A palazzo was a place to live and work. The ground floor, ever prone to flooding, was turned over to workrooms and warehouses, while the high ceilings and elaborate frescos of the first floor, the piano nobile, were for living and entertaining.
Today, like many of Venice's residents, the merchants have moved on, driven away by practicalities and prices. Several palazzi have become museums or hotels: look at the Gritti Palace, arguably the most famous Venetian hotel, and the newly opened, extraordinarily discreet and beautiful Aman.
A private palazzo
Some palazzi remain in private hands. Filippo Gaggia and his wife Alessandra live in considerable style with their three young children and a spaniel called Socrates in Palazzo Loredan, on the Grand Canal beside Accademia Bridge.
Loredan was bought by Filippo's great-grandfather in the Twenties as a wedding present for his son and comes complete with a prime Dorsoduro location close to San Marco, an elegant 15th-century façade, direct water access, a calm garden and history as the former home of two doges (chief dukes of Venice).
As the third generation of his family to live there, Filippo has had to move with the times. He has divided his fivefloor palazzo into eight apartments, seven available to rent from £950 a week through his company Views on Venice.
"Venice is a place you can live easily and enjoy year round," says Filippo. "It is safe, there are no cars to worry about. My children aged 11, nine and seven walk to school. Property rents easily and friends will always come to visit."
Alessandra, from Bologna, was at first dubious about raising a family there. "Now I wouldn't leave," she says. "Filippo talks about living in the counstone tryside sometimes, but Venice is fantastic. We have plenty of friends here and it's our home."
Buying into a palazzo is the dream for foreign buyers who make up the bulk of purchasers in Venice, says Sebastiano Doria, of Savills associates Views on Venice, but quality of renovation remains an issue.
"In 2006, the municipality of Venice auctioned off many palazzi and many were converted into hotels. If they are done with the style and expertise of the Aman, for example, then it is good for the city, but there are too many examples of poor quality."
Which makes Palazzo Vendramin so special. Built as the home of the noble Vendramins, whose family portrait hangs in London's National Gallery, the palazzo is in Cannaregio, a brisk 15-minute walk from San Marco towards the train station. Most recently used as the planning office for the City of Venice, it has a brick and white stucco exterior and is surrounded on three sides by water.
Palazzo Vendramin has been extensively and well renovated over the past three years to provide 13 apartments priced from £496,500 to £3,557,700 for one to four bedrooms. Two vast staircases were temporarily removed while the building's underwater foundations were "tanked", something lead architect Alberto Torsello says 95 per cent of palazzi have not had done.
"The primary purpose of restoration was to keep the historical layering of the building," says Torsello. "The second purpose was to maintain its health, protecting from high tides and humidity. We have designed it to live in easily, to be historic, but also modern."
Original stairs have been retained, but lifts added where necessary. Centuries old frescos, painted ceilings and wooden and terrazzo floors have been renovated and mixed with LED lighting and modern crisp white bathrooms, with every detail overseen by the eagle eyes of Venice's draconian planning authorities.
Apartments, named after Venice's traditional craftsmen, range from 800 to 5,230 square feet. My favourite was Scaleter — the "pastry chef" — a light flooded, two-bedroom show apartment of 1,745 square feet, with an internal Gothic quatrefoil stone window.
Palazzo Vendramin launched this month with full completion due this year. "One apartment has sold and three are under offer," says Doria. "Through the ages, Venice's architecture was always ahead of itself. With this restoration we are taking an ancient building and carefully adapting it for 21st-century living."
- Views on Venice through Savills, 020 7016 3740
- Rentals at www.viewsonvenice.com