AHURI research has identified four overarching housing characteristics that can influence urban productivity growth: the dwelling’s qualities, location, neighbourhood and price. Although urban productivity growth is measured at the city rather than household level, the human and social capital of households are key inputs into how urban environments function productively. 

Housing characteristic Intermediary Examples of productivity impacts
1. Dwelling qualities

Size/ comfort





Build quality

  • Human capital
  • Impact on children's physical safety and development
  • Good light/ventilation reducing inhabitants' rates of sickness and use of medical services 
  • Impact on children's ability to study at home.
  • Space to create a home business


  • Environmental efficiency
  • Reduce energy costs/carbon footprint/water use
2. Dwelling location Transport Infrastructure
  • Increased choice of employment and education opportunities, consumer products, health institutions and social activities. 
  • Reduced time and cost in travelling to jobs, education institutions, health institutions, shopping, etc.
3. Dwelling neighbourhood Social relations (Social capital formation and trust)
  • Perception by others of the neighbourhood e.g. employers discriminating against particular neighbourhoods.
  • Quality and variety of interaction in the local community (which can lead to business innovation etc.).
4. Dwelling prices (purchase costs or rents)  High costs/ reduced availability
  Change in prices
  • Encourage consumption (by home owners/buyers)


These housing characteristics can impact urban productivity either directly or indirectly. 

An example of a direct impact can be seen in the 'location' characteristic of increasingly polarised cities, whereby low-moderate income households can't afford to live close to where the jobs are (particularly those jobs in the CBD), which leads to reduced employment opportunities for these households, and reduced profitability for CBD businesses who can't pay low-waged staff enough to make long commute times worth their while. 

Examples of indirect impacts include the 'quality' characteristic of health whereby damp homes exacerbate respiratory diseases, which lead to increased sick leave payments, reduced business productivity and higher health costs for the community, or when crowded homes don't have quiet places for children to do homework or study, thereby reducing education outcomes. 


This Brief incorporates material previously published in AHURI’s Policy Issues Analysis series.