I think that if rents weren't such a drain, then yes, you could spend the money on other things and drive up GDP. SF currently has bad rents that are hurting the local economy. Money that just a few years ago was going to eating out, new cars, vacations, etc. is now going to a greedy landlord.
I think he is alluding that high rent leads to wealth concentration. A lot of salaried people can invest a tiny bit in a much larger variety of interests than a few wealthy, or choose to work on something less profitable while still making rent. These investments by a lot of people will at some point lead to unexpected value creations that increase GDP. At least that is the tenet of a consumer and market economy.
