I dont know about Palo Alto, but this is a big problem where I live in Brooklyn, and in NYC in general. When there is gray money coming into the market, prices go up. Honest earners get pushed down, and the push-down happens all the way down the chain. See the article below for more details. Of course in the Bay Area, there is an additional dynamic of restrained building which might be the bigger problem.
https://www.nytimes.com/news-event/shell-company-towers-of-s... "From Manhattan condominiums to California mansions to gentrifying neighborhoods in Brooklyn, shell companies are increasingly pervasive in the world of real estate. These articles explore the people behind the opaque deals."
NYC has quite restrained building also, almost comparable to SF. The tall stuff was mostly built long ago, and the newer stuff (E.g. Long Island City) is opposed by local politicians (Van Bramer for instance).
Otherwise why on Vernon Blvd in LIC next to high rises are there 2 story rowhouses?
LES, West Village, parts of Park Slope, LIC have historic districts (I'm forgetting many of them)
Opposed by local politicians or not, new buildings have and are going up on both sides of the east river. NYC could do a lot better, but credit where credit is do. It is doing significantly better on this front than SF.
https://www.nytimes.com/news-event/shell-company-towers-of-s... "From Manhattan condominiums to California mansions to gentrifying neighborhoods in Brooklyn, shell companies are increasingly pervasive in the world of real estate. These articles explore the people behind the opaque deals."