Rent is crazy in the bay area, and I don't think it has ever been worse. $700/month in San Francisco in 2012 is not possible unless you have some amazing connections, roommates, live in a questionable area, or some combination of those. Just look at craigslist to get an idea of what's happening here right now.
But the "bay area" is huge and so you can find ways to make it work. You can live out in Pittsburg/Antioch/Vallejo (north east bay) for pretty cheap. Those are higher crime areas too. Still at least double midwest rent, but cheap for the area. The BART goes out to Pittsburg now, so you can get to the city relatively easily (though not cheaply, unfortunately. It'll be at least $12 roundtrip.) And those are not really bikeable to cool things.
If you want fun and adventure with a bike I'd suggest Berkeley, Oakland, or SF. Roommates make for good stories later, right?