There are currently 7,000 vacant shops in London
Ministers want to turn boarded-up High Street shops into new flats and houses.
The UK government is due to launch a consultation into possible changes to planning regulations, making it easier to convert a commercial property into a residential one.
Communities Minister Brandon Lewis outlined the scheme to BBC Radio 4's You & Yours programme.
"If we change some areas to allow them to be residential, we increase the footfall for the town centre," he said.
Ministers in the Department of Communities and Local Government say creative thinking is needed because the way we shop has changed, with the rise in internet shopping and changes in lifestyle and working patterns.
"We need to think creatively about how to help town centres thrive in this new era," Planning Minister Nick Boles has said.
"We want to encourage... retail activity into the prime shopping streets in the heart of their town centres and adopt a more relaxed approach to underused retail frontages.'
Mr Lewis told the BBC programmes that changing planning regulations could remove the blight of empty shops while providing much needed new housing.
'Dovetail'The government has backed the Portas Pilot project which has seen towns awarded a share of a £1.2m pot to find innovative ways to regenerate the High Street.
Mr Lewis denied the new idea was an admission of defeat for that scheme, saying instead that the separate plans "dovetailed quite nicely to play another part in making sure we've got healthy and sustainable town centres and market places".
He added: "Some shops have struggled and in some places they will be in residential areas already.''
But he emphasised that it will be up to each council to decide what happens in their area.
"It's really important that this is controlled by the local authority who know what their town centre needs are," he added.
However, Matthew Hopkinson from the Local Data Company, which monitors High Street occupancy and vacancy rates, warned any changes must be made in conjunction with other economic developments.
"There's no point converting [shops] to residential if you don't have the jobs and infrastructure that make people want to go and live there." he said.
"The reality is, if a place does not operate economically people won't have the money to spend in shops."
A recent report by London councils estimated empty shops cost London £350m each year in lost business.
It also called for local authorities to be offered powers to curb the expansion of payday lenders and betting shops.
The study's authors wrote: "Empty shops are not only a symptom of a struggling High Street, they are also a cause.
"High Streets are social places that give a sense of belonging; - their loss could lead to social problems."
The Government is to launch a consultation on changing the planning regulations around empty shops.
Ministers say they want to make it easier to convert a commercial property into a residential one.
"If we change some areas to allow them to be residential, we increase the footfall for the town centre," Communities Minister Brandon Lewis told Radio 4's You & Yours.
Ministers say creative thinking is needed as the way we shop has changed.
Mr Lewis told the programme changing planning regulations could remove empty shops while providing the housing many communities needed.
DoubtThe government has backed the "Portas Pilot" project which has seen towns awarded a share of a £1.2m pot to find innovative ways to regenerate the High Street.
Asked whether the new proposals cast doubt on the success of the pilot, he said the plans "dovetailed quite nicely to play another part in making sure we've got healthy and sustainable town centres and market places.
"Some shops have struggled and in some places they will be in residential areas already.
"It's really important that this is controlled by the local authority who know what their town centre needs are."
This should not be the only solution, according to Matthew Hopkinson from the Local Data Company, which monitors vacancy rates.
He said: "There's no point converting to residential if you don't have the jobs and infrastructure that make people want to go and live there. The reality is if a place does not operate economically people won't have the money to spend in shops."
A recent report by London Councils estimated empty shops cost London £350m each year in lost business.
It also called for local authorities to be offered powers to curb the expansion of payday lenders and betting shops.
The study's authors wrote: "Empty shops are not only a symptom of a struggling high street, they are also a cause.
"They can cause a 'negative feedback loop' which discourages investment, decreases the offer on the high streets, keeps consumers from visiting and contributes to a general sense of decline and neglect.
"High streets are social places that give a sense of belonging; their loss could lead to social problems."
Source: BBC News - Business http://www.bbc.co.uk/news/business-23581304#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
