I am in two minds about this: One hand, it does preserve the historic beauty of the house. While personally, I wouldn't want to live in a Victorian/Edwardian house because I like central heating, tiled floors too much, they are beautiful and so many people enjoy living there. I guess one possible solution is to attempt a urban renewal project of one of the more shadier neighborhoods (Hunter's point e.g.) and build high density buildings there. Of course, this would have to be coupled with enough percentage of the units being available for low cost housing so that it doesn't become the usual act of gentrification.
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