Hospitals Are Cashing In on Real Estate

Nonprofit hospital chains are buying up billions of dollars’ worth of real estate across the US, dodging property taxes using their charity status.

A sign points to areas on the University of Pittsburgh Medic

The University of Pittsburgh Medical Center campus in Pittsburgh, Pennsylvania, on February 9, 2008. (Kevin Lorenzi / Bloomberg via Getty Images)


Nonprofit hospital chains are buying up billions of dollars’ worth of real estate around the country, milking them for income while using their charity status to avoid paying property taxes that fund schools, emergency departments, and other community services. Using their taxpayer-subsidized fortunes, some hospitals are trying to influence local elections in which their profits could be at stake — including a new effort to unseat a progressive mayor who’s cracking down on a hospital giant’s tax-exempt real estate empire.

Nonprofit hospitals are exempt from paying most federal, state, and local taxes in exchange for providing free or discounted medical care, along with other charitable acts like substance abuse treatment programs. But many of these medical centers are using only a fraction of their tax breaks on charitable care and are instead spending millions or billions on assets like real estate.

Once these properties are incorporated into the nonprofit organization, they are no longer subject to property taxes. It’s a practice that many argue is an abuse of hospitals’ tax-exempt status, stripping tax revenue that local governments use to pay for a wide range of services.

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