This study investigated the impacts commuting costs have on accessing employment for low income workers who are renting their home. Policy makers have concerns that housing market pressures may limit where low income workers can afford to live, and may result in low-income workers living in locations remote from employment concentrations, leading to weaker worker-job matching, less efficient labour markets and workers being excluded from employment opportunities.

Key points:

• There is a need to better understand the contribution of urban spatial labour markets to urban productivity, particularly in relation to job access cost of commuting. Policy needs to improve its framing of urban productivity in relation to job access and, in turn, the contribution that urban labour markets make to urban productivity.
• There is extensive market underutilisation of residentially zoned land in Sydney and Melbourne. The planning system clearly intends that residential development should occur at much higher average dwelling yields per unit area of land than the market is supplying under present conditions. The reasons for this underutilisation deserve further investigation.