Well that's a bit out of context and a bit summarized and so I can see is misleading. The concept of Y Combinator means people need to travel to where Y Combinator is. So us founders had to pack up bags and move to the valley to participate in this program. We all had pretty established lives here in Chicago.
One requirement was we had to find a place where we could have a dog, since a founder already had a dog and we couldn't get rid of the dog! :)
So the best place we could find was a house for the three of us in San Jose. We definitely ate cheap food and used cheap hosting and had cheap everything. We even used 3 imacs that were donated to us by someone from Apple.
But rent in California is a tough one, but something we needed to get through for our participation in Y Combinator. Which was totally worth the experience.