When density is so low outside a city's relatively tiny core, like in most American cities, it's no surprise areas with short commute times are so expensive. Maybe if we densified our cities prices wouldn't be so out of whack.
It doesn't have to be Manhattan like densities either. Many German cities, for example, are full of 4, 5, 6 story buildings. Dense enough to support frequent transit and common enough to not have astronomical rents.
Much of Manhattan is not that dense either. I mean, it's denser than most places, but a decent chunk of it is the exact type of thing you're describing -- five to six story buildings.
It doesn't have to be Manhattan like densities either. Many German cities, for example, are full of 4, 5, 6 story buildings. Dense enough to support frequent transit and common enough to not have astronomical rents.