Relatively cheap housing can be found if you live in bad, uncool and/or inconvenient neighborhoods. I just looked at a number of < $1500 apartments in Oakland (1200+ sq feet). In-law apartments in the outer Sunset and outer Richmond can be found for less than $1500. If you are buying, it seems like Alameda is where all the non rich engineers I know end up moving.
I'm somewhat shocked at the crime stories on my facebook feed (armed robbery, car break-ins, etc.). I never experienced that when I lived in Atlanta or outside of DC. The difference is made because here my friends are forced to move into bad neighborhoods because the cost of living is too high. In Atlanta, you can afford something nice where your chance of having a weapon pointed at you is low. Here, startup employees are moving to places like Oakland, the Tenderloin, and East Palo Alto that aren't safe.
Citation, please. Cheap housing in the Bay Area is like $500/mo to share a 7x5 laundry room.
http://www.sfgate.com/realestate/article/Startup-dreams-meet...