It seems they keep getting pushed out of the communities by people willing to pay higher rent. I read about one woman who had rented in the same place for seven years, and then got a rent increase of $3,000. and they tacked on an additional couple thousand to her security that she was going to have to come up with. She couldn't do it and was having to find a new place to live and there was just nothing in the neighborhood in her price range any longer. People have jobs in the locations, and moving out of the area with long commutes cut into their income. It also causes a lack of employees in the areas that they leave. Baristas, servers, CNAs, etc.. can't afford to commute long distances in these cities so there's a lack of employees for service industry positions. Also, coming up with first, last, and deposit, while your paying rent where you're at, is kinda tough for some folks so they do what they feel is their only choice at the time. I know of someone who was living in one room shack with dirt flooring, and no indoor plumbing, and it's the 21st century. They were living within their means.
I kind of think they hope the warehouses will turn into something like you are talking about, however, the sub-letters/owners just don't share their optimism.
Toward the end of the interview, this young lady kind of describes what it is like finding housing,
http://www.nbcbayarea.com/news/local/Oakland-Warehouse-Fire-Survivors-404827066.html
And this fella describes where he's lived and why:
http://www.nbcbayarea.com/news/loca...nverted-Warehouses-in-San-Jose-405157435.html