BANK foreclosures, interest rate rises, mortgage stress, underquoting — every day, it seems, Australia's housing crisis is making news. Real estate has always been a big talking point. These days it's an obsession.

Expat writer Ryan Heath recently ruffled some feathers, claiming the greed and short-sightedness of the baby boom generation is responsible for generation Y being locked out of the property market. "Property apartheid" is the phrase he coined.

At Melbourne Citymission, our gen Y clients are also feeling the pinch, but in ways most gen Ys — fortunately — couldn't begin to imagine.

Take 20-year-old Diana. She's been looking for somewhere permanent to live while juggling self-employment. "Accommodation is hell," she told us. "The point is, you can't really concentrate on something if you don't know where you're going to sleep that night."

Diana is living in a refuge — a temporary fix that doesn't tackle the problem of where she is going to be living in three weeks, three months or three years.

Twenty-two-year-old David last had a stable home a year ago. He wants to do a training course, find accommodation with affordable rent and have a balanced life that isn't chaotic.

"I'm sick of it," he told us. "I just want to be like everyone else."

Housing is a basic need and a fundamental right. It's the foundation on which all other forms of social and economic participation are built. Safe, secure and affordable housing is particularly critical for young people who cannot live with their parents, or are making the transition to independent living, education and work.

In the frenzied debate about inner-city property prices and the rental squeeze, the housing problems confronting the Dianas and Davids of our community are often overlooked.

There are simply not enough affordable housing options for young people, particularly if you are on a low income.

A 20-year-old who is single and on a full-time training program receives a maximum of $226 a week, including rent assistance and Youth Allowance. The median rent for a one-bedroom flat in a low-cost suburb in western Melbourne is $130 a week. That leaves $13.70 a day for food, transport, utilities, clothing and education fees. This is not sustainable.

The evidence is clear about the extent of the housing crisis faced by those on low and middle incomes. The problems are not cyclical, they are a consequence of policies that have distorted the market.

Substantial change is urgently required to stimulate the supply of affordable housing that meets the needs of low-income households.

Likewise, the system dealing with the young homeless needs big changes if it is to provide avenues to sustainable housing, because demand has overwhelmed most services.

Transitional housing is the main option. But this is not long term and is often inappropriate, particularly when a vulnerable person is forced to share with other high-risk young people.

Melbourne Citymission is doing some pioneering work with its "Step Ahead" model. This provides young homeless people with long-term housing that gives them the security to tackle their education, employment and training needs and, ultimately, to break free of the cycle of homelessness.

It is groundbreaking and producing results, but does not receive federal funding, so it has limited availability.

As "Housing Week 2007" looms, Melbourne Citymission wants the Federal Government to develop a national housing plan to ensure affordable and sustainable housing for young people living independently, and to respond effectively to the housing crisis and homelessness.

As a partner in the "Australians for Affordable Housing" movement, we want a national agreement that includes measures to increase the supply of public and community housing; stimulate affordable housing with tax changes; introduce an affordable rental incentive scheme; improve rent help for private tenants and support the growth of housing associations.

We also want a big overhaul of the system looking after homeless youth, with the establishment of a housing association for young people.

This would develop a mix of housing options — with links to intermediate labour markets and employment help programs — for young people.

But the critical component is collaboration. Only an agreement between the Commonwealth and the states and territories will secure a balanced and coherent set of polices leading to affordable housing.

Anne Turley is chief executive of Melbourne Citymission.