I think basic income is a bad idea, but if you liberated people from seeking jobs, many of them wouldn't live in overcrowded cities. If rent is too high in the bay area, you'd go live in Madison, Wisconsin. Or in a pre-fab house in the middle of nowhere.
In the context of a thought experiment, where people would live is an interesting question. There are certainly many places today that are inexpensive in no small part because there are few jobs. It doesn't have to be in the middle of nowhere. Detroit qualifies too. On the other hand, moving somewhere cheaper would imply moving away from existing family and social support structures.
However, I suspect a lot of the people who are championing basic income are implicitly envisioning living in a relatively comfortable apartment in the Bay area from which they can follow their muse--not public housing in Detroit.
