We definitely tried to keep the estimates reasonable. For SF we've found that a lot of companies prefer onshore, albeit out of state, for staffing their support.
We've stayed on the peninsula and done our best to raise productivity (and thus comp) through training, retention, and technology. Wasn't easy but working well now.
I'm based out of a fairly cosmopolitan southern city, and I'd be hard pressed to construct a scenario where I could only find someone so unprofessional and conservative enough as to make a difference to the customer.
Maybe it's living in the south (where my social views tend to put me in the minority and hence used to dealing with ideological disagreements daily), but SF in particular seems pretty intolerant of the idea that lovely people might also happen to have different social opinions.
We've got 50+ people in the South (GA,SC,NC,FL), so I'm only calling it as I see it, not as I'm doing.