Unpacking the hard and soft challenges of district renovation
18-11-2025The task of renovating Europe’s neighbourhoods is a profound social and political challenge demanding more than just construction and ambition. This was the message right from the start of our Affordable Housing Initiative Days in Prague.
Marco Corradi, President of Housing Europe, the organisation coordinating the initiative, set the scene by acknowledging that the world has “challenged us profoundly.” From heatwaves demanding a rethink of urban spaces to complex socio-economic needs, he insisted it “takes courage to challenge innovation.” The Affordable Housing Initiative, by bringing diverse projects together, is proving that collective experience is the key to maturing solutions day after day.
The sheer scale of the challenge requires both local expertise and supportive policy. Miriam Bellusova of the European Builders Confederation stressed that genuine progress on affordable housing cannot happen without SMEs. The majority of buildings Europe will use in 2050 are already standing today, many in poor shape. “Renovation is needed, which is not always faster but worth it,” she noted, adding that fixing an entire neighbourhood requires “everyone working together.”
João Gonçalves from Housing Europe drove the conversation from logistics to policy, insisting that simply offering a “massive number of housing” is not enough unless we “bring the community” in. He highlighted market distortions, referencing reports of non-resident foreigners paying double the local price for homes. While amazing examples of renovation exist, he concluded, “we can’t do it with ambition alone but we also need the right framework.”
Lessons in scale and strategy from Sweden
Sweden’s housing history provides a vital but sobering lesson for Europe’s Renovation Wave. Housing expert Mårten Lilja detailed how Swedish housing policy, once a “cornerstone of welfare,” delivered enormous scale, most famously the “Million Programme” in 10 years in the mid-60s, creating a strong public sector.
Despite this history, a staggering 90% of the country’s multi-storey houses are not renovated at all today, a massive backlog caused by the withdrawal of renovation support and a taxation system that disincentivises upgrades. Lilja’s core message to Central and Eastern European colleagues was not to demolish, but to properly care for what they have, as Soviet-era blocks can serve for many more years if improved.
He did offer a successful path: the turnaround of Gårdsten, a declining suburb district. In 1997, the town of Gothenburg created the Gårdsten Housing Company, which successfully combined social responsibility with a business-like approach and dedicated, local management, proving that scale and decline can be overcome with long-sighted strategy.
Navigating the multi-owner reality in Central and Eastern Europe
In Central and Eastern Europe, the vast majority of residents are homeowners, meaning any large-scale work requires bottom-up buy-in.
Anu Sarnet of the Estonian Union of Housing Associations (EKYL) was open about the administrative reality: securing 51% agreeing owners to renovate a block can take “at least two years of convincing.” To overcome this, the renovation process became a social campaign. Housing associations utilised innovative community engagement tools, from TV shows and housing podcasts to design workshops, to secure buy-in.
In Tallinn’s Mustamäe district, once highly prestigious, renovation is now front-running. The initial building-by-building approach in 2010 proved insufficient, leading to projects like SOFTacademy to achieve greater scale and provide a unique identity. Anu emphasised that “money is never enough,” but there are plenty of soft tools to overcome the complexity of mass and multi-owner renovation.
Jana Kubankova of the Czech Chamber of Architects noted that while the majority of Czechs also live in large estates, renovation uptake remains low. She identified a key urban design flaw: the estates are not easy to adapt to today’s needs, which limits the “self-renewal” modern urban living demands.
Martha Giannakopoulou, a European Urban Initiative Expert, shifted the focus from the building to the neighbourhood, arguing that successful regeneration requires differentiating between the expensive “hardware” (physical renovation) and the essential “software” (legal assistance, community engagement, and management tools). She demonstrated this with examples like using placemaking to bring residents and technical experts together in Budapest to design communal spaces between buildings.
Trust is the new building material and our Lighthouse Districts show the way
The Affordable Housing Initiative Days showcased two EU-funded “Lighthouse Districts” pioneering on-the-ground renovation and showing that trust is priceless.
In Karviná, a coal-mining town, the ARV EU-funded project is simultaneously tackling energy transition and socioeconomic decline. Michael Sikora from the municipality explained their strategy combined hard investments (in buildings and energy) with soft measures (education, culture, and inclusion). They started with a visible, renovated municipal building, the health centre, as a symbol of change, and achieved rapid public perception improvements through low-cost aesthetic upgrades like updated façades and public seating.
In the Santa Ana neighbourhood of Ermua, Basque Country, the drOp EU project focused directly on solving a trust deficit. Andreea-Alexandra Nacu from Housing Europe detailed their methodology: they empowered residents by hosting a Mapathon to identify issues, tested changes through tactical urbanism, and opened a neighbourhood office to answer doubts. In a nutshell, they communicated openly and were present. Though project funds were limited, the initiative succeeded in establishing a foundation of trust, proving that shared power and legal frameworks are essential.
Practical roadblocks for our local pioneers
The conclusion offered an unfiltered look at the reality facing local pioneers who are risking resources and reputation to execute ambitious, district-level renovation.
Franco Amigoni from Fidenza, Italy, explained the struggle of combining mixed-use affordable housing on a brownfield with a fast-growing renewable energy community. For those who dare to go for district renovation, finding the right balance between finance, multilevel governance, and expertise is a constant struggle, especially with stubbornly hard-to-adapt post-WWII buildings.
In Ireland, David McCourt CEng and Co-operative Housing Ireland are retrofitting 220 vastly different homes. David joined the Initiative mostly to hear more tips around tenant engagement, which proved to be the most demanding task. To him, successfully bringing tenants on board requires significant time and capacity for genuine education and conversation. Other central issues include coordinating all involved parties, ensuring correct technology usage (like heat pumps), and translating complex EU funding into accessible information.
The system needs Radical simplification and finance
The consensus from the European Commission, builders, and financiers was that the system needs radical simplification, housing associations that enhance the operation, and a massive infusion of long-term capital.
Matthew Baldwin of the European Commission’s Housing Task Force provided the EU-level response, confirming that the era of “just build, baby, build” is over. A recent consultation on the EU Affordable Housing Plan received 13,000 responses, with citizens overwhelmingly asking for fundamental policy reform. Nearly half called for less red tape and easier permitting rules, while one-third demanded improved access to finance. The Commission is also asked to pressure cities to transform vacant office buildings into residential spaces.
Addressing the issue of fragmentation, Bernd Riessland of the Austrian Federation of Limited-Profit Housing Associations (GBV) offered a bold, self-directed solution: they created a daughter company of 50 people to test and implement different renovation solutions, inviting housing companies to see for themselves, an innovative way to overcome technical fragmentation.
Finally, Angeliki (Lina) Konstantinopoulou of SEFA addressed the critical financial gap. She called for a necessary “cascade architecture” for finance, allowing capital from the top (like the EIB) to efficiently reach small projects on the ground. To secure private investment, she argued for flexible guarantees for performance and a longer, subsidised regime that can be combined with private financing. This stability is essential for de-risking renovation and new delivery.
The Affordable Housing Initiative Days in Prague showed that success hinges on overcoming the deep systemic disconnects between policy, finance, and community reality. The evidence presented, from the vast, unrenovated housing stock in Sweden to the years required to secure resident buy-in in Central and Eastern Europe, underscored that ambition alone is insufficient; we need the right framework. Experts stressed that the system requires radical simplification, a massive infusion of long-term capital via a “cascade architecture” for finance, and a definitive end to the era of “just build, baby, build.” Ultimately, the pioneering work of the “Lighthouse Districts” proved that the true breakthrough comes from integrating expensive “hardware” (physical renovation) with the essential “software” (community trust, legal assistance, and management), confirming that long-sighted political will and dedicated local engagement are the keys to unlocking Europe’s renovation potential.
Keep on learning with us
The next opportunity to gain tools and resources to deliver truly sustainable and affordable housing solutions is officially here. Applications are now open for the 3rd round of the Lighthouse District Learning Programme, offering tailored, cost-free training to cities, housing providers, and companies across Europe. Enroll today to develop integrated approaches, avoid historical pitfalls in social housing, and join the network driving Europe’s fair energy transition.