However, such work will not be completed quickly.
Dunedin City Council staff are to report back in time for the 2025-26 draft annual plan.
An overview of incentives that exist already and strategies being worked on has been provided to councillors ahead of a council meeting tomorrow.
Councillors do not yet have options in front of them, but staff were either working on or were about to start work on options for future consideration, a report for the meeting said.
It was important such work was done in a co-ordinated way, the report said.
"Staff will review the current building incentives ... and consider possible incentives for conversion of vacant inner-city space."
The possibility of more incentives to encourage building owners to turn vacant space above shops into residential units was raised by Cr David Benson-Pope in March last year.
A lot of space on the first floor of buildings in the central business district seemed to be under-used, he said at the time.
"There must be a few simple things we can do."
Councillors asked staff to report back on the issue in time for 2023-24 annual plan discussions.
The report for tomorrow’s meeting noted the council adopted three key strategic plans over the last two years that included action to develop options to support accessible and energy-efficient homes, and heritage conservation and restoration projects.
They were a housing plan, zero-carbon plan and heritage action plan.
The council had also undertaken work in recent years to adjust its district plan to create more housing capacity and allow more intense residential development and facilitate duplexes.
Incentives for installing solar panels had been in place since 2009, seismic-strengthening work since 2012 and increasing insulation since 2018.
"Uptake of these incentives has been low, and further work is required to understand why this is the case," the report said.
However, demand was high for money from a heritage fund, which included earthquake-strengthening.
The council provides an annual grant of $680,700 to the fund.
In the 2022-23 financial year, requests for funding from it totalled more than $2.2 million.
The heritage action plan adopted late last year included proposed action to incentivise the use of vacant space in heritage buildings and precincts.
"This work focuses on protected heritage buildings, the majority of which are in the central city area," the council report said.
When the heritage plan was adopted, including 35 proposed actions that could occur over three years, Cr Benson-Pope referred to upcoming funding decisions.
Implementation of the plan would be helped by putting funding in place in the council’s 2024-34 long-term plan "to get these actions done", he said.
Among the proposed actions were investigating financial tools, including rating differentials, to "discourage buildings and sites from being left vacant", and reviewing the structure of fees for heritage-related resource consents.
Dunedin treasures should have better protection once the heritage action plan got going, Cr Sophie Barker said when the plan was adopted.
The zero-carbon plan, adopted in September last year, included proposed action to support home energy efficiency, such as through building incentives.
The housing plan, adopted in August 2022, included action to identify options for an incentive scheme that encouraged "building and retrofitting homes with design for everyone and making homes warmer".
The city council will also look into what other councils have done.
