He (and Sam Altman for all YC companies) should have the startup(s) all de-locate to the same town that's within driving distance of the Silicon Valley. I bet you could convince a lot of tech people to move to Santa Cruz or Monterey. You could also recruit from UC Santa Cruz and Cal Poly. Both downtown Santa Cruz and downtown Monterey feel pretty small town urban-y. Plus the Silicon Valley VC's can play golf at Pebbl…
That would fix things for a few years at best, and then it would likely end up even more expensive than the bay area.
Going north, you could head toward Rohnert Park/Sonoma. SamA and PG will just need to get in the car a bit more instead of taking Caltrain/BART.