Lofts are live/work units originally designed with artists in mind. They have become one of the most hated forms of development among slow-growth activists, however, who say many of the existing lofts are being used as office space for dot-com companies. Conversely, they are loved by their developers, in part because they are exempt from some of the fees associated with pure residential construction projects such as school fees and affordable housing requirements.

Joe O'Donoghue, head of the Residential Builders Association and a staunch supporter of the lofts, has fought the ban on loft developments for years. Still, he's not too unhappy with the moratorium, which he says will only stall demand and eventually drive up the cost of the properties, thus putting more money in his members' pocketbooks.

Loft construction has exploded in the South of Market area, on Potrero Hill and in the Mission District. City officials have approved around 3,000 loft units in the past four years, including more than 1,000 during the past year alone.