I "insist" on living in the city of San Francisco, but because I grew up in the area (Santa Cruz) and really hate suburbs and commuting, and my job is here in the city.
So my commute, usually by bicycle, is around 20 mins, and I am surrounded by things to do everywhere I look. Also, a lot of my friends are here. This is why I stay here.
I am in a rent-controlled apartment, though it had been bumped up to "market rate" about 5 or 6 years ago when I moved into it, so I'm paying $1600/month for a small one-bedroom with no parking or storage. I know that would easily pay the mortgage for a decent sized house in a lot of other parts of the country. But I am not so sure I would trade living in San Francisco for that. Also, I don't have children and probably never will (almost 50), so that's not as much of an issue. I also live right by Golden Gate Park, so I have a "backyard" of sorts.
Of course, should the economy turn sour as it has 3 times in my Software Development career, I might have to stop "insisting" and do what I've done before - go mobile, go to wherever there is work. I'm ready and willing to do that, though I hope that my current job will remain stable; it's in an industry that is not as effected by the economy as some others (medical services/supplies), so I might not have to worry as much. Many of the people here are here, I believe, because of this stability (tho' most have kids and commute in to work). It doesn't attract the "best and the brightest", which makes me a bit sad because I would like to see better quality work being done, and I surely do regret the fact that I didn't apply for (or applied for and didn't get) jobs at the places that look like they're doing fantastically and their early employees are getting rich... but a job until retirement (hopefully not too old) that provides good bennies and is on a good product, working with nice people, at a decent, liveable salary for the area, is what I'm looking for mostly now. I've given up my dreams of vast bucks from elevated titles or stock options.