In this case, the SF Bay Area economy is so strong that it has driven housing prices way up in the past two decades. There is no vacant land left to build on, so more high density multi-unit dwellings are being built but they are still very pricey.
Despite your ideological blinders, not everything is about a rapacious government.
Look at NYC.
The average California family has an income of $63k. The average individual who draws a paycheck from the State of California is $93k. Most are unskilled and clerical. Their pension is heavily underfunded, and their union dues fund virtually every campaign in Sacramento. 1% of our families pay 50% of our income tax. Illegals without a SSN, can get an Individual Tax ID and receive thousands of dollars a year in cash with no proof of income.
What is not to like? Waste, greed, lack of ethics, it would make a great mini-series.