Understanding key and essential workers: their importance to the local economy, who they are,
where and how they live, their journey to work, their socio-economic position and their ability to
afford housing.

Key workers are generally lower paid workers in occupations considered important to the effective functions of a city. There is no standard definition of key worker occupations, but it includes e.g. waiters, cleaners, delivery drivers, baristas, etc. A sustainable economy and live able community are based on the interplay between the industries and the workforce located in the area, the economic role of the wider region and the demographic role of the community. In this context, key workers play and important role in servicing the needs of residents, workers and tourists, as well as being an important source of labour for local economies.
Fewer workers living close to their places of work can diminish the liveability, attractiveness, and service provision of communities. Without adequate levels of key worker labour supply that can afford to live close to work the local industry will face additional costs and experience impacts on competitiveness. Further, workers will face additional costs in the form of transport or housing, resulting in a fall in disposable income and leisure time, which in turn, impact the local economy and the liveability of residents. A mismatch between industries and the workforce has implications for economic growth and the success of key employment precincts.
Understanding local key workers – who they are, their occupations, where they live and how they travel to work, their housing situation – empowers decision-making that benefits everyone. Understanding key-worker transport patterns informs transport infrastructure planning. Understanding housing affordability for particular occupations can be used to attract investment in housing for workers for development and industry.
Although key workers are critical to the functioning of cities, the value of a key worker is generally not reflected in the wages they earn. The low to moderate income classification under which the majority of key workers fall makes accessing appropriate housing a challenge in cities and tourist nodes with high costs of living. Multiple research studies have found that many key workers are unable to access appropriate and affordable housing, and that rates of housing stress and overcrowding are often highest in the inner suburbs. In a response to these housing challenges, inner suburbs typically experience a net loss of key workers while outer suburbs are gaining key worker residents.
Key workers are more likely to commute to work by car or other vehicular transport and are more likely to commute longer distances when compared to other workers. The lack of available lower cost housing means that key workers have little incentive to relocate to, or continue living in, suburbs with high costs of housing.
Across the board there is a growing recognition in planning policy of the housing challenges faced by key worker households. However, there are limited statutory tools and funding programs that would support the delivery of appropriate key worker housing. There are substantial social, environmental and economic costs if nothing is done to address the forecast shortfall in affordable housing in key locations for key workers. In the shorter-term, the opportunity cost could be significant. Without low to moderate income employees, workforce diversity and economic resilience can be significantly impacted. A 2019 analysis of North American cities found that GDP would be c. 13% higher if adequate housing has been constructed in areas with strong employment growth.
While most investment in affordable housing is considered to be targeting primarily social outcomes, key worker housing is more commonly associated with social, environmental and particularly economic outcomes. However, research from SGS Economics and Planning shows that investment in all forms of affordable housing does create triple bottom line benefits. For every $1 invested in affordable housing, $3 worth of community benefits is provided (SGS, 2019). This return on investment is commonly more than double that of other essential infrastructure such as road and rail projects.
Providing homes for key workers is essential in creating an economically productive and resilient city with high quality services for all. The clustering of jobs within a city a creates substantial productivity benefits through shared infrastructure, exchange of knowledge and access to labour.
Much of the debate on the affordable housing crisis for key workers is centred on supply. The rationale is that if we build more houses, supply will exceed demand, and housing affordability will improve. However, the housing policy responses must be much more nuanced than this. A lack of diversification in housing stock can equally severely impact the social fabric of a community as the shortfall in housing. A mono-stock approach won’t support a variety of dwelling types, sizes and price points and consideration and commitments around the amenity and services that are required to make these new homes actually liveable.
What role can Built-to-Rent play in housing key workers? Build-to-Rent (BTR) housing is not affordable housing per se. It is housing that is purpose-built, retained and managed as long-term rental stock, typically by a single owner. BTR is well established in the UK, USA and Canada but is an emerging housing typology in the African market. BTR projects are most commonly higher density developments and often local in urban areas with excellent access to transit and amenities. As they are retained by the developer during the operational lifecycle, the build quality is generally higher and sustainability features are enhanced when compared to traditional Build-to-Sell developments. Communal amenity features are also typically to a higher standard.

It is suggested that there are significant benefits to delivering key worker housing through a BTR model. The best identified process to regulate this would require developers to partner with a registered housing agency or union to allocate tenants and provide regular monitoring of tenant eligibility. To make BTR units affordable for very low to moderate income earners and appropriately discount to typical BTR market rents would need to be determined.
In summary, the economic role of key workers is set to become even more important in the coming decade due to strong forecast population growth, a younger demographic, and robust employment growth driven by service sector industries. In this context, the development of future housing to safeguard against escalating housing costs for key workers in strategic locations are crucial. BTR housing could provide a viable alternative to traditional homeownership and/or rental options but would require collaboration between developers and housing agencies/unions.
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