This paper assesses models for affordability and sustainability in housing developments as currently manifest by various community groups in Australian cities. The paper draws on ecological and permacultural theory as transcribed into urban spaces, often referred to ecocity theory and practice, in which cities and therefore housing, are seen as an integral part of ecosystems, with design and practice aiming to use cities as a means for ecological restoration. This paper documents recent housing developments in Australian cities which seek to manifest these design and philosophical concerns, and discusses the implications of these developments for the wider sustainability of Australian cities. Data is drawn from site visits and interviews with primary stakeholders — residents and developers of such projects, architects, governmental housing providers and community housing advocacy groups. This is followed by a review of current impediments identified by stakeholders and an assessment of the scope for affordable and sustainable housing in Australia. Finally, the implications of these developments and impediments for current and future policy options are discussed.