I would not go out of my way to live near where I work when my employer can fire me on a whim.
If the office was in a place where I could reasonably expect to find other jobs as well, then that could be part of my consideration, but I would never choose to live somewhere based primarily on whatever my current job is.
That's a good point. The office I mentioned was located in downtown Seattle, a city where jobs are plentiful and I have many connections, so moving there was an easy choice.