Earlier quoted context omitted.
The Bay Area is fundamentally broken in that cities refuse to build new housing and schools. Supply is limited, demand exceeds supply, and engineers are competing against each other for that very limited supply. So if all us engineers' salaries went up, it wouldn't help. We'd just end up spending even more to out compete each other. (Well, I guess it would help push non-engineers out of the Bay Area, but is that real…
If there is nowhere to house new engineers, why do companies apply for H1-B?
I'd guess the answer is, marginally, hiring people is still good for companies. But combined with the lack of housing development, it's slowly but steadily making life worse for everyone in the Bay Area who doesn't yet own a house.
If it continues this way, eventually people won't move here without ridiculously high salary offers, and companies will be forced to expand in cheaper cities instead.