Abstract We study a model for the community dynamics of marine sessile organisms with space limitation both in recruitment and in growth. We consider an open population in which recruits are supplied from a pelagic pool of larvae produced by adults in distant habitats. Assumptions are: the larval settlement rate is proportional to the amount of free space and to the abundance of larvae in the water column. The growth rate of settled individuals increases with the fraction of free space within the local habitat. We study the competition between two morphotypes with different rates of recruitment, growth, and mortality. When adult mortality is low, following a major disturbance that creates bare patch, the space is quickly filled by larval recruitment and adult growth. Then the morphotype composition changes slowly and converges to the equilibrium that is strongly affected by mortality. We also examine several other limiting cases in which one of the three demographic processes occurs either very slowly or very quickly. Based on the model behavior, we discuss the possible factors responsible for the spatial variation in the morphotype composition observed in coral communities. The dominance of branching corals in protected sites can be explained by their faster growth than tabular corals. The dominance of tabular corals in exposed sites can be explained either by lower mortality or by faster recruitment than branching corals.