As a severe housing crisis grips Australia, Adelaide hopes to popularise an old-fashioned residential arrangement in the CBD.

Experts say other capital cities should do likewise.

This week, Adelaide City Council announced plans to transform 100 vacant spaces above retail and commercial premises into residential properties over the next two years.

The Adaptive Reuse City Housing Initiative will offer grants of $500,000 to partially fund adapting buildings up to four storeys tall into residential properties. The grants would help with expenses such as feasibility assessments and construction costs.

The Lord Mayor of Adelaide Jane Lomax-Smith said while 50 transformations per year might not sound like a “huge ambition”, it would be “immoral” not to try to help people struggling to find a rental.

A Domain rent report published in July showed rents across Australia’s capital cities rose 2.7 per cent over the June quarter – compounding the same rise over the March quarter.

Many capital cities also saw property prices climb significantly over the past year.

Griffith University Cities Research Institute professor of urban management and planning Paul Burton told The New Daily that adapting retail commercial properties to residential properties won’t solve the housing crisis alone.

But it would make a difference, and could be appealing to young singles or couples wanting to live closer to work and have a city lifestyle.

Although transforming empty spaces above stores, offices, or cafes may seem like a novel idea to some, it is nothing new.

“We didn’t have such a rigid separation of land uses and buildings such that, ‘Oh, that’s a retail building, and therefore nobody could live above it,'” Burton said.

“The old buildings in … the CBDs of most of our capital cities that may have been there for 50 to 100 years [were] probably designed for people to live above [businesses] in the first place. It’s just we’ve drifted away from that in recent years.”

Doing things the right way

Using leftover space to provide homes could alleviate some pressure on local housing markets – but the transformations need to be managed properly to ensure desperate people aren’t forced into unhealthy living conditions.

Existing spaces above retail and commercial businesses may not have adequate natural light, fire escape routes, plumbing, or other necessities for residential use.

“You don’t want to set unreasonably high design standards … we’re not talking about a multimillion dollar penthouse apartment here in a purpose-built residential apartment building,” Burton said.

“It’s just making sure that there are actually some standards that apply to the spaces.

“Because there’ll be some people who might just go, ‘This is just an opportunity to chuck half a dozen desperate students into an inappropriate room and charge them a fortune.'”

CoreLogic head of research Eliza Owen said shop-top residential development could be useful in small-scale projects, such as Adelaide’s initiative.

But converting large office buildings would present more challenges due to construction sector labour shortages and commercial buildings not being designed with residential occupancy in mind.

Owen said there are likely existing residential properties sitting empty that would be better-suited to put people in homes – owners just need the right incentives.

“Whether those are properties that are sitting vacant that should be taxed accordingly to make sure that those are being occupied,” she said.

“[Or] continuing to incentivise downsizing through taxation … [would be an] effective, cheap way in the current context to get more efficiency out of existing housing stock.”

What do other capital cities say?

Hobart

City of Hobart city life director Karen Abey told The New Daily Tasmania’s capital was not “offering any financial incentives for housing on top of shops”, but was open to planning applications.

Sydney

A City of Sydney spokesperson said the city is not considering grants for building owners to convert commercial buildings to residential dwellings, and said commercial building vacancy rates in the city were not as high as in Adelaide.

“It has been the city’s policy to increase density in former industrial areas such as Green Square and Ashmore,” the spokesperson said.

“The council recently approved new floor space incentives for build-to-rent and co-living housing developments in Central Sydney to encourage suitable types of residential development in our city centre.”

Brisbane

The private sector has been left to take the lead on adaptive reuse in Brisbane.

“With 96 per cent of all homes built by the private sector, the housing crisis can’t be solved by government alone,” city planning chair Adam Allan said.

“While the conversion of commercial space into homes is already being pursued by the private sector, we are incentivising industry to build more homes sooner in well-serviced areas.”

Canberra

The City Renewal Authority is “in the early stages of exploring opportunities for adaptive reuse, particularly for housing and affordable housing, in Canberra’s city centre”, an authority spokesperson told The New Daily.

“We have already delivered one adaptive reuse project, the Salthouse Community Centre in Haig Park, which transformed a former mowing depot into an architecturally-designed hub for community gatherings that activate this central park.”

Melbourne

Last year, the Victorian government said it would work with the Property Council of Australia and the City of Melbourne to look at opportunities to convert almost 80 under-used commercial office buildings into between 10,000 and 12,000 apartments and mixed-use properties.

Since then, an empty office building on Little Bourke Street has been converted into 50 apartments for people at risk of homelessness, and 1100 square metres of vacant office space has been turned into a collaborative work environment for more than 100 creatives on Collins Street.

But on Thursday, almost a year on from the promise, AAP reported that Housing Minister Harriet Shing said retrofitting and upgrading some buildings was “just not possible”.

“We know that it would cost billions of dollars to upgrade and retrofit those particular tower sites,” she said.

“We would actually have to relocate all of the tenants in the process to yield results that would not actually make the buildings wonderful places to live but would simply make them habitable.”

Lord Mayor Nick Reece told The New Daily with city-based companies flocking to premium office spaces, vacant B and C-grade buildings need to be turned into valuable resources for the CBD.

Reece said the city would set a “new direction” on repurposing older office and commercial buildings at the Melbourne Economic Growth and Revitalisation Forum set to take place in a few weeks.

“If we identify we want to turn these vacant office floors into spaces for creative, education, health, education or housing – we will have the right people in the room to get it done.”

Perth

The City of Perth did not respond to The New Daily‘s request for comment.

But over recent years, Perth has embarked on several adaptive reuse projects for historic buildings.

Examples include a tobacco company building dating back to 1927 being transformed into three commercial suites and 30 apartments, and a 1970s office building turned into a 726-bed student accommodation.

Darwin

The Northern Territory’s Department of Infrastructure, Planning and Logistics did not provide information on possible adaptive reuse plans.

But there are calls within the territory for these type of projects to begin.

This year, the Northern Territory Chapter of the Australian Institute of Architects highlighted pre-general election priorities should include conducting an audit and feasibility appraisal of under-utilised buildings to be repurposed for uses such as housing, in order to reduce carbon emissions associated with demolition and full re-building.