FORTUNE — For San Francisco Mayor Edwin Lee, protests directed at Google (GOOG) shuttles during the last six months were well-intentioned but misguided.
“I understand why those protests were [directed] at Google buses, but they didn’t make sense to me because all people were doing was trying to get to work,” explained Lee on Thursday during a one-hour discussion held at The Commonwealth Club of California, a non-partisan, non-profit organization public affairs forum. The city’s 43rd mayor began the night by tracing his 25-year-long political career serving under four mayors, including his predecessor, current California Lt. Gov. Gavin Newsom. But the focus of the discussion became the city’s transformation, driven by Silicon Valley, and rising tensions between tech and many non-tech workers over what Mayor Lee called “income gaps.”
In recent months, those same tensions have yielded protests of Google-employee commuter buses, and more recently, the Crunchies, an annual tech awards ceremony. Indeed, where areas like Palo Alto once served as Silicon Valley’s center of gravity, startups and many younger tech workers have opted to call San Francisco their home. The city’s rental market prices have soared because of it: A one-bedroom in a neighborhood like Pacific Heights or SoMa can currently command well north of $3,000 a month according to real estate site Trulia.
And more new housing is on the way. Mayor Lee outlined a seven-point housing plan this January to address the city’s housing shortage and rising real estate and rental prices. Among his goals for 2020: making the construction-building process easier, protecting residents from eviction, and adding 30,000 new homes to the market. Many of those new units will likely be priced out of reach for locals who don’t make the sort of six-figure salaries offered by Twitter (TWTR), Apple (AAPL), Facebook (FB), and countless other local tech companies and startups. But Mayor Lee reiterated he is also accelerating building permits for affordable housing and that he’s pushing for one-third of those 30,000 new units to be affordable housing units. His office is also working on doubling down-payment loan programs to aide homebuyers.
Another issue brought up was whether the city is making too many concessions for tech. In 2011, when Twitter mulled over whether to stay in San Francisco or move to Brisbane in San Mateo County, the city offered Twitter a tax break if it moved into the city’s mid-Market St., an attempt to revitalize what for years has been a rough area. To this day, it remains a prime example critics point to of Silicon Valley consuming the city, even potentially receiving preferential treatment. Mayor Lee defended the tax break incentive, pointing to San Francisco’s low 5.1% unemployment rate, down from 9.5% when he took office in 2011. “I think … the tech companies and the businesses that came onto Market [St.] contributed to that lower unemployment,” he said. “Those of you who have walked the same walk I’ve walked along Market St., we all see the difference.”
Mayor Lee confessed there’s clearly more to be done, including helping the homeless population, which numbered well over 6,400 last year according to the city’s Board of Supervisors. (“I gave myself a ‘C’ last year because I think we weren’t doing enough.”) And he knows full well the work ahead won’t be any less hard. Said Mayor Lee: “It’s never easy, but this city is worth loving.”