MADRID — It’s hard to imagine that the property on the corner with the whitewashed windows and the potted plants flanking the front door was ever anything but a three-bedroom family home.
All that remains of its former life as an Irish pub is a faded red Coca-Cola crate propped against the wall. The graffitied metal shutters have been thrown away, the bar where beer was served has been replaced with kitchen units, and the storage area at the back has been given a window and a new lease on life as an en suite master bedroom.
Earlier this year, Isaura Fernández, 37, and Oscar Manrique, 38, bought the property for 180,000 euros, or $198,000, — half the asking price for the apartments they had viewed in this residential neighborhood in Madrid, a few stops down the metro line from the city center.
It took another €50,000 to convert it into a home for their young family.
“I hated the thought that people would be able to see us from the pavement,” Mr. Manrique said recently. “But this place is a dream.”
Unlike their neighbors in northern Europe, city-dwelling Spaniards do not normally live in street-level properties. They prefer apartments on higher floors where no one can see them watching TV or eating dinner.
But recently in Madrid, despite strict legislation limiting changes in the use of property and bureaucratic backlogs, there has been a rise in the number of house hunters purchasing empty shops that open directly onto the sidewalk.
In 2019, a record 555 licenses were granted to convert former bakeries, hair salons and bars into residences, up from a mere nine in 2015.
All over Spain, as elsewhere around the globe, changes in shopping habits and the advent of online commerce have led to the closing of many family-run stores.
“Local commerce has been devastated in the peripheral neighborhoods,” said Mariano Fuentes, the Madrid City Council member responsible for urban planning.
But it is the combination of prohibitive house prices and sky-high rents, plus demand for tourist accommodations on websites like Airbnb, that has made some buyers turn to more creative housing solutions.
Ms. Fernández and Mr. Manrique started looking for a place of their own after their landlord raised their rent two years in a row. Despite holding steady jobs as a special needs schoolteacher and a sewage system technician, they couldn’t find anything cheap enough for their bank to provide a mortgage.
Then they hit on the idea of buying an empty shop.
To avoid being on constant display to passers-by, they opted for obscured glass windows that hide the view while letting light through.
Sitting on the Coca-Cola crate by the front door, Ms. Fernández described what had clinched her enthusiasm for her new home.
“I can keep an eye on the children when they play outdoors,” she said. “That was impossible when we lived in an apartment.”
A measure of the popularity of this trend is that Spain’s biggest online real estate advertiser, idealista.com, is advertising many commercial properties in Madrid that are described as potential homes.
That means that in compliance with City Council requirements, their facades are at least 10 feet long and 8 feet high, enabling windows to be put in, which would guarantee light and ventilation. Another stipulation for conversion to residential use is that the floor must be on or above street level, but not a centimeter below.
Some of the regulations, which vary from town to town, can seem rather arbitrary.
Miriam Mackay, 74, sold her apartment on the coast in Mallorca to buy a property in Madrid, where she spent most of her working life as a civil servant. Her future home — a shop that sold televisions for four decades before a brief stint as a music academy — may not have a sea view, but it opens onto a tiny rose garden that she is looking forward to sharing with neighbors.
But she is worried that the license will not be granted if she does not install the regulation shutters over the windows to guarantee enough darkness to sleep at night.
“You’d think that’s what curtains are for,” she said, rolling her eyes.
Even if that issue is resolved, Ms. Mackay may be in for a long wait. Mr. Fuentes, the urban planning councilor, admits that it takes six months, on average, for licenses to come through.
Carlos Manzano, 44, and Verónica Román, 43, are currently waiting for their license.
Their new home, once a sewing workshop, is on a quiet street with many boarded-up shops. Several commercial properties in this neighborhood have recently been transformed into homes.
A short flight of steps leads to their front door, which opens onto a breezy, open-plan living space, a couple of feet higher than the sidewalk. This feature allowed them to install windows above the eye level of passers-by.
“It created a greater sense of privacy, without compromising luminosity or a view out onto the street,” said Jorge Serrano, their architect at the Madrid-based firm ApuntoArquitectura.
Since Mr. Serrano started converting shops into homes in 2016, he has had more and more clients requesting this service each year.
A lot of his clients in downtown Madrid are investors who hope to make a profit by renting the finished products or selling them.
One such property, on the market for €149,000, or $164,000, is squeezed between a burger bar and a shop selling mobile phones on a leafy street on the north bank of the Manzanares River. With a surface area of 366 square feet, it is ideal as a weekend getaway for couples.
But in the residential districts surrounding the center, Mr. Serrano’s clients tend to be looking for larger properties — workshops, general stores, even garages — that can accommodate both family life and work.
Mr. Manzano and Ms. Román, a part-time sound technician and a personal assistant, paid €85,000 for their 1,464-square-foot property and €40,000 for the renovation.
Their mortgage, at €400 per month, is just over half what they were paying to rent an apartment in the city center.
From the outset, their idea was to convert the ground level into a home and to build a recording studio in the basement for Mr. Manzano to work on audiobooks in his spare time. This is also a way of getting around the legislation that prohibits putting living areas underground.
“It was the perfect plan,” Mr. Manzano said. “We’re paying much less than before, and I’ve got a recording studio for freelance work into the bargain.”