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SF Rent Board commissioner threatens low-income Tenderloin tenants with rent hikes

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The exterior of 285 Turk St. is shown on Thursday, September 14th, 2017. (Mira Laing/Special to S.F. Examiner)
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Valerie Morco was visiting family in the Philippines last January when she received a frantic phone call from her son informing her of a 70 percent rent increase notice at the Tenderloin apartment they have shared for almost two decades.

“I was like, ‘Oh, no, that’s too much. That’s unfair,’” the 76-year-old recalled.

The mother-and-son duo are two of at least 20 long-term tenants slapped with a series of rent hikes after their 42-unit apartment complex at 285 Turk St. was acquired by Mosser Companies in 2016. The increases, ranging from 5 to 25 percent, are set to go into effect Oct.1, and will likely force the tight-knit community of largely immigrant, senior, disabled and low-income tenants out of their homes.

But the source of the rent hikes has infuriated tenant advocates even more than usual.

The building’s landlord Neveo Mosser, head of Mosser Companies (and son of the late real estate investor and hotel mogul Charles W. Mosser), has served as alternate landlord commissioner on The City’s Rent Board. The Rent Board is charged with enforcing rent control and mediating tenant and landlord conflicts, among other things.

Mosser was appointed by former Mayor Willie Brown in 1996, and is set to term out in September 2018. He also sits on the Board of Directors of the Tenderloin Museum.

“He’s supposed to be on the board that oversees mediating grievances such as unlawful rent increases [and] here he is implementing this disastrous increase,” said Shaniece Valencia, a community organizer with Hospitality House, who has been assisting the tenants in fighting the their rent increases.

The 70 percent increase issued in January followed an initial 10 percent increase for all tenants three months after Mosser acquired the building, but was rescinded after the tenants penned a letter to Mosser with the help of tenant advocates.

Last summer, however, the tenants were issued a new round of increases, based on the length of their tenancies at 285 Turk St. and their original rents, which will become effective next month. Some of the tenants said that even a 5 percent increase could put them out of their homes and in some cases, on the streets.

“One scary thing would be being homeless. I could be homeless, if I can’t find anything,” said 63-year-old Mauro Tumbocon, who has lived in the building for 11 years and works for a nonprofit feeding the homeless.

On Oct. 1, Tumbocon will face a 25 percent rent increase, setting his rent at $1,375 — more than half of his monthly income. “I don’t think I can afford that,” he said.

Teresita Cruz, 40, has also lived at 285 Turk St. for 11 years, along with her 9-year-old daughter. Cruz is a widow and suffers from Sciatica — for years, she has been unable to work. The initial 10 percent rent hike on Jun 1 set her rent at $1,085, but come October she will likely pay almost $1,200, which she said is “too high for me.”

In a phone conversation with the San Francisco Examiner, Mosser declined to comment on the details of the rent increases but said that his representatives are “currently working with the building residents on a one-on-one basis and as a group to find an amicable resolution for the parties.”

“I’m looking forward to meeting with the group next week if that can be arranged,” he said. “In the meantime, these rent increases have been rescinded or [are] in the process of being rescinded.”

The increases, however, are entirely legal, and shed light on a little-known loophole in The City’s rent control ordinance.

That ordinance is meant to protect San Francisco tenants from unfair rent increases and displacement by allowing landlords to only raise rents by a set amount each year. The current rate is an annual 2.2 percent, and is applicable to most of The City’s buildings constructed before June 13, 1979, with a few exceptions.

“There is [an] exemption that can be petitioned for by a landlord who does so much work to a property that it’s kind of like new construction,” said Robert Collins, executive director of the San Francisco Rent Board. A condition for the exemption is that a landlord must have invested some 75 percent of the cost of new construction in the renovations.

Valerie Morco walks through her home at 285 Turk Street in San Francisco’s Tenderloin District Wednesday, September 13, 2017. (Jessica Christian/S.F. Examiner)

The idea behind the exemption, called Substantive Rehabilitation, was to “incentivise [landlords] to work on dilapidated buildings to bring them back into the housing stock” and is “not very common,” said Collins. Such exemptions are rare — the last was granted in 2006 — and only 41 buildings throughout The City are logged as exempt with the Rent Board.

“It’s incredibly disappointing that Mosser, who is a landlord and knows all the rules and laws inside and out, is taking advantage of this loophole in our rent control ordinance to raise the rent on these working class families in the Tenderloin,” Supervisor Jane Kim said, whose district includes the Tenderloin.

Advocates organizing with the tenants to negotiate with Mosser also allege that he was aware of the exemption and that it was a motivation behind the building’s acquisition by Mosser Companies.

“They blatantly said they bought [the] building because they knew that they could jack up the prices. They said it in a diplomatic way, that they knew it wasn’t rent control,” said Valencia.

Apart from suspending the October rent increase, the tenants are asking to be treated as rent control tenants, with rent increases of no more than 2.2 percent.

As CEO of Mosser Companies, Mosser manages a portfolio of apartments, hotels, commercial property, restaurants and music studios throughout San Francisco, according the company’s website.

Mosser’s resume includes prior tenant conflicts. In 2002, Mosser was sued by The City for failure to pay back taxes and for allegedly denying guests at Mosser family-owned Single Room Occupancy hotels tenant protection by forcing them to move out every 28 days, though in 2005 a San Francisco Superior Court judge ruled in Mosser’s favor.

Several tenants have moved out of 285 Turk St. voluntarily ahead of the increases, according to those who remain, and vacant units are undergoing extensive renovations.

On Thursday, a remodeled unit at 285 Turk St. was listed on apartment rental site Hotpads.com for $1,995.

Apart from a few months that Morco spent in the Philippines following the death of her husband in 2008, she has lived at 285 Turk St. since the couple and their son immigrated to San Francisco in 1999.

“It’s more than a house, it’s home,” said Morca, a former Certified Nurse Assistant, about her modest but lovingly decorated studio apartment.

Like each of the tenants interviewed by the San Francisco Examiner, Morco believed 285 Turk St., which was built in 1923, to fall under The City’s rent control protections.

“We thought it was a rent controlled building because we were treated like a rent control building by the previous owner,” said Tumbocon.

Another tenant, Aneke Herawati, said she was told that the building was rent-controlled by the former landlord when she moved in seven years ago.

Despite Mosser’s claims that the rent hikes are being rescinded, tenants said they have not heard a response to their request to suspend the impending Oct. 1 rent hikes and to meet with Mosser as a group, rather than individually.

“A big group is much better than a few,” Morco said. “I’m hoping that more tenants will get involved in this. For this kind of problem, you have to face it.”

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