We've had a number of Ph.D.s and postdocs in various subjects including CS go through Hacker School. We would be happy to have any of our residents as Hacker Schoolers if they wanted to.
So in short: you should apply to Hacker School :)
I would love to vicariously live through the experience.
The best tool we have to affect the demographics of Hacker School is outreach to specific groups, which we do a fair amount of via mailing lists, events, meetups, etc. I have a hunch that any demographic shifts from news like this will be more than offset by any active outreach work that we do.
If he wanted help/sponsorship running SF or Seattle, I'm sure he could find it, though.
I actually think Hawaii or Thailand would work -- you could get a few cheap house rentals on the big island, with minimal distractions, and do it there.
SF to Hawaii flights are $300 r/t. If it were in a place like Boulder or Utah, you might be able to get local companies/VCs to sponsor it, though.
As to why we were living in New York, I can only answer for myself, but here you go: I grew up here (city and suburbs), most of my family still lives in the area, my friends live here, and I love the energy of the city. It feels like home.