Strong government support and well-planned strategies for connecting skilled workers with employment opportunities close to home are key to unlocking housing affordability and improving urban productivity, a new study reveals.

The recent Australian Housing and Urban Research Institute (AHURI) report, conducted by researchers from the University of Sydney, says partnerships between all three levels of government are crucial in driving economic growth – but specific strategies to ensure rental accommodation remains affordable and accessible to low-income households must still be implemented.

The great mismatch

According to the research, a “mismatch” exists between the location of jobs and availability of affordable housing for low-wage earners in both Sydney and Melbourne. The report adds that low-cost rents in Sydney are usually found in the outer suburbs, which are, on average, more than 50 kilometres away from the central business district.

Professor Nicole Gurran, lead author of the study, says their analysis “points to the need for different types of interventions to address housing affordability and job accessibility in different localities.”

Gurran says “in areas that are job and transport rich, and where median market rents significantly exceed affordable levels by more than 20%, rental housing affordable to lower income households is only likely to be delivered as a result of statutory planning policies and funding programs that support the development of affordable housing for which eligibility is restricted to target households.”

She adds that in areas with affordable housing but employment opportunities are scarce, infrastructure investment can help connect households with jobs.

City deals and strategic planning

The research says place-based programs or “city deals” can be used to improve the productivity and liveability of cities, but these require collaboration between all government levels and the community. It adds that for city deals to be effective, strategic plans should focus on “employment growth, transport connectivity, and housing affordability and choice.”

The report reveals that by the end of 2019, there were already nine city deals in place in Australia – Perth, Townsville, South East Queensland, Adelaide, Darwin, Hobart, Launceston, Western Sydney, and Geelong.

The role of satellite cities

Regional and suburban areas, also called “satellite cities,” play a crucial role in providing affordable rental housing to lower-income workers, the study says.

Geelong in Victoria and Wollongong in New South Wales, for example, are connected to the capital cities of Melbourne and Sydney, respectively, via efficient transportation systems. These areas also provide residents with affordable housing opportunities.

“It is important that housing growth in these smaller cities is balanced by local employment and transport opportunities to ensure that lower-income working households are not forced to commute long distances to major cities,” Gurran says. “These satellite cities often have high car dependency, and there is a risk that new residential areas will be poorly served by public transport, undermining affordable living objectives.”

The research also says that existing “anchor” institutions, including medical facilities and universities, can provide a base for establishing new “knowledge industry clusters.” These, along with a low-cost housing market, offer an incentive for companies and employees to relocate from metropolitan areas.

“The real opportunity is for business to locate there themselves and take advantage of the fact that for their workers living and working within a closer radius with lifestyle benefits is very appealing,” Gurran says. “So, you actually need as much investment in public transport within those satellite areas as well as magnet infrastructure like universities that can encourage a cluster of activities around them.”