There is this Melbourne – a Melbourne of my imagination that doesn’t exist for me anymore but once did.

It’s the Melbourne of the inner north – Fitzroy and North Carlton with its parks and squares, its sidewalk cafes and little bars, shady side streets where the city is a quick cycle ride away.

It was the city as a sort of ideal of the kind prescribed by Jane Jacobs – mixed communities of housos and aristos and students, the shops clustered like they are in a village, public space designed for serendipitous encounters.

This Melbourne of my youth is now a rich person’s Melbourne. Gentrification began a long time ago and has spread out to Brunswick and Coburg, the old factory suburbs, once the home of blue-collar workers and newly arrived migrants. It’s a world away from the ideal of Helen Garner’s Monkey Grip; the communes and the share houses, and the people on the dole living in the double-storey terraces just off Lygon Street.

The last few months, looking to rent in Melbourne, we’ve been pushed further and further out. At open houses, desperate people offer six months’ rent in advance; houses are barely open for inspection before they’re snapped up – and this is in suburbs closer to the airport than the central business district.

Fitzroy and Carlton now have some of the most unaffordable real estate in Australia. You have to go a long way off the red maps of the Melway to find affordable housing in Melbourne. House prices, lower than Sydney, are increasing at pace, pushing those on average incomes further and further out.

The thing I love best about Melbourne – and this is a hard thing to phrase – is that it’s been OK to be a loser there

Yet people continue to come – 1,700 a week, 500 of whom move from New South Wales to Victoria – economic refugees of a sort, chasing the dream of housing for under a mil. I am one of their number (or as I now see it, I am part of the problem), having moved back to Victoria because of the cost of housing in Sydney.

Each year since 2010 when Melbourne was awarded the “most liveable city” tag, as it was for the seventh year running this week, there has been a sense of local pride that the city without the natural beauty of Sydney is still a better place to live. That there is a recognition it’s not just about the view from your window, it’s about a hundred other ingredients that add up to the experience of living well in a city.

Yet this year something seems off. Yes Melbourne is liveable – but for whom? Certainly not for everyone.

This is the year homeless people became a visible and critical mass in the city. There was no ignoring the tents and tarps along Swanston Street and around the station as the city filled with people paying hundreds of dollars for a seat at the Australian Open. It’s also the year that homeless people were vilified by politicians and the media. That their presence was perceived as some sort of blight.

It was the year when property prices in middle-ring suburbs became categorically out of reach of people whose families had lived there for generations. It was when your choice of affordable accommodation became a coffin-like apartment in a city high-rise or a new-build on the city fringe, where you spend your daylight hours at work or in traffic.

There are free trams in the city, but the only way you can get on them is to sort of launch yourself into a paté of people.

It’s peak hour all the time, everywhere: the whole city becoming one big Punt Road.

For someone in Wyndham or South Morang or Craigieburn or Cranbourne, it’s about needing a car to get around. It’s spending 60% of your after-tax income on housing. It’s feeling far away from all the opportunities available in central Melbourne.

Much of Melbourne’s recent growth has been 20km to 40km outside the city, locking a lot of people out of the sort of liveability touted in the Economist’s survey.

Meanwhile, the growth in the inner areas of south Melbourne and Docklands is bereft of public realm and atmosphere.

The Melbourne way of living is increasingly a rich person’s way of living: escape to the beach house in the summer, tickets to the tennis, spring racing carnival car park or a marquee, good seats at the Boxing Day Test, a box at the football, working your way through the restaurants of the Good Food Guide, queuing for the $30 brunch, not worrying about the traffic because where you live, you can walk everywhere.

This is what it means to enjoy the spoils of the most liveable city.

Melbourne is now a city of two classes of people – a city where inequality is manifestly visible on the streets.

And that is precisely the point. The Economist report is not meant to be liveability for everyone – it’s a report for the global elite. Where is the best place to send your best and brightest foreign workers? Where is the water clean and the private schools good and the risk low of being carjacked on the way to the office? The report was never about us. It was always about them.

Of all the things I love about Melbourne, the thing I love best – and this is a hard thing to phrase – is that it’s been OK to be a loser there. If you’re down on your luck it’s always felt like a softer city than Sydney to fall.

I remember a conversation a few years ago with someone on the board of the Big Issue. They needed to get more Sydney people to support it, she was saying. People in Melbourne bought the Big Issue and interacted with sellers at a much higher level than in Sydney.

What did this say about the two cities, we wondered? At that point – 10 years ago – I would have said, well, Melbourne is a kinder place.

And I’d rather have kinder than more liveable any day.