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Houses provide shelter for city dwellers. Collectively they constitute the major component of the built environment in residential parts of a city, giving any locality its distinctive appearance. Early immigrants brought ideals of what constituted an appropriate house, something they could not afford in the country of their birth but which would hopefully be within their reach in their adopted home. The availability of building materials and building skills as well as local climatic conditions and regulations shaped and limited what could be done, but one enduring feature of Melbourne's housing quickly became evident. As the small town took shape there was a strong preference for low-density suburban development, single-family dwellings on individual allotments. By 1890 the density of population in Melbourne was barely half that of Sydney. Melbourne's suburbs, served by an extensive network of trams and railways, extended many miles from the city centre.

A second feature of Melbourne's housing is that much of it has been built in response to periodic shortages, with rapid population growth generating relatively short bursts of building activity. During the 1850s gold rush Melbourne's population increased fourfold, a world record for urban growth. Existing housing was totally inadequate and a tent city (Canvas Town) was established in South Melbourne to provide temporary accommodation. In the following decades Melbourne people showed a willingness to invest in bigger and better homes. The number of rooms per house increased from an average of fewer than three rooms in 1865 to more than five by 1891, creating a situation where the average family home in Melbourne contained more rooms than family members, giving more private space to each individual. This applied even in the poorer inner suburbs, although in some working-class cottages four or more children were still being shoehorned into one bed in a tiny bedroom.

The 1880s was another period of rapid population growth but this time the building industry more than kept pace with the demand for housing; indeed, home building in Melbourne absorbed two-thirds of all private investment in Victoria in this decade. The suburban ideal dictated a physical separation of home and work, with the home, as the centre of domesticity, the wife's domain. Ideally the house should be owned by the occupier and surrounded by its own garden. The ideal was most completely realised in the affluent new suburbs such as Hawthorn or Kew but it could also be achieved in an abbreviated form with tiny, detached, wooden, workers' cottages with pocket-handkerchief sized gardens in Collingwood, Richmond or Footscray. At the end of the 1880s around 40% of Melbourne households owned or were buying their own homes. Such levels were far higher than in other cities of comparable size elsewhere in the world and also significantly higher than in Sydney. They were an indication of the high living standards enjoyed by Melburnians at the time.

The terrible depression of the 1890s brought house building to a halt. Many mortgagees were evicted but the underlying ideals remained undisturbed. When the next building boom began in the 1920s, architectural styles had changed but the preference for detached suburban living had not. Californian bungalows were built in their thousands in the new outer suburbs. For the minority of people who rejected the suburban ideal, flats were built in increasing numbers, especially in St Kilda and Prahran. By 1933 more than 6% of Melbourne's dwellings were flats and tenements.

Over time Melbourne's houses have become increasingly dependent on metropolitan-wide networks of services. Roads came first, linking houses to each other and to shops and workplaces, then, from the 1860s, water was piped into all dwellings. Gas and a small number of telephones followed from the 1880s, but Melbourne was late getting underground sewers, with house connections not beginning until the end of the 19th century. Electricity, generated at the Yallourn power station, came in the 1920s.

At the end of World War II Melbourne faced the biggest housing shortage in its history. As there had been little building during the 1930s depression and none during the war, a decade and a half of population growth needed housing. So too did the avalanche of migrants who arrived in the 1950s and 1960s. Shortages were overcome by a combination of private and Housing Commission activity augmented in the case of more than a quarter of 1950s homes by families who took their destinies into their own hands and constructed their own home. Initially much of this building was in weatherboard, but it was the increasingly popular brick veneer construction that came to dominate postwar suburbia. Levels of home ownership, which had changed little during the interwar years, jumped dramatically to around 70% in the 1960s.

New houses became larger with the addition of rumpus rooms, studies, en suites, garages and other specialist spaces, while extensions and renovations enlarged and modernised existing properties. Many houses now acquired labour-saving devices such as washing machines, vacuum cleaners, dishwashers, food mixers and refrigerators. Television, record players, and the backyard barbecue and swimming pool, also made the home more of a recreation centre than ever before. During the 1960s family members were probably spending more time at home together than before or since because the paid working week had shortened, children stayed at school longer, and married women had yet to enter the workforce in large numbers.

In recent decades city planners and governments, worried about the costs of providing infrastructure for Melbourne's ever-spreading suburbs, have had some success in reversing the traditional patterns and encouraging urban consolidation. 'Dual occupancy', which allowed the subdivision of some suburban blocks and the construction of a second dwelling in the garden of the original house, has altered streetscapes and increased the pressure on services, to the dismay of some residents.

Since the 1990s there has been a boom in the construction of high-rise apartments in Central Melbourne which have proved attractive to empty nesters, students and other inner-city-living enthusiasts. Despite these changes Melbourne's housing stock at the beginning of the 21st century retains the characteristics evident from the start. Three-quarters of all households continue to live in detached dwellings which they mostly own or are paying for, 10% live in town houses or terraces and 14% in flats or apartments.

Tony Dingle