I have never understood how people with median household incomes afford anything in the city.

For instance, the image someone else already linked shows even the lowest rents at almost $2k: http://sfist.com/attachments/SFist_Brock/SF-Infographic.png

Yet the OP shows several downtown stops, like Powell St. and Civic Center as having less than $24k of income. That is, the average income is less than the average annual rent.

I have no idea how that possibly works.

It possibly doesn't: those people may move in, stay a while, start failing to pay the rent, and then move out/get evicted.

Alternately, they might be getting unmarked income from relatives.

I wonder if it would look different if you excluded long-time residents who bought in decades ago, when real-estate prices were much lower. E.g. what's the median income of a household that moved to Atherton in the past 20 years?

200K income, you can easily afford to allocate 25% of that to a mortgage interest (plus 10% for principal, taxes, etc), $50K/year

3.5% mortgage -> 50K/yr * 100% / 3.5%/yr = $1.5M house price

interest rates are so low these days, you can spend 50% more on principal for the same interest, compared to 2006 when rates were ~6.25%.

$1.5M doesn't really buy a lot of house in Atherton, at least more than a block or two from El Camino Real.

In going from $200K*0.25 = $50K, you forgot about personal income tax.

And houses here cost more than $1.5M.

(Side note: I was surprised to learn that private schools around here are $30K+/year!)