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Almost half of the workers essential to Melbourne’s city economy, such as cleaners, baristas, delivery drivers and childcare and aged care workers, live more than 20 kilometres from the CBD due to soaring housing costs and lagging wages.
The finding from new City of Melbourne research is being used to help the council officially define the “key workers” in need of housing support, as it also steps up pressure on the state government for action on housing affordability.
Melbourne Lord Mayor Sally Capp says the key worker housing drive is “about putting pressure on ourselves, as well as developers and all levels of government”.Credit: Chris Hopkins
“We’re talking about the workers who are absolutely essential to our economy,” said Lord Mayor Sally Capp. “The people that make our city tick are key workers: cleaners, child carers, nurses, chefs, security guards, hospitality workers and retail staff.”
She said escalating residential rents had forced workers to live far from their jobs, and access to affordable housing in the city was critical because many people worked outside traditional business hours and could not work from home.
The council estimates that in 2016 there was a shortfall of 5500 affordable dwellings in the municipality, a figure forecast to blow out to 23,200 by 2036.
At Tuesday’s Future Melbourne Committee meeting, councillors were due to consider a proposed draft definition for “key worker housing” that included it being for workers “who require a physical presence to perform their work, and whose household earns very low, low or moderate incomes”.
The council will use the official definition to help allocate rental housing in projects developed on its own land, but also in negotiations with developers that enter voluntary agreements to include affordable dwellings in private residential projects in return for planning concessions, such as additional height.
The key worker housing drive is also intended to help push the state for action as it finalises its own much-spruiked planning statement, due this month.
“This is about putting pressure on ourselves, as well as developers and all levels of government, to ensure we deliver more affordable housing to those who need it most,” said Capp.
Council analysis of 2021 census data found the municipality had about 142,000 key workers – more than any other Victorian municipality – and that almost half (48 per cent) were on very low to moderate incomes as categorised by the state’s definition of affordable housing.
More than one in five key workers travelled more than 30 kilometres to their work in central Melbourne; most were interested in moving to central Melbourne if rents were more affordable.
The findings come amid growing tension between the state government and councils over the forthcoming housing package, which will include councillors being stripped of some of their planning powers.
The city council is one of multiple authorities calling on the government to introduce mandatory inclusionary zoning, under which developers would be required to set aside a proportion of dwellings in new projects for “affordable” housing.
“We support inclusionary zoning to provide certainty to the development sector, to support our communities and to establish a sustainable ongoing pipeline of funding,” said Capp.
Infrastructure Victoria modelling shows that for a household earning $88,021 a year, buying a house anywhere near the city, or even in Melbourne’s middle suburbs, is now out of the question.
It found about one in five Melbourne households in greenfield areas would rather live in established parts of the city.
As The Age reported this week, the situation is also dire for low- and moderate-income households trying to rent, even under a discount “affordable” housing model used by the state government.
A single adult with an income of $59,540 – the midpoint of the government’s “moderate” income band – would have to pay an average of 54 per cent of their income in rent for an “affordable” home across all of Melbourne’s 31 municipalities.
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