Who wants a 3 hour commute? If you worked at a startup in Waterloo you'd have a 5 minute commute from your 4 bedroom to the office. You could walk to work, just as people do from their really expensive apartments in SF.
Who wants to live in Waterloo? People who enjoy living in expensive apartments in SF probably wouldn't enjoy living in a city that small. They're willing to pay high rents for a reason.
