Global South | Housing affordability, and Living affordability, and what it means for our suburbs
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Housing affordability, and Living affordability, and what it means for our suburbs

This article by Simon McPherson was first published in Planning News, May 2020.

I started writing this article before the COVID-19 pandemic took full hold of our professional and personal lives in mid-March 2020, becoming the prevailing lens through which we look at everything now. I was writing about the experiential, financial and health implications of commuting, and the benefits of working close to home, in the context of housing affordability. But this health crisis is forcing many of us to re-cast the way we work, learn, and recreate – making this article seem more topical, but also somewhat behind the times!

While the pandemic is not the focus here, the crisis does present a new lens for looking at our neighbourhoods and cities, when we come out the other side. Liveability and affordability have been brought into even sharper relief.

Australia has experienced a long-running housing affordability crisis, with ongoing property price increases creating growing challenges for households trying to ‘break into’ the market.

While renting is more accessible, presents less long-term financial risk and pressure, it can cause other personal, and societal, problems.

Older households that own their home are far better off than similar households that rent[1]. If you do not own a home by age 45, you are unlikely to ever own one, and are likely to be highly impoverished in retirement[2].

Renting also impacts communities – large proportions of renters and regular household movements in neighbourhoods restrict the potential to form stable communities. Developers internationally are grappling with how to facilitate long-term renting and resident stability, to benefit households and communities.

New development models, construction methods and tenure types all play a role in advancing affordability. But how can planning and urban design for our cities and suburbs contribute to housing affordability?

Living affordability, not housing affordability

Affordability discussions tend to concentrate on the price of housing, and mechanisms to reduce these ‘fixed’ cost. But too often we forget the impact on affordability of ongoing, living costs, associated with where and how we live. But how much difference can living costs make, and would it be noticeable?

Understanding living costs: Health

A health-supportive home environment can help you save money.

If your home makes it convenient and comfortable to walk, cycle and use public transport, you will be healthier, and so can leverage health savings. Cycling delivers health benefits to the individual of $0.10/km (on average), and walking $0.20/km, with (in each case) equivalent benefits to society[3].

For a 4-person household, if each walked 2km/day and cycled 5km/day, this would save $25.20 per week, of a total weekly spend on health and medical costs of $85/week[4], and could accrue to over $60,800 in savings over a 30-year mortgage.


An interrogation of the opportunity cost of car dependency found that if a household could own one less car, through the capacity for walking and public transport use, it would likely result in opportunities to accumulate over $1million in superannuation over their working life, or to purchase a home worth $125,000 more[5].

These opportunities significantly inform the housing affordability challenge, by encapsulating living affordability, alongside the direct cost of housing.

Accessibility is key (to shops, parks, schools, community facilities, transport stops), but the quality of routes and connections is equally important. We are likely to walk further if the experience is interesting, comfortable and safe, while low-quality environments discourage walking.

Unfortunately, accessibility and public realm quality are not distributed evenly across the city. Areas which force more driving, tend to have higher traffic levels and bigger roads, which further discourage walking and cycling.

Travel time

When we value the time spent commuting, the inequality across the city becomes more stark. This table shows the total annual costs of commuting, to consumers and businesses, including time costs at the average wage[6]. The unfair cost burden to the outer suburban residents is clear – paying more than double, or $268 more each week, than inner residents using public transport, in areas typically associated with the most ‘affordable’ housing.

Total weekly cost of commuting (2006 dollars, including time cost) Inner Melbourne Middle Melbourne Outer Melbourne
By car (new standard car) $338 $387 $502
By Public Transport $247 $331 $515



While costs for utilities are influenced by lifestyle, the opportunity to save money presented by more efficient and compact housing is significant.

The Victorian Energy Saver Website[7] shows that the annual energy cost for a house (all electric, 2 adults, 2 children) is $3,289.64. The cost for a Unit, by comparison, is $1,643.01, saving $78,357 over 30 years[8].

Non-monetary (social) value

Walkable neighbourhoods also promote social interaction – passing your neighbours, making contact saying hello, making friends – something we are all missing in this period of social distancing!

Traffic levels affect opportunities for friendships and social connections in streets, as well as perceptions of one’s ‘home territory’[9]. Higher traffic reduces opportunities for social connection. Lower-traffic streets lead to larger perceived home territories, encapsulating shared spaces which reduce social isolation.

Transport accessibility links people to opportunities for work, study and social connections. Parts of the city with lower transport services can therefore experience increased isolation and more loneliness[10].



Clearly where you live, and the opportunities that your home and neighbourhood present, make a big difference to your financial position. So, what should we planners and urban designers do?

Ensure everyone has convenient, safe and enjoyable access to a local centre, shops and services. The presence of a local centre within easy walking distance is a foundation for an affordable lived experience.

The value of accessible, connected housing should not just be for the older inner suburbs. This will help distribute liveability value, and cost savings, more evenly across the city. It ideally goes beyond the 20-Minute Neighbourhood, to a 5-minute local walk.

Some parts of Australian cities clearly present challenges to living standards – liveability is not distributed equally. The areas with the lowest-priced housing also have fewer local jobs, and are more distant from job centres (and entertainment, culture and education opportunities), which can lead to longer commutes.

In 2010, the median journey to work distance for residents of Melbourne’s outer growth areas was 50% higher than the metropolitan average, while some growth areas were double the metro average[11].

Make urban places across the city which attract businesses, and workers. This will help bring jobs and high-value work closer to people and where they live, again sharing accessibility value.

Working from home currently provides opportunity to reframe how we locate our work and home in relation to each other. The problems of long commutes are well-documented, while a large US study found that the ideal commute is actually 16 minutes each way, providing time to think and decompress[12].

It also found that people are happiest walking to work, commuter rail and cycling are also good options, but driving is by far the most stressful form of commute.

The 16-minute commute ideal aligns neatly with Melbourne’s 20-minute neighbourhood principle in Plan Melbourne[13]. But residents need the opportunity to access good jobs across the city. Employment is distributed across the city, but high value jobs tend to be concentrated in and around central Melbourne.

Melbourne’s increasing demand for opportunities to work beyond the central city, and reduce travel times, are illustrated by strategic initiatives such as the National Employment and Innovation Clusters, and local actions like the emergence of co-working spaces across the metropolitan area, including Dandenong, Broadmeadows, Sunshine, Cheltenham and many others.

Make housing more compact, efficient, comfortable and better-designed, reducing the impact of housing, and the costs for residents. While smaller homes may be perceived as less value for money, the benefits of well-designed and efficient homes must be communicated and shared.

Bring housing closer to the street, to facilitate interactions and connections, and make streets more walkable. A home which engages visually with the streetscape or public environment facilitates interaction, social connections, and safety in the street.

Walking on streets where homes make a tangible contribution to the experience, is more enjoyable and less isolating for people. That means safer streets, healthier people, and more viable local businesses.

The value of this interaction is hard to quantify, but it supports stronger feelings of home, connectedness with place, and a sense of belonging.

Communicate better, publicly. The benefits of well-located, accessible, efficient housing need to be more effectively understood and conveyed to the community, to inform and influence housing decisions. Better communication will shape smarter choices and increased demand for smarter, better housing.


At an ideal time establish fresh perspectives and approaches in cities and towns, we need to recognise that how we plan and develop housing, in connection with places for work, education and recreation, is a major component of housing affordability outcomes, and that reducing the financial burden of housing is within the reach of effective urban design and planning.



[1] Geoff Thompson and Alex McDonald, Older Australians who own their home more than 20 times better off than those who rent, data shows, ABC News, 10 February 2020,

[2] Elle Hunt, If you don’t own a home by 45, you probably never will, says report, The Guardian Australia, 10 October 2016,

[3] Todd Litman, Victoria Transport Policy Institute (Canada), Economic Value of Walkability, 24 July 2018,

[4] ASIC MoneySmart, Australian Spending Habits:

[5] Charter Keck Cramer: Charter Insight, August 2012: Car Dependency Costs – where are they taking us?

[6] Australian Government, Department of Infrastructure and Transport – BITRE, Research Report 125: Cities – Population growth, jobs growth and commuting flows in Melbourne

[7] Referenced in presentation: Mount Alexander Shire Council, What is a typical Energy Consumption?

[8] Costs/savings over a 30 year mortgage period are calculated assuming 3% compound interest, using the ASIC compound interest calculator:

[9] Donald Appleyard, Liveable Streets study, referenced at Project for Public Spaces,

[10] Melanie Davern and Lucy Gunn, Lonely over Christmas: a snapshot of social isolation in the suburbs, The Conversation, 10 December 2014.

[11] Victorian Auditor-General’s Report: 2013-14:2, Developing Transport Infrastructure and Services for Population Growth Areas, August 2013.

[12] Andrew Merle, The Ideal Work Commute Will Make You Happier and Healthier, HuffPost, 9 November 2017.

[13] Plan Melbourne, 20-Minute Neighbourhoods, at