Bradfield 2023: Transforming CBD ‘ghost towns’ to help fix housing crisis

BRADFIELD ORATION: From 5.05pm onwards, parts of Sydney are virtually empty. And they aren’t that full during working hours. Is converting empty office buildings into apartments a way to tackle the housing crisis and bring life to ‘ghost town’ CBDs?

Converting empty office space into apartments in struggling parts of Sydney is emerging as a novel way to ease the ­housing ­supply crisis.

A prime candidate is the CBD of North Sydney. The commercial vacancy rate is above 20 per cent — twice that on the other side of the Harbour, according to Property Council of Australia data.

Such is the state of the North Sydney market, landlords are having to offer massive incentives to potential tenants which can be equivalent to more than two years of free rent on a five-year lease.

Unable to find anyone to ­occupy Miller St’s MLC building since the Covid pandemic, developer Investa recently filed a “scoping report” with the Department of Planning to convert the 14-storey building into 340 rentals and 100 car spaces.

“With approximately 600,000sqm of commercial floor space becoming available in the North Sydney CBD within the next three years, the MLC building is not considered a viable offering within the commercial rental market in its current state,” Investa said in the scoping report.

The heart of North Sydney is quieter than it has ever been. Picture: Jonathan Ng

Former North Sydney mayor and current councillor Jilly Gibson said she was in favour of the proposal.

“It kills two birds with one stone,” Ms Gibson said.

“We get people living in town, which is going to liven up the CBD — in particular on the weekend and after dark — plus it will helping with the rental crisis.

She argued it was “sustainable living” because tenants would likely work nearby and rely on public transport.

Ms Gibson said she was open to residential offerings replacing commercial spaces where it made sense.

“We need to carefully examine and have an open mind about every proposal that is presented to us,” she said.

Mark and Julie Baylis, owners of Marlie’s Eatery in North Sydney, would welcome residents moving into empty office space. Picture: Jonathan Ng

North Sydney Mayor Zoe Baker is known to be strongly opposed to Investa’s plan — or converting any of the area’s existing office space into ­housing. She did not respond to a request for comment before deadline.

Developer Aqualand’s project director Tim Robertson urged the NSW government to “adopt a considered approach to identifying key areas and key buildings that could support residential development”.

“Our CBDs should not be ghost towns at five minutes past five every weeknight, it’s not a vision that anyone supports,” Mr Robertson said.

“So we need to take decisive steps now to ensure that it doesn’t happen.”

Owner of North Sydney cafe Marlie’s Eatery Julie ­Baylis said: “I don’t really understand why the council is standing in the way of bringing in residents.

“We always comment on how many empty buildings are for lease.”

Mr Robertson said business districts such as Sydney, North Sydney and Chatswood had some of the most suitable places for residential development, with excellent public transport access and proximity to jobs.

“That these places are largely off limits to residents makes no sense,” he said.

Premier Chris Minns recently told The Daily Telegraph he was open to transforming empty offices to apartments.