You can’t afford Palo Alto — boo hoo, poor you.
Wake up! Palo Alto is no different than Beverly Hills, SoHo, Beacon Hill, Vale or any other high-end, blue chip community.
Market forces are working just fine. Residents made the town desirable then the prices went up. You were late to the table and priced out.
Trying to rationalize it through public services is a waste of time — public (and private) servants will happily live outside the town and commute in.
Trying to change the ordinances so that you can wiggle in through a loophole will only dilute the value of existing properties which existing homeowners will fight vigorously. They paid for exclusivity and want to keep it that way.
Good communities don’t just happen — people fight to make them that way. If you don’t have the money to buy-in in after the fight, then you should consider becoming one of the fighters.
Go somewhere else and make that place great!