Affordable housing for the middle class

In my readings today, I came across an interesting article on affordable housing proposals for Palo Alto, CA.

The City Council voted to study housing subsidies for the middle class, defined as families earning $150-$250k per year.  The target area would be downtown units where people could be car-free as they would be near transit along with mixed use retail and residential development.

I was floored by the difference in median income between Bend, Oregon and Palo Alto, CA.  It is crazy that people earning that much money cannot afford housing and represents the extreme of our housing shortage situation.  I have pasted the link to the article below.  It seems like everywhere I read real estate news, they are talking about the housing shortage and affordability. 

Here is the link:

http://sanfrancisco.cbslocal.com/2016/03/22/250k-per-year-salary-could-qualify-for-subsidized-housing-under-new-palo-alto-plan/