Specialist crowdfunders Property Partner have used a number of FOI requests to establish how many under-used and under-maintained lock up garages are owned by Councils in London.  Rough estimates indicate that 16,000 homes could be delivered if these sites were redeveloped, and a broader point is made about the release of public sector land. 

"Infill development" of garages has been carried out in the past, often by housing associations partnering with councils. Anecdotally, people are often not sorry to see these sites go, unless they are passionate about fly-tipping, al fresco wine tasting and amateur chemistry. Barely anyone seems to use the sites to house or maintain cars. 

The issue with any small development however is that site issues (legal and technical) can make them unviable because the eventual sales prices will not justify the costs. On public sector sites, proposals then get made about reducing or deferring land prices, leading to concerns about whether local authorities are getting "best consideration". 

Third party rights (think of all the people entitled in theory to use the garages, or who have rights over their forecourts, or who would lose access to light if too much is built to replace them) will either need to be brought out or perhaps appropriated by the local authority. 

It will make sense in theory to bunch garage sites together and seek a single developer, but the bigger the economic opportunity, the more likely it is that the contract will need to be procured under EU rules. 

All of these requirements or risks (and others) add up and explain why authorities haven't done more of this already. None of the concerns are insurmountable, but they all accrete and add up. That is not to say that we as a society shouldn't push for this idea and others to be implemented, if we are ever to address the issue that in a country that is getting ever richer and more advanced, it is increasingly unlikely that its inhabitants will get to own their home.