Abstract: The paper discusses the extent of a key worker housing affordability issue for key workers in the City of Melbourne. The issue is addressed as a result of concerns raised over the cost of accommodation within the local or within a reasonable distance. The paper aims to determine whether the key worker housing affordability issue is a valid concern for key worker employers in the City of Melbourne. A definition of key workers used by the BankWest Key Worker Housing Affordability report (2011), comprising emergency services, teachers, and nurses was adopted, with the retail and hospitality services sector included. The paper looks at the effective cost of accommodation using a calculation of travel time and rental costs to determine the outer limit of housing stock reasonably available. The analysis assumes workers travelling in excess of a median travel time will regard additional time as an identifiable expense to add to direct housing costs. The housing affordable to each of the key worker categories within a reasonable commuting time was estimated. Dwellings of different types were compared - including one bedroom, two bedroom and all dwelling types. The research found that there was little evidence of an immediate housing affordability issue with the not unexpected result of higher income groups having fewer affordability issues than lower income groups. The proportion of housing available to key workers varies according to key worker group. Nurses have the greatest number of dwellings affordable to them, while retail and hospitality workers have the lowest number of dwellings affordable, with 18 per cent of all dwellings in the catchment. However, nearly 40 per cent of one bedroom dwellings were affordable to this sector’s employees.