Data-driven Strategies for Affordable Housing: A Hybrid Genetic Algorithm-Machine Learning Optimization Model in the Melbourne Metropolitan Area

Abstract. The escalating rental crisis in Australia, rooted in demographic dynamics, a scarcity of lands suitable for development and the influence of interest rates and government subsidies, necessitates innovative solutions for housing affordability. One promising approach is to increase the supply of affordable rental housing. Nevertheless, these efforts must be guided by well-informed policies as they are required to cater to the diverse needs of the stakeholders involved. Accordingly, this study aims to prioritize suburbs in the Melbourne Metropolitan area for the construction of apartment/unit buildings, benefiting both builders/investors and renters. Leveraging a hybrid Genetic Algorithm-Machine Learning (GA-ML) framework, multi-objective optimization models are developed to rank 105 suburbs based on key parameters for both builders/investors and renters. The optimization process seeks to maximize economic outlook and rental yields for builders/investors while minimizing rents and commuting distances for renters, in addition to proximity to essential amenities. First, an initial optimization using GA based on six key parameters is performed considering a linear multi-objective function. Subsequently, ML-based objective functions are defined using Random Forest (RF) and extreme Gradient Boosting (XGBoost) models to refine the optimization model for suburb rankings. The evaluation reveals strong correlations between GA and GA-XGB rankings, suggesting the effectiveness of the GA-XGBoost model in prioritizing suburbs. Notably, suburbs consistently prioritized across all models include Brunswick, Coburg, Preston and Reservoir, highlighting their suitability for apartment/unit building construction. By directing attention to specific suburbs aligned with different stakeholders' needs and preferences, this study contributes to a more sustainable and equitable housing landscape.