In the context of the current shortage of affordable housing in Australian cities, this paper aims to generate ideas on how the Australian Construction Industry can improve both the physical and social sustainability of much needed new affordable housing developments. The paper draws on lessons learnt from studying urban housing developments in Brazil in April 2009. The paper defines sustainable development as housing which meets the needs of current residents without adversely affecting the needs of future generations. Affordable housing is defined broadly as any housing which is affordable for low or even middle income earners which could be owner-occupied or rental housing owned by government, community groups, corporations or individuals. The paper briefly outlines the challenges faced by both Brazil and Australia in providing appropriate low cost housing in urban environments. It details a brief history of housing issues followed by a description of the current state of affordable housing in each country. This paper investigates the sustainability of affordable housing in Australian cities.