I've met tenured computer science professors at UC Santa Barbara who couldn't afford to live in Santa Barbara. That place is nuts. Similar situation with Stanford and Palo Alto.
I believe this is a misinterpretation of a news story about Palo Alto considering subsidizing housing for households making under $250k. It is not the poverty threshold, it is just a hypothetical cutoff for qualifying for housing subsidization in one housing plan that Palo Alto considered.
Makes sense if you let the locals control zoning decisions, if you have a house in your nice quaint suburb and are extremely selfish you probably would try to block condo developments.