Unfortunately rent in the area is kind of high. My husband is a Caltech grad and we pay about $1000 a month for a decent 1-bedroom, which is a good deal for a nice, well-kept place. Granted, part of the reason for the rent being so low is that you have to have really good credit to be approved. We do rent from an individual who owns the building. You might have a hard time finding a larger company with low rent in Pasadena. Most of what I've seen for anything bigger than a studio is in the $1600+ range with not too much on the low end of that. Sorry!
As far as getting to Caltech, there is a decent bus system, though you could walk if you lived close enough. It really just depends on where you end up renting. You might also consider living in Los Angeles and taking the metro in, but Pasadena is a really nice city and generally very safe as well.