I wonder if the answer might be to look beyond Manhattan, where real estate costs will always make theatre a challenging prospect. Might it be possible to create an off-Broadway theatre district in Queens or Brooklyn or the Bronx or even Staten Island where costs are lower and where real estate just isn't as in demand. As long as the area had decent public transit, people would be able to get there.
It would be challenging to get people to rethink their long-entrenched theatre-going habits, but I imagine all it would take would be some productions that people want to see. If HERE WE ARE was playing in an off-Broadway space in Queens in a neighborhood that Manhattanites had never heard of, much less visited, people would absolutely be heading out there to see it.