of its efforts to address homelessness and housing affordability in Skid Row and across California.

The nonprofit, which received $2.5 billion in revenue last year largely from its chain of pharmacies, has since acquired more than a dozen underused low-income buildings in Los Angeles and worked to renovate them and lease rooms to tenants.

A Times investigation last year found that many of the foundation’s more than 1,300 residents live in squalid conditions with dozens under the threat of eviction.

The foundation still faces multiple lawsuits from tenants over conditions at the Madison and elsewhere.

The foundation is involved in multiple initiatives on the November statewide ballot. It’s sponsoring Proposition 33, which would expand rent control in California after two similar initiatives failed in 2018 and 2020. It’s also defending itself against Proposition 34, a measure financed by the California Apartment Assn., the foundation’s opponents in the rent control fight. If passed, Prop. 34 would effectively ban the foundation from funding political and housing campaigns.