My previous team was split between Mountain View and New York. We'd travel back and forth. Don't get me wrong: I love the Bay Area. The weather for one thing is simply heaven.
We'd often get into debates about this. My argument is that it is cheaper to live in New York than the Bay Area. The main reason for this is that almost anywhere you live in the Bay Area you will have a car. Between car payment, insurance, gas and maintenance you will more than make up for any difference in rent.
Your only real option to living without a car is to live in SF. That means an hour commute minimum each way every day (on the bus). Sometimes it can double with traffic on the 101. You have to catch them when they're running (4-6 times in the morning and evening?). Or if you don't have a bus option it's Caltrain + bus. Caltrain runs every hour during the day (slightly more often in peak hours).
Even if your bus has wifi and you can allegedly do work I'd rather not waste 2-3 hours of my life on it each day.
Compare this to New York. Areas around the office (Chelsea, Meatpacking, West/Greenwich Village, Union Square) are expensive but I still have a second story (true) one bedroom walkup 7 minutes walk from work for $2000/month.
A friend lives in Crown Heights in Brooklyn. Door to door will typically take him ~35 minutes. His one bedroom is $1000/month. How far afield are you going to have to go in SV to find a one bedroom for that price (or, worse, that price including the car cost, even adjusting for spending $100/month on a monthly metro card).
And I'd much rather rely on the Subway (or the commuter trains for that matter) than anything in Norcal (although I found the combination of BART + buses fine in SF even though I knew many people who complained about them). It's like $2.25 to go anywhere in the city and it runs 24x7.
Rent in Manhattan is certainly expensive but you don't need to live in Manhattan. You can choose to (as I have) but you don't need to. You can get a pretty nice apartment in Forest Hills and have a relatively easy run in on the E train if you wish. Williamsburg is full of hipsters but is convenient (except when the L train stops running, which seems to happen all too often).
So rent aside, everything else is the same cost of cheaper. Food especially is cheaper. A Thai restaurant around the corner has $2-6 appetizer and On the way to work there are 3-4 laundromats. The one I go to is open from 7am-11pm 7 days a week and as long as I get them my clothes before about 1-2pm will have them back the same day, washed, dried, folded and sealed for If you have a family you can stay in the city (expensive) or move to the commuter belt (as most people do). Long Island, upstate NY or NJ (or further afield at places like CT, PA) have good affordable options. If you're married and have kids you'll probably only need 1 car rather than 2 (since the trains will cover you during the week to go to work).
New York really is great. Although if I weren't working for Google I'm not sure who I'd want to work for. Foursquare? Maybe but you're essentially banking on them getting bought out (admittedly, this seems fairly likely). Tumblr? Maybe. Amazon? I think they're out of the city somewhere. Palantir? Maybe. SV certainly has got way more choice.