Sounds like you've got some experience with this - are there any particular places you'd recommend? When I was an intern in SF (2011), I lived in Glen Park, which was a half/hour bike ride/couple of BART stops away from work, and I ended up paying slightly over $1,100. I had friends that went and found more distant housing, but we didn't see them all that much/they didn't get nearly as much out of the summer as we did, beyond their company.
A lot (most?) internship salaries include a $1,000 housing stipend, so it ends up being not all that crazy; neither of my internships had more than 25% of income go to housing.
Can you speak to your experience in particular? I haven't met a lot of people who followed your strategy, but I'd love to incorporate the perspective of somebody who did.