I don't normally respond to anonymous cowards, but since the point of the original comment was to combat populist ignorance, I'll bite.
I am well aware of the geographic limitations San Francisco has, and you're right that it does exacerbate the problem. But that puts all the more pressure on the levers that the citizens of SF do control. It is not "blanketed in buildings" because the city has made it impossible to either expand or renovate existing housing for anyone except the most determined developers, and the cost of navigating that process raises the likelihood that they are going to cater to the high end rather than the middle, since your margins on building 1,000 middle class condos are smaller than they are on building 1,000 luxury condos.
Between June 2012 and June 2013, San Francisco added about 25,000 new jobs, making it the second strongest labor market in the country - but it added only 2,548 new housing units. There are instances where new construction can increase property values, but all else being equal, if you improve demand by 25,000 units and supply by 2,548 units, the inevitable result is an increase in cost as more people compete for fewer resources.
This isn't some nefarious plot, either. The very moment anybody DOES pay to buy a place in San Francisco, their very next move is to join the chorus of NIMBY that prevents exactly the type of expansion in supply that the area needs to reduce housing costs. And that's the issue: the things that need to happen if you want to bring down housing costs are by and large unpleasant things if you are already an owner, because they are turning into a commodity something that was heretofore a precious resource. You see this in Austin, too. Everyone in Austin knows that the infrastructure sucks. But any 'nice' neighborhood fights tooth and nail to keep TxDot from expanding highways and roads because they're terrified their property values will suffer. They feel like they bought their piece of the hill country ten years ago or twenty years ago and now tens of thousands of people want in. I get that, but you can't have it both ways.
Austin certainly does benefit from not being on a peninsula, but that has not stopped the environmental movement from trying to restrict land use in some of the same ways that they have in San Francisco. A large part of South Austin is an aquafier and parts of it are federally protected. The battle in Austin's case resulted in a series of compromises, but had the environmentalists had their way entirely, there would be tens of thousands of fewer housing units in Austin and real estate would be closer to San Francisco.
I'm sure SF is more 'desirable' in one sense - it has a cool factor and arguably better weather that Austin probably doesn't, but that's just punting the issue. "Desirability" does not make SF's median home price five times Austin's. There is a very real and concerted effort among the residents of San Francisco to keep the housing market small. The only unique thing about them is that they have been more successful there because the politics of the place are more receptive to certain NIMBY arguments and anything that threatens the 'character' of their beloved city. So it's natural that they'd anoint Google and Facebook as the villains, because if you aren't willing to do anything about supply, you don't have much choice except to blame the engines of demand - as if the trouble here is not the 2,548 housing units, but the 25,000 jobs. How dare those companies expand and hire people!
This is all basic economics. If you want more of something, make it cheaper. If you want something to be cheaper, you add incentives or eliminate barriers. San Francisco has fewer incentives and more barriers than almost any city in the country. Some of them (as the article below indicates) make sense: there is certainly a point at which a building's historical value outweighs an increase in housing supply, and there are definitely parts of town where building skyscrapers would be an awful idea. But SF's position on this continuum is extreme.
Some more information: http://www.sfgate.com/opinion/openforum/article/How-to-make-SF-housing-more-affordable-4590271.php
Finally, please understand that I am not advocating that San Francisco change its ways. I am only observing that its housing prices are a direct and inevitable result of the decisions of its citizens and elected representatives, and it requires a level of willful ignorance to blame tech companies as the cause of this problem. Other cities would kill to have Google and Facebook in their backyard. San Francisco is a really awesome and special place - but not awesome and special enough for me to pay five times as much to live there. The only thing that bothers me about all this is that everyone is somehow surprised that this is the result of extreme NIMBY, just like everyone in Austin is surprised that they didn't build roads for two decades - they thought 'if we don't build it, people won't come.' They were wrong in San Francisco and they were wrong in Austin.