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The City of Vancouver is looking to tear down and rebuild Fire Hall No. 5 at 3090 E 54th Ave., Vancouver, seen here May 30, 2013 and put some affordable housing on top.John Lehmann/The Globe and Mail

In a city hungry to find space for new residents, Vancouver has seen apartments constructed on top of car dealerships and downtown offices, libraries and community centres.

Now, the city of Vancouver is eyeing a new possibility: Fire halls. Or at least one of them.

Fire Hall No. 5 is a tired old building in southeast Vancouver across the street from the Champlain Heights shopping centre. The small tower perched on its base is the highest structure around in the largely single-family neighbourhood.

The original plan was to tear it down, run the fire hall at a temporary site down the street, and build a new one.

But the city's community services manager, Brenda Prosken, and her team have come up with a different idea.

"City staff are working on a new construction plan for a fire hall on the site, and it is our intention to construct an affordable housing facility above the fire hall. The site is well located across from a shopping centre and on an arterial [road] with accessible bus transportation, which makes it an optimal housing location," she said in a memo to city council and administrators.

The city will be asking for bids on a contract to build and operate the rental part of the new facility, which would get some money from the city's affordable-housing fund.

Staff in the provincial ministry responsible for the B.C. Building Code said there are no safety regulations prohibiting that kind of combined use, and it is up to the local government to approve such a facility.

But the spokesman, who said he could not be quoted by name, said the consensus around the office was that it would be "too noisy."

Councillor Geoff Meggs of the ruling Vision Vancouver party said the proposal reflects the city's intense efforts to find ways to create more low-cost housing.

"The city is looking high and low for opportunities. And we've had some successes with this kind of effort already."

A previous council when Philip Owen was mayor approved a proposal to build rental housing on top of a new library in Mount Pleasant. That is rented out at market rates.

More recently, the Vision council approved building a new library for Strathcona with subsidized housing above it.

And just last month, the city announced that it was going to lease four sites to a consortium of non-profits for 99 years at no cost to get more affordable housing built in Vancouver. That group contributed $6-million of its own reserves.

"I think the success with those four sites has led the city to reconsider long-term leasing. We now know we can attract partners who can bring equity to the table," Mr. Meggs said.

But a councillor with the minority Non-Partisan Association said he had concerns about the Vision council putting tax dollars into housing.

"I'm open to us leveraging our land and looking at innovative ways of using our property," George Affleck said, adding that he was concerned that part of the deal will require money from the affordable housing fund, which is financed by charging developers what are called "community amenity contributions."

Mr. Affleck said those CACs should be used for real amenities, like parks, community centres and libraries.

"An amenity is not more housing."

The fire-hall proposal is supposed to come to council later this year for approval.