Are you reading "marginal" in the sense of http://en.wikipedia.org/wiki/Marginal_concepts or in the popular sense of someone on the verge of poverty?

In this particular case, the word play (intentional or not) might actually be useful in explaining the problem. The idea is that, yes, for people who make the same amount of money, a completely free market distributes housing according to their desire to live in San Francisco versus some other place. But for people who don't make the same money, desire might not even factor in the equation. For a lot of people, being displaced from their homes because they can't afford it doesn't look like a cost-benefit analysis, it looks like well... being displaced. More crudely: as being thrown into the street and told to emigrate from a place where they have lived their entire life. While some software developer who could, theoretically, work from anywhere in the world, moves to the same apartment after deciding that "well, it's pricey, but nothing I can't afford, and the weather is nice". Economically, it might be efficient, in terms of say philosophical utilitarianism, it is inefficient (more overall misery than happiness is created, the developer didn't care about living in S.F. quite as much as the previous tenant cared about not being kicked out).

Not saying current rent control policies and development policies in S.F. are optimal (in the colloquial sense, economic sense or utilitarian sense), or that more housing in general should not be encouraged somehow. But the option of having zero rent control and letting the invisible hand of the market shove tens of thousands of people into the streets seems like a pretty bad solution, in addition to being a particularly callous one.

In this case, those on the verge of poverty would also be marginal in the technical sense because a given price rise would cause them to choose to leave whereas those with more money might choose to stay because it's an easier choice.

The GP make simple and correct point - those with more money can wind-up choosing to buy something they "don't want that much" while those with less money overall money forgone things they very much want since they also need to eat.

I understand your point. I think in this case, the author is talking about a scenario where the price of rent in San Francisco drops dramatically to where it is no more expensive than anywhere else relative to the opportunities.

At which point, even people who would find themselves priced out of SF in today's market would already have moved to the city if they wanted to.