If the trend holds, the ultimate winner will be M, the14-year-old landmark growth initiative that will continue to limitnew office development to 950,000-sf. Those in favor of moreconstruction say M was introduced before the dot-com explosion andhas crippled office space building in San Francisco at a time whendemand far exceeds supply. Slow-growth advocates disagree, however,and their Proposition L if passed would have been far morerestrictive than Proposition M in limiting growth, says CarolPiasente of the San Francisco Chamber of Commerce. Proposition Lwould have banned the development of any new office space in theSouth of Market area (SoMa), the Mission District and Potrero Hill.According to the Grubb & Ellis study, Proposition L would haveallocated an additional 6.6 million sf through 2004, whereasProposition K, the less restrictive alternative put up by MayorWillie Brown to give voters a choice, would have provided moreflexibility and allowed for 8.5 million sf.

Given that both measures failed on the ballot, Proposition M'scap on office space will remain, says P.J. Johnston, a spokespersonfor Mayor Willie Brown. There is the potential to put a new measureon the ballot in early 2001, but Johnston predicts that any newpropositions mirroring the current ones will only fail. Suggestedmodifications to Proposition M include creating an additional 6million sf of office space over the next 4 years and allowing 3million sf of projects in the planning stage to move forward.Proposition M reform activists also want to ensure adequate roomfor arts organizations and nonprofits that cannot afford theskyrocketing rents.

By maintaining Proposition M, the Grubb & Ellis study foundthat with a good economy, overall vacancy rates would decrease toabout 4.5% through 2005. However, under Proposition K, the vacancyrate would increase to at least 11% while Proposition L wouldlikely increase the vacancy rate to 7%. According to the study, 10%is a healthy rate.