While the Ballarat CBD is filled with beautiful turn-of-the-century double storey buildings, many of the upper levels remain underutilised as nothing more than a large storage space.

An Armstrong Street restaurant recently submitted a planning permit application to take advantage of their top deck and even seat patrons on a balcony, but very few other buildings have their second storey occupied by either a resident or a business.

Ballarat mayor Daniel Moloney said better utilising CBD buildings is something that has been on council's agenda for some time.

"There are so many underutilised buildings across the whole CBD, especially that second storey where, hopefully, businesses can at least get good storage space out of them," he said.

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"Usually, the feedback is that it's particularly hard to get another tenant in and the reason for that is access. Getting a residential tenant in would be fantastic, but particularly complicated because it requires not only after hours access to the first floor but also fire escape options as well so if there is a problem in the building, there's at least a secondary exit point.

"That's where it gets particularly challenging with some of these older buildings, the cost of conversion, and for many years, there just hasn't been the return on investment for building owners to justify that."

Cr Moloney said he understood the appeal of inner-city living, especially living above a commercial business in a busy area.

"I'd love to be able to one day live in the CBD of Ballarat above a shop. It's something I did in my uni years, I lived above a shop in Lygon Street. It was the very first place I lived in Melbourne and I remember moving as an 18-year-old to Melbourne to study at RMIT and it was just the most awesome experience," he said.

"But they were buildings that had already been through that evolution over a period of time where they were probably built in the early 20th century, much like a lot of our buildings, but there had been the progressive property price increase over time to justify the cost, there was a return on the investment for the building owner."

Cr Moloney said residential growth in Ballarat CBD would likely come from new builds, but suspected the market for homes above businesses would be there in the next five to 10 years.

"Probably in the meantime, we can reasonably expect to see especially some of the hospitality businesses seeing the benefit and having a bigger footprint and extending their existing ground floor business up to the first floor as well, especially in a COVID era where space is important," he said.

"Being able to fit more people into an existing business has the potential to do a whole range of things. It can increase just general foot traffic, it can also make a business more profitable and also create a whole range of improved employment opportunities for the hospitality sector.

"The opportunities to employ more people with greater footprint in the CBD, there's always wasted footprint at the moment in upstairs areas, which is probably if anything just being used for storage and not much more, but having them as active spaces where people can get out and about just makes the entire CBD so much more vibrant and even better when some of the businesses are able to open up that that first floor with balconies and options that people can sit outside and watch the world go by."

Advocacy group Committee for Ballarat has been conscious about reactivating the CBD for some time, with a mix of residential and commercial developments.

Chief executive Michael Poulton said the first step was at a residential level to increase the city's housing diversity, but also improve its streetscape and visual appeal.

"As the population growth is on the edge of the city, we also need to expand our population in the CBD because not everybody wants to live on 600 square metres of land with a two-car garage," he said.

"I think the opportunity for inner city living in those second storey spaces is certainly there and I am very aware of some of the constraints around that... but as a general rule, I'd love to see more people living in that CBD and occupying some of that great space on the first floor.

"From a streetscape point of view, I think the renovation of some of the facades of our second storey buildings would really add to the mix of the city and really add to that heritage mix particularly. There are some great second storey spaces that do look tired and probably are in need of some love and that ability to to bring them back to life would really enhance the streetscape."

Mr Poulton said Ballarat could learn something from Melbourne, which has experienced a boom in rooftop and balcony hospitality spaces in the last decade.

"We know that people enjoy being able to get above the ground, you look down towards the streets, that ability to cast our eyes upwards rather than just laterally I think is important," he said.

"I'm in Melbourne at the moment and you see a lot of that, you see a lot of rooftop bars, balcony bars, they are popular and I think that's something that the city hasn't really had. The George has a great balcony area, GCs has a great balcony area, I think some more of those sorts of commercial opportunities with particularly hospitality would make a lot of sense.

"What I would be encouraging council to do is to really be encouraging of and look at sympathetic developments that would really lift the streetscape and that would be of great advantage to the city."

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