Correlation between salary level and housing prices in a town Is there a measurable correlation in a town between salary level and housing prices?

Or, to put it differently: is it politically meaningful to drive up salaries by new investments if the result is unaffordable housing?

UPDATE: I do not want to edit the original question as others wrote their reply with that in mind, but it is right to suggest that it would have been better to ask about causality, not correlation.
The graph below plots average house prices against average incomes for various US cities. The relationship is strong in the cross-section, especially if you ignore Honolulu.



Richard Florida, Housing and the Crisis, Part IV

Is it also true dynamically, that is, are changes in income associated with changes in house prices (not just levels)? Van Nieuwerburgh and Weill (2010) say yes:


  We set up and solve a spatial, dynamic equilibrium model of the
  housing market based on two main assumptions: households with
  heterogenous abilities flow in and out metropolitan areas in response
  to local wage shocks, and the housing supply cannot adjust instantly
  because of regulatory constraints. In our equilibrium, house prices
  compensate for cross-sectional productivity differences. We increase
  productivity dispersion in the calibrated model in order to match the
  30-year increase in cross-sectional wage dispersion that we document
  based on metropolitan-level data. We show that the model
  quantitatively matches the observed 30-year increase in dispersion of
  house prices across US metropolitan areas. It is consistent with
  several other features of the cross-sectional distribution of house
  prices and wages.


Why Has House Price Dispersion Gone Up?