By Tim Redmond

The good news about Mayor Ed Lee’s State of the City Speech is that he clearly, finally, understands that he can’t ignore the housing crisis. He’s got a plan, a seven-point plan, and some of it is fine and some of it is good.

The bad news is that he’s still enamored of the free market and private initiatives as a big part of the solution, and there’s abundant evidence showing that the approach hasn’t worked in the past and won’t work now.

The event was a spectacle, as these things have come to be. Not that long ago, the State of the City was a policy address at City Hall. But since Gavin Newsom turned the annual talk into a political road show, it’s become something that looks more and more like the State of the Union address, a glamorous extravaganza, in this case invite-only (with a limited press gallery), on a construction site, with people selected to stand up as examples of how great the mayor’s achievements have been.

To nobody’s surprise, Lee talked about jobs – about how the city’s unemployment rate is the lowest of any major city in the country, how his “relentless focus” on job creation has brought 42,452 new jobs to San Francisco. It’s an interesting number, and one of the things he didn’t address is how many of those jobs went to existing unemployed residents and how many went to people who moved here to take the job. That’s a critical question when you look at the impact job growth is having on the housing crisis.

But he also acknowledged that some people have become “frustrated” (a pretty mild word) with the cost of housing, and he put forward what he called an “affordability agenda.” Not that he’s ever going to back away from his first agenda – helping the private sector make money and hire people: “The creation of too many good jobs has been criticized,” he said, with tech mogul Ron Conway sitting in a prominent seat up front. “But we will never relent in our efforts to grow jobs.”(more after the jump)