If the trend holds, the ultimate winner will be M, the 14-year-old landmark growth initiative that will continue to limit new office development to 950,000-sf. Those in favor of more construction say M was introduced before the dot-com explosion and has crippled office space building in San Francisco at a time when demand far exceeds supply. Slow-growth advocates disagree, however, and their Proposition L if passed would have been far more restrictive than Proposition M in limiting growth, says Carol Piasente of the San Francisco Chamber of Commerce. Proposition L would have banned the development of any new office space in the South of Market area (SoMa), the Mission District and Potrero Hill. According to the Grubb & Ellis study, Proposition L would have allocated an additional 6.6 million sf through 2004, whereas Proposition K, the less restrictive alternative put up by Mayor Willie Brown to give voters a choice, would have provided more flexibility and allowed for 8.5 million sf.

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

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