why if you go to a city 5000 feet above the level of the sea increase hematocrit

As the questions states, you encounter hypoxia in high altitudes. There are lots of receptors in the body that respond to oxygen level. Hypoxia means there is less oxygen reaching the kidney which stimulates the kidneys to secrete erythropoietin. Erythropoietin binds to receptors in bone marrow that stimulate erythrocyte production. This increase in production leads to increased hematocrit, which should restore oxygen levels and turn off the reflex by negative feedback.

If you search for "The feedback relationship between hypoxaemia and erythropoietin production" on google images, you can find some good diagrams for this.