The dramatic and profound politics of the Mosser Hotel

The conversion of the Mosser Hotel to tourist use will be a huge test of the Planning Commission under Mayor Daniel Lurie.

When London Breed was mayor, she was known for telling her commissioners how to vote on key issues. If they strayed from her position, she tried to get rid of them.

Now the commissioners, three appointed by the supervisors and four appointed by Breed, will face a defining issue: Will they side with a troubled landlord group and allow the elimination of 72 rent-controlled housing groups, in a clear violation of the city’s laws? Or will at least one of the former mayor’s appointees be willing to reject the application?

This is a critical test because the rules and the data are so clear. And yet, for some unfathomable reason, the Planning Department staff is recommending that the commission side with the landlord.

The property at issue is the Mosser Hotel, at 54 4th Street. The property is owned by the Mosser family, which owns a lot of rent-controlled apartments and some hotels—and it at war with itself.

The SF Standard ran a detailed story on the family business, and pointed out that Mosser—a company founded by Charles Mosser in the 1950s—is now under the control of one of Mosser’s sons, Neveo. He has highly leveraged the company, borrowing money when interest rates were low, and now that those variable-rate loans are sucking up revenue, is facing problems with lenders.

For years, the company has been trying to turn the residential hotel units at the Mosser into tourist units. That would, in theory, bring in more revenue—although tourist hotels are nowhere near full capacity in this post-COVID era.

It might also make the property more valuable if Mosser wants to sell it to cover some of its debts.

The latest application makes clear that all the residential hotel units at the Mosser are currently vacant. That means, of course, no evictions. It also means, advocates say, that the company has apparently kept those units off the market so it will be easier to convert them.

We’re talking about 72 units of affordable, rent controlled housing, that are currently vacant. They could be rented to people who desperately need a place to live.

If the Planning Commission votes to approve this plan, it will in effect be rewarding a landlord for keeping units off the market—something the city has tried hard to prevent.

Then there’s the rule saying that landlords can’t convert SRO units into tourist hotels without a one-for-one replacement of similar units. If Mosser wanted to do that, we’re talking tens of millions of dollars, maybe more, to buy or build 72 units of SRO housing.

Instead, Mosser has come up with a very dubious deal. The company has offered to pay $3 million to the owners of the Minna Hotel, at 509 Minna Street, to convert 72 units of what were once tourist hotel rooms to SROs.

The problem is that those rooms are already operating as supportive housing for people who were formerly incarcerated. There have been no tourists in that building since 2021. There won’t be, I suspect, for a long time in the future, given the city’s contracts with the owners and the collapse of the second-level hotel market.

From a letter signed by 19 community-based organizations:

The Minna Hotel has already been operating as transitional housing since 2021. Under existing city rules the owners and operators of the Minna Hotel can apply to continue such operations without any conversions at the Mosser. The swap changes nothing at the Minna and is unnecessary for its continued operations as transitional housing.

The owners here are not “causing” any units to be brought back into the housing market because as noted above, the Minna Hotel has been operating as transitional housing since 2021. It is absurd for the owners of the Mosser to claim credit for events that occurred two years before their application and were the result of the efforts of other officials and agencies. There is no evidence showing that the 72 units at the Minna will be added back “into the housing market.” To the contrary, the units at the transitional housing facility are only offered to participants in a program operating under contract with the Probation Department. Moreover, the requirements imposed on the Minna’s present residents such as they comply with “clean and sober” policies that could not be imposed on tenants renting such units on the open market. Thus the units at the Minna are not and will not be for the foreseeable future offered on the “housing market.”

SRO tenants are protected under the city’s rent control laws once they occupy a unit for more than 30 days. Since the Mosser tenants have traditionally been long-term renters, those units were protected by rent control.

The planning staff, in the report, “assumes” the units in the Minna, the supposed replacement units, will also be under rent control. That’s quite an assumption, based on no evidence at all:

The reality is residents in many transitional housing facilities do not have tenancies that are protected under the Rent Ordinance. Residents of transitional housing also generally do not have the equivalent rights afforded to tenants in permanent affordable housing. Determining whether the present and future residents at the Minna are entitled to protections by the Rent Ordinance is an essential consideration in determining whether the units are comparable.

The Minna doesn’t fit the requirements of the existing SRO laws:

As noted in the letter submitted by the San Francisco Anti Displacement Coalition, the proposed project would convert an existing tourist hotel into ‘housing’ although the building fails to meet standards for open space and rear yards. Those existing standards are important to provide residents of SROs with access to fresh air, natural light, and space given the extremely small spaces in which they are confined. These concerns are elevated within the context of an application that seeks to convert and replace existing housing. Those seeking to convert or remove residential units in SROs should not be entitled to fulfill their obligation to replace lost units with substandard housing. Setting such a precedent could seriously undermine the RHCO.

In other words: This has no justification at all, except to allow a landlord that’s over-leveraged and in financial trouble a way to make some extra cash.

I have been following the Planning Commission for more than 40 years, and I’ve seen very few cases that were more clear than this one. None of the activists can comprehend how the planning staff recommended approval.

Approval would undermine the Residential Hotel Conversion Ordinance, reward a landlord for keeping units vacant, and make it clear that the Planning Department doesn’t care about existing city laws.

I have spoken to no commissioners, who can’t talk about pending cases anyway. But based on their records, I think it’s pretty likely that Kathrin Moore, who cares deeply about the Planning Code, and Theresa Imperial and Gilbert Williams, who have deep community roots, will vote against the conversion.

Those three were all appointed by the supervisors.

The four mayoral appointees—Lydia So, Derek Braun, Amy Campbell, and Sean McGarry— often vote together. In this case, only one has to be willing to stand up for the law and the concept of protecting affordable housing.

The Mosser folks weren’t Lurie supporters; they backed London Breed. So there’s no political reason the current mayor should be pushing them to approve this—unless he wants to argue that more tourist rooms will help downtown recovery, when there are rooms going begging today.

Oh, and the Mosser staff are not unionized, so this project would potentially take business and jobs away from the unionized hotels—which is why the hotel workers’ union, Local 2, opposes it.

If the commissioners can’t reject this, it’s hard to imagine any project, no matter how illegal and horrible, that they won’t accept.

The commission meeting starts at noon.