Prop I is a temporary (18 month) moratorium in one neighborhood (the Mission), for only a limited subset of projects, coupled with the requirement that the city has to create a "neighborbood stabilization plan" by the end of that period [1].
It is not a "moratorium on building new market-rate housing", as you say.
The idea is that the Mission is undergoing a land-grab by speculators, that poor people are losing (they are), and that the battle will be over by the time a coherent plan is formulated to do anything about it. Whether or not you believe this to be the correct approach, it does nobody any good to mischaracterize it as something that is obviously and painfully stupid.
I realize it's not at all fashionable on HN to point out that life is more complicated than chapter one, paragraph one of a high-school economics textbook...but prop I might actually be a good idea over here in the real world, where actual poor people are being evicted from the only places they can afford in the city, at alarming rates.
[1] http://ballotpedia.org/City_of_San_Francisco_Mission_Distric...