established through decades of practice – and also by the corrections made by the high courts.”

<table><thead><tr><td>Name</td><td>Type</td><td>Level</td><td>Roles</td></tr></thead><tbody><tr><td>Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation and Technology (BMK)</td><td>Public</td><td>National</td><td>Most important responsibilities in relation to densification are the development, coordination, monitoring of the national adaptation strategy.</td></tr><tr><td>Federal Minister for Agriculture, Forestry, Regions and Water Management</td><td>Public</td><td>National</td><td>This ministry is important for water-based NBS-based policies as it has competences in legislation over water-related issues (including flood risk management). As such it also issues subsidies for the renaturation of water ways. This ministry is traditionally run by the people's party since 2020.</td></tr><tr><td>Federal Ministry for Arts, Culture, Civil Service and Sport</td><td>Public</td><td>National</td><td>Within the Ministry Department IV/B/4 is responsible for supporting architects, architecture and building culture mediators, associations, other institutions, and initiatives in the field of architecture. Based on their works reports and guidelines on building culture have been released and adopted by the government.</td></tr><tr><td>Environment Agency Austria (EEA, Umweltbundesamt)</td><td>Public Enterprise</td><td>National</td><td>The most significant expert institution for environmental matters in Austria and a leading environmental advisor in Europe. The institution develops foundations for decision-making at the local, regional, national, European, and international levels engaging in dialogue with policymakers, public administration, businesses, academia, and civil society.</td></tr><tr><td>Austrian Conference on Spatial Planning (ÖROK)</td><td>Public Enterprise</td><td>National</td><td>Altough ÖROK has no formal competences in planning, it prepares the Austrian Spatial Development Concept, organises expert working groups, knowledge transfer and issues recommendation. It's main working ethos is to establish a broad consensus amongst actors involved in planning to support a coordinated spatial development.</td></tr><tr><td>KPC</td><td>Public Enterprise</td><td>National</td><td>The "Kommunal Credit Public Consulting" (KPC) handles environmental and adaptation subsidies, e.g. NextGen Funds for Biodiversity and Densification.</td></tr><tr><td>Federal State Governments</td><td>Public</td><td>Federal State</td><td>Responsible for legislation, e.g. spatial planning laws defining regional and local instruments (e.g. zoning categories) and setting out objectives; and nature protection laws defining protection schemes and objectives. Vienna has one law (Vienna Building Code), not differentiating between the federal state level and the local (municipal) level.</td></tr><tr><td>Spatial Planning Departments</td><td>Public</td><td>Federal State</td><td>Responsibility for developing spatial planning programs at the federal and regional levels. This includes strategies, action fields, development plans, etc. These have binding character for local spatial planning (municipalities).</td></tr></tbody></table>
<table><caption>Table AT12. Actors involved in densification, Austria. Source: own elaboration.</caption><thead><tr><td>Name</td><td>Type</td><td>Level</td><td>Roles</td></tr></thead><tbody><tr><td>Municipalities</td><td>Public</td><td>Local</td><td>Municipalities are key actors in spatial planning. They are responsible for local zoning and development plans, but can also issue local development concepts.</td></tr><tr><td>Austrian Association of Cities and Towns</td><td>Public</td><td>National-Local</td><td>The principal task is to represent the interests of local government in negotiations over the sharing of budgetary funds and taxing rights between the federal government, the federal states and local authorities (revenue sharing).</td></tr><tr><td>Architects &amp; Planners</td><td>Public</td><td>Local</td><td></td></tr><tr><td>Property Owners</td><td>Civil Society</td><td>Local</td><td></td></tr><tr><td>Private Investors and Developers</td><td>Private</td><td>Local</td><td></td></tr><tr><td>Social Housing Provider and Developer</td><td>Public/Private</td><td>Local</td><td></td></tr><tr><td>Social Partners</td><td>Civil Society</td><td>All Levels</td><td></td></tr><tr><td>Environmental NGOs</td><td>Civil Society</td><td>All Levels</td><td>WWF, Greenpeace, System Change not Climate Change, Fridays for Futures</td></tr><tr><td>Stadtmarketing</td><td>Public/Private</td><td>Local</td><td></td></tr></tbody></table>

## 6.5 Assessments, achievements and challenges

While rising land prices and greater land-use efficiency due to urbanization help to reduce land consumption, for Austria it is essential to highlight the urgent need for more effective policies like brownfield development, land mobilization strategies, higher land taxes, and urban agreements to achieve sustainable land use (Getzner & Kadi 2019). The challenges in the implementation and execution of these instruments and policies stem from Austria's federal structure, which is characterized by significant resistance, particularly from the federal states. One example for this resistance is visible in the difficulty to legislate maximum limits for land consumption. This issue is reflected in the failure to adopt the federal government's **Land Protection Strategy**, which was ultimately hindered by disagreements between the federal government and the federal states. The current policies of spatial planning in Austria also hinder effective implementation due to the conflicting role of municipalities in terms of land use and tax revenues from new constructions. Even though public interests defined in the zoning plans are relatively clear and well-established, they are not strictly followed in practice and regularly require interventions by the high courts.

In terms of housing affordability in relation to densification it is important to note the increased influence of private market actors. Market dynamics such as rising land prices on the one hand, and, the favourable financial environment, on the other hand, spurred significant investments by the real estate sector in the past decade. It also shifted the housing production to the disadvantage of limited-profit housing associations and towards profit-oriented housing
developers. To counteract these trends, the municipality of Vienna introduced a new zoning
category, but recent brownfield developments and new constructions are dominated by private
developers producing high-priced free market rental and ownership units (Plank et al. 2022).
Other measures such as vacancy monitoring and vacancy taxes are also implemented in urban
agglomerations and touristic regions such as Salzburg or Tyrol, with medium success rates
due to the high level of personnel resources required for implementation. However, measures
as these are not implemented nation-wide and highly depend on the local governments.

<table><caption>Table AT13. Potential Impacts of densification on housing inequalities in Austria. Source: own elaboration.</caption>
   <thead>
    <tr>
     <td>
      Impact Area
     </td>
     <td>
      Potential Impacts
     </td>
    </tr>
   </thead>
   <tbody>
    <tr>
     <td>
      Federal structure and governance fragmentation
     </td>
     <td>
      Austria's complex federal system limits effective implementation of densification strategies. Disagreements between federal and state governments (e.g. on the Land Protection Strategy) undermine coherent land use policy and enforceable land consumption limits.
     </td>
    </tr>
    <tr>
     <td>
      Municipal land use incentives and planning contradictions
     </td>
     <td>
      Municipalities are incentivized to approve new developments due to tax revenues, leading to inconsistent application of zoning laws. Despite clear public interest goals in planning documents, practical implementation often deviates, requiring court intervention.
     </td>
    </tr>
    <tr>
     <td>
      Market-driven urban development and affordability
     </td>
     <td>
      High land prices and favourable financing conditions have increased the influence of private developers especially in urban areas, leading to a shift from limited-profit housing associations to profit-driven housing production. This has exacerbated affordability issues and reduced the share of limited-profit housing associations.
     </td>
    </tr>
    <tr>
     <td>
      Zoning and land mobilization tools
     </td>
     <td>
      Recent zoning law reforms, such as in Vienna, aim at protecting affordable housing through land use designations (applicable to all types of rezoning, also brownfield conversions). However, in other federal states and municipalities brownfield developments remain largely dominated by private actors limiting affordability.
     </td>
    </tr>
    <tr>
     <td>
      Vacancy management
     </td>
     <td>
      Instruments like vacancy monitoring and vacancy taxes are in place in some regions (e.g., Salzburg, Tyrol) but their enforcement and control is labour-intensive and not implemented nationwide due to the restricted fees, that can be applied. Their success varies greatly by local government commitment and administrative capacity.
     </td>
    </tr>
   </tbody>
  </table>
7 Summary and discussion of results

As this report has shown, over the past decades, Austria has developed a wide range of environmental and energy policies (EEPs) aimed at retrofitting buildings, which nowadays shifted towards decarbonizing heat systems, fostering urban densification and limiting urban sprawl, while more recently also implementing nature-based solutions (NBS) in response to climate change gained importance. While each policy field shows varying levels of maturity and integration, they are shaped by a common set of challenges: federal fragmentation, uneven implementation capacities, and weak integration with housing equity objectives. This section summarises key developments in each policy domain and highlights the associated governance mechanisms and trade-offs.

## 7.1 Changes in Environmental and Energy Policies and their Governance Implications

Housing retrofitting policy in Austria has evolved from a predominantly technical focus on energy efficiency toward a broader strategic orientation centred on climate mitigation and the decarbonisation of heating and energy cost reduction. This shift was initially shaped by European Union directives, and increasingly by national decarbonisation commitments and lately by recurring energy price shocks and high inflation. At the federal level, the actor constellation has expanded from federal energy ministries to forming advisory networks (e.g. Klima:aktiv) and intermediary agencies (e.g. Klima- und Energiefonds). Through decentralisation of housing subsidies, the federal state authorities in 1989 became a very important actor in steering housing retrofits, especially in relation to social and affordable housing. While financial incentives remain the dominant policy instrument—channelled through national and housing subsidies of the federal states—the governance structure remains fragmented. Regulatory mandates are limited, and implementation is hindered by ownership structures and administrative challenges, especially in the condominium and rental sectors. As a result, retrofitting remains a strategically ambitious yet structurally constrained policy field.

The strategic orientation of NBS policy in Austria has broadened significantly, moving from a focus on biodiversity and landscape protection (through green infrastructure) to a more integrated framing that encompasses climate adaptation, urban resilience, and public health. This evolution is reflected in successive iterations of the National Adaptation Strategy (NAS), most notably NAS 3.0 (2024), which prioritises urban cooling, flood management, and ecosystem restoration through NBS. Implementation, however, is predominantly local and territorially uneven. While federal ministries and federal states shape strategic direction and distribute (little) support (e.g. through the Biodiversity Fund), municipalities are central to land-use decisions. They, however, largely need to stem investments within existing budgets, which are tight in smaller municipalities. Larger cities, especially Vienna as a federal state and a municipality, can steer NBS through a wider range of policy instruments, including planning guidelines, subsidy schemes, and regulatory provisions in building codes. Nonetheless, gaps in intergovernmental coordination and limited municipal capacity restrict the institutionalisation of NBS across the Austria.
Densification has shifted from being primarily an environmental concern about soil sealing and sprawl to a multifaceted urban policy objective encompassing sustainability, infrastructure efficiency, and housing supply. Its strategic relevance has grown in response to rising land costs, demographic pressures, and national climate targets. Municipalities, particularly Vienna, have taken a lead role through zoning reforms, integration of greening standards, and public-private development frameworks. However, liberalised tenancy legislation and the growing dominance of private developers have increasingly decoupled densification from social affordability goals. National guidance exists but is only loosely integrated with implementation mechanisms. Policy instruments include spatial planning laws, zoning tools, and incentive structures, but affordability-oriented regulation remains underdeveloped. As a result, densification is both politically supported and socially contested depending on the local context.

## 7.2 Trade-offs between EEPs and Housing Inequalities

Austria's retrofitting programs, especially in the last government period, are extensive and relatively well-funded. These efforts have contributed to measurable reductions in emissions from the residential sector since the 1990s, reflecting improvements in energy efficiency and a gradual shift to less carbon-intensive energy sources. However, renovation rates remain below climate neutrality targets, with deep renovations stagnating at around 1% annually, far below the rate required to meet 2040 decarbonisation targets. A key strength of the Austrian model lies in its potential use of housing subsidies as a vehicle for (social) housing retrofits.

However, housing retrofit policies exhibit significant distributional asymmetries. Subsidy structures tend to favour owner-occupiers and detached housing, marginalising tenants (specifically in the private sector in buildings with no rent-protection) and residents of multi-owner buildings. Legal frameworks do not adequately resolve the landlord-tenant dilemma or collective decision-making barriers in condominiums. Moreover, retrofits in private rental housing often lead to rent increases, diluting energy cost savings and exacerbating affordability pressures. Though some subject-based measures and targeted programmes like "Säuber Heizen für Alle" have been introduced, retrofitting remains challenged by administrative complexity, institutional fragmentation, and sectoral silos, rather reproducing existing social and tenure-based inequalities.

Regarding NBS, the Austrian Strategy for Adaptation to Climate Change (NAS), although lacking legal force, has guided actions across federal and state levels since 2012. The evolution of NAS has progressively emphasised the multifunctional benefits of green and blue infrastructure, and of Nature-based Solutions in NAS 3.0 in 2024. Despite these strategic advances, the implementation of NBS remains inconsistent. Territorial disparities based on the dominance of federal states in land-use and environmental legislation have slowed systemic uptake.

Social concerns have received increased attention in recent strategy updates, acknowledging the need to shield vulnerable populations from climate risks such as flooding and heat. Nevertheless, national social policies are still inadequately aligned with climate adaptation needs, and coordination between environmental and social planning remains weak. At the
urban level, evidence from Vienna reveals spatial disparities in green space availability, with central, dense neighbourhoods particularly underserved. In combination with the predominance of decommodified rental housing in these neighbourhoods, studies have highlighted potential socio-spatial displacement risks. Nevertheless, policy actors (such as politicians, civil servants, public planning entities,...) and stakeholders (such as planning experts, LPHA, real estate developers,...) consider risks of displacement through greening currently as limited.

Densification policies in Austria are strongly influenced by the interplay of spatial planning, land-use pressures, and market forces. While urbanisation trends and land scarcity have encouraged greater land-use efficiency, institutional and political resistance—particularly from Länder governments—has slowed down national efforts to enforce limits on land consumption. A key example is the failure of the federal Land Protection Strategy due to lack of consensus among governance levels. Municipalities play a central role in densification through zoning and development planning, but they face contradictory incentives: fiscal dependence on new construction revenues undermines sustainable land-use goals. As such, spatial planning instruments, although well-established, are frequently bypassed in practice, requiring court interventions to uphold planning standards.

From a housing inequality perspective, densification goes hand in hand with an increased dominance of commodified housing provision. Rising land values and a favourable financing environment have enabled private actors to outpace limited-profit housing associations, diminishing the production of housing that is more affordable. Although Vienna, for instance, has implemented progressive tools—such as new zoning categories for affordable housing— other cities lag behind, with brownfield developments often prioritising private and commercial housing developers. Furthermore, efforts to regulate vacancy and speculative use of housing stock have had limited success due to high enforcement costs and uneven implementation.
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# NATIONAL REPORT ON THE REGULATORY SYSTEM OF EEPs in FRANCE

## 1. Executive summary

The main objective of this report is to provide insights on the national regulatory and institutional system of Energy and Environmental Policies (EEPs) in France. The analysis specifically focuses on housing retrofitting (section 4), nature-based solutions (section 5), and densification policies (section 6), framed within the broader context of national climate change mitigation and adaptation policies (introductory section). The concluding section revolves around main changes in EEPs in France and outlines hypotheses on the relations and trade-offs between these policies and the housing inequalities that are further discussed in another report on the housing system from a multi-level perspective in France (D4.2).

Since the late 1990s, France has progressively strengthened its commitment to climate mitigation and adaptation through national strategies (SNBC) and plans (PNACC). Parallel to this, national legislation has progressively translated these strategic orientations into specific objectives and introduced regulatory and financial tools. However, challenges emerge, and recent obligations face political backlash, leading to setbacks and implementation delays.

Housing retrofitting policies in France include specific targets for the social housing stock, particular attention to energy poverty issues, and a focus on renovating the most energy-inefficient buildings. In recent years, there has been a shift of focus from fiscal incentives to direct subsidies, with recent particular focus on owner-occupiers and low-income groups. Despite growing involvement of local authorities and horizontal coordination, the national level continues to play a central role in setting objectives, regulatory frameworks, and implementation tools. No specific tools, such as rent control after renovation, are currently in place to address affordability challenges, which raises the risk of renovictions, while the regulatory framework remains undifferentiated across urban contexts and regions, potentially potentially exacerbating spatial inequalities.

Densification policies have evolved from a focus on the reuse of urban areas near public transport to the integration of zero land take objectives as part of a broader land sobriety scope. Several fiscal and regulation tools have been introduced to support the reuse of industrial sites or vacant buildings, with varying outcomes depending on the degree of urbanization of the targeted areas (metropolitan, peri-urban, rural, etc.). While densification regulations affect local planning tools, their implementation remains optional and uneven, also depending on the willingness of local authorities. Zero land take objectives face national-local tensions and political resistance especially in smaller urban contexts and rural areas and may lead to uneven territorial impacts.

The institutionalisation of NBSs is a recent process, driven by European and international frameworks. There are no regulatory or financial tools explicitly dedicated to NBSs, and implementation mainly relies on incentivising instruments such as project promotion,
information dissemination, and guidelines. The absence of shared definitions, regulations, and
targeted funding makes the implementation of NBS particularly complex. More recently, the
*Plan Nature en Ville*, part of the national biodiversity strategy, has reinforced the focus on the
integration of nature into urban areas. Overall, the landscape remains fragmented, shaped
largely by local political will.

## 2. Introduction and methodology

The main objective of this report is to provide a national assessment of the regulatory systems of Energy and Environmental Policies (EEPs) in France. It specifically focuses on housing retrofitting, nature-based solutions, and densification policies which are framed within the context of national climate change mitigation and adaptation policies.

### 2.1 Introduction

Since the late 1990s, France has progressively strengthened its commitment to climate change mitigation and adaptation, developing national plans, regulatory framework aligned with, and evolving in parallel to, international and EU targets. As stated by Halpern (2017), the origins of EEPs in France, a country with a unique position as a nuclear state within its context, can be traced back to the ecological and anti-nuclear movements that emerged in the late 1960s and subsequently in the 1970s. As stated by Poupeau (2013) there is a strong path dependence in energy and environmental policies: "*The state's choices are still heavily influenced by the paradigm of nuclear energy, considered a cheap source of energy that contributes (or would contribute) to national energy independence, and is moreover highlighted for its contribution to the fight against climate change*". Recently, the "*Affaire du Siècle*" campaign represents an emblematic example of the growing wave of criticism directed at the French government by environmental organizations, who engaged in legal litigation for inaction against climate change (Redon et al., 2020). This criticism focuses on the deregulation in climate policies and the government's failure to take meaningful action to meet its commitments under international agreements (e.g. the Paris Agreement).
<figure><img src="image_16.png" /></figure>

Figure FR1. timeline illustrating key EEPs in France over time within the European and global contexts. In light blue the evolution of french ministries in charge of EEPs.

In line with the Kyoto Protocol objectives, France's commitment to addressing climate change emerges between the late 1990s and the early 2000s, particularly with the adopted Programme National de Lutte Contre le Changement Climatique (PNLCCC) and the Plan Climat. In 2007 an important milestone was represented by the merger of the Ministry of the Ecology, the Ministry of Infrastructure and part of the Ministry of Industry as part of the administrative reorganisation under the Sarkozy presidency (Bonnaud and Martinais, 2014)<fnref n="26" />. Shortly afterwards, the environmental laws Grenelle I<fnref n="27" /> and Grenelle II<fnref n="28" /> were adopted, defining the national regulatory framework that prioritised environmental issues across different domains, such as transportation, energy and agriculture. The Loi de Transition Énergétique pour la Croissance Verte (LTECV) of 2015²⁹, coincided and alligned with the adoption of the Paris Agreement and the elaboration of the Agenda 2030.

More recently, the Loi Energie Climat in 2019 sets national targets in line with European goals, committing to achieve carbon neutrality by 2050. Later in the same year, also in response to the Yellow Vest movmenet and in name of "climate justice", the Macron presidency launched the Convention citoyenne pour le climat (CCC), as citizens consultation aimed at supporting the elaboration of measures to reduce GHG emissions.

<footnote n="26">²⁶ It led to the creation of the DGALN (*Direction Générale de l'Aménagement, du Logement et de la Nature*), which brings together competences for urban planning, landscape planning, housing, and nature</footnote>

<footnote n="27">²⁷ *Loi n° 2009-967 relative à la mise en œuvre du Grenelle de l'environnement.* Available at the link https://www.legifrance.gouv.fr/loda/id/JORFTEXT000020949548</footnote>

<footnote n="28">²⁸ *Loi n° 2010-788 portant engagement national pour l'environnement*, Available at the following link: https://www.legifrance.gouv.fr/loda/id/JORFTEXT000022470434/</footnote>

<footnote n="29">²⁹ *Loi n° 2015-992 relative à la transition énergétique pour la croissance verte*. Available at https://www.legifrance.gouv.fr/loda/id/JORFTEXT000031044385. From now on referred to as the *Loi Transition Énergétique*</footnote>
As highlighted by Réseau Action Climat (2021) the French government supports the EU's overall target, contributing significantly to the push for higher climate ambition (see Annexe 2). However, France did not support the European Parliament or countries such as Denmark and Sweden in advocating for even more ambitious goals, such as 60% or 65% GHG reductions by 2030. Overall, France commits to the EU's long-term strategy of becoming the first climate-neutral continent by 2050, primarily based on two pillars: the *Stratégie Nationale Bas-Carbone* (SNBC), for implementing climate change mitigation policies, and the *Plan National d'Adaptation au Changement Climatique* (PNACC), specifically dedicated to France's adaptation strategy.

The **Stratégie Nationale Bas-Carbone** (SNBC) was introduced in 2015 by the *Loi LTECV*, with the aim of establishing a framework to guide the implementation of national energy and climate objectives (Poupeau, 2023). The latest adopted version (SNBC2), revised in 2018-2019, aims for a 100% reduction, making France a net-zero emissions country by 2050 and defining an intermediary objective of 40% reduction in GHG emissions by 2030 compared to 1990 levels<fnref n="30" />. While overall objectives over the long term are set in national plans and programs (e.g., the SNBC), the actual resources to meet these goals are allocated through annual budget processes, which may result in year-to-year adjustments of operational targets. The elaboration of SNBC3 started in 2023 at includes the aim of raising the 2030 target from 40 to 50% reduction in GHG emissions by 2030. It remains an ongoing process also affected by political instability.

In addition, since the early 2000s, France has also developed a **Plan National d'Adaptation au Changement Climatique (PNACC)**, starting with the *Stratégie d'adaptation au changement climatique* (2006) and the one with PNACC1 (in 2011) and PNACC2 (in 2018). At the end of 2023, a public consultation phase was launched to inform the drafting of the third version of plan<fnref n="31" />. The goal is to protect the population and build societal resilience, taking into account the projected +4°C temperature rise in France by 2100 compared to pre-industrial levels, considering that this rise will manifest differently across the entire national territory (Réseau Action Climat, 2024). The new PNACC includes 51 measures organized around 5 main pillars<fnref n="32" />. According to the document presenting the PNACC 3 "*The measures have been designed with an approach that takes into account the differences in situation between territories and actors, with the goal of not increasing or creating inequalities, both social and territorial, by identifying the populations and territories least able to cope and therefore most in need of support*"<fnref n="33" />.

<footnote n="30">³⁰ The SNBC sets emission thresholds not to be exceeded from 2019 to 2033 (the carbon budgets). The SNBC2 sets carbon budgets for 2033 and, among the strategic orientations for specific sectors, prioritizes the building and public works sectors in achieving France's ambitious climate targets. It is available at the following link: https://www.ecologie.gouv.fr/sites/default/files/documents/2020-03-25_MTES_SNBC2.pdf. A summary in English is available here: https://unfccc.int/sites/default/files/resource/en_SNBC-2_summary_compl.pdf</footnote>

<footnote n="31">³¹https://consultation-pnacc.ecologie.gouv.fr/sites/default/files/2024-10/Document_de_presentation_du_PNACC_3.pdf</footnote>

<footnote n="32">³² Namely: protecting the population, particularly the most vulnerable groups; ensuring the resilience of territories, infrastructures, and ecosystems; adapting human activities; protecting natural and cultural heritage; and mobilizing society</footnote>

<footnote n="33">³³ See footnote 56</footnote>
## 2.2 Methodology

Following this introduction, the report is organized into three sections, each focusing on a single type of EEP, namely: housing retrofitting, nature-based solutions, and densification policies in France. Key transversal issues are addressed in subsections for each selected EEP, including the emergence of the issue and related policy decisions, the implementation process, the size and role of the market, the multilevel governance framework, achievements, assessments, and challenges. The final section provides a summary and discusses the changes in energy, environmental, and retrofitting policies, along with their impacts on multilevel governance across the EU, national, and local levels. The report draws on a mixed-methods approach, including document analysis, policy lab and semi-structured interviews.

*Document analysis* include both grey and scientific literature. Grey literature mainly consists of policy briefs, technical reports, regulations, and legislative acts collected from institutional websites and available in open access. Scientific literature is collected and organized into thematic clusters according to whether it refers to housing retrofitting, Nature-Based Solutions or densifications policies.

A *policy lab*, in the form of a focus group, was held in Paris in March 2025 involving policy makers, national agencies, social housing representatives, experts and advocacy groups on housing needs. The main aim was to gather worldviews from a plurality of stakeholders on key issues. The main topics under discussion included 1) the synergies and trade-offs between environmental and social goals and 2) cooperation and frictions in multilevel horizontal and vertical governance, and territorial variations (Cremaschi et al., 2025³⁴). The policy lab helped in gathering information for this report and collecting contacts for the interview phase.

*Semi-structured interviews* were conducted between May 2025 and July 2025 and contributed to enriching the present report, as well as integrating additional references and documents. Different institutions were engaged, including national ministries, governmental and para-public agencies, interests and advocacy groups and experts (see Annex 1 for the list of interviewees). The purpose of interviews is twofold: to fill the research gaps identified in a draft version of the present report, and to delve deeper into first hypotheses on the relations and trade-offs between EEPs and the housing issues.

## 3. General governance system

In France, multi-level governance is organized around the State, regions, departments, intercommunalities, and municipalities. While decentralisation reforms since the 1980s have transferred significant responsibilities to local authorities, particularly to intercommunalities for urban planning, the State retains a central role in setting overall objectives and regulatory frameworks, especially in housing and energy renovation policies.

<footnote n="34">³⁴ unpublished document reporting on the first Policy Lab held in March 2025 at SciencesPo, Paris. It offers insights into current policy debates on the social consequences and trade-offs of green policies, as perceived by key stakeholders in France.</footnote>
In France, housing policy remains very much centralized despite four decades of devolution of
various sectors of urban policy to local authorities. The central state assumes a key role in
defining the main policy orientations and instruments for the production and financing of
housing. The *Housing and Construction Code* sets rules at the national level, which cannot be
adjusted; while 80% of all state aid depends on schemes set at the national level (Driant
2024)<fnref n="35" />. Likewise, key housing policies are conducted by the central state, such as tax
incentives to support individual investment into private rental housing, or through national
agencies (such as ANRU for urban regeneration or ANAH for housing retrofitting). This
centralization is due to a combination of political-economic factors: keeping control of a key
industry (in terms of economic growth, employment, tax revenues), ensuring an equal
treatment of local situations across the country, and a mistrust of local interests (Ibid.). Indeed,
housing was not included in the first devolution laws of the 1980s, or only indirectly as the
36,000+ municipalities had become responsible for zoning plans through which they could
control construction. For policymakers, further devolution has been conditioned on reaching a
form of institutional integration above the municipalities through the creation of intercommunal
institutions (1999), which then became responsible for setting local targets and implementation
measures through elaborating local housing programs (*Programme local de l'habitat*, PLH),
either as a condition of exercising the distribution of construction subsidies on behalf of the
central state (2004), or mandatory (2009). However, such distribution of construction subsidies
(*aides à la pierre*) for the social and private housing remains optional, while their volumes are
still set by the central state and remain limited overall (Driant 2014)<fnref n="36" />. Since then, the role of
intercommunal institutions in housing has been reinforced by subsequent reforms, which have
transferred them the responsibility of zoning plans (*Plan local de l'urbanisme intercommunal*,
PLUi) from municipalities (2014), as well as in social housing allocation. Additional transfers
have been opened to some as leading organisations on housing (*autorité organisatrice de
l'habitat*) since 2022, but only three of them have opted out for this status.

It should be noted that the Paris region is specific in that regard. First, the governance of
housing remains particularly fragmented given multiple actors, and the fact that intercommunal
institutions are more recent (Le Hervet 2012). In particular, the regional council has attempted
to endorse a key role in the coordination of local housing policies through the target set by its
regional plan (Schéma directeur régional de la région Île-de-France, SDRIF)<fnref n="37" />. Second,
additional, specific rules apply. On the one hand, the City of Paris is also a district
(département), which means that it combines attributions, technical and financial resources
that would otherwise be separate across different tiers of government. Additionally, the
metropolitan authority (Métropole du Grand Paris) created in 2016 should adopt a plan on
housing and emergency shelter (Plan métropolitain de l'habitat et l'hébergement)<fnref n="38" />. On the

<footnote n="35">³⁵ The remainder of state aid financed by local authorities is mostly made up of brick-and-mortar subsidies contributing to the financing of social housing construction and renovation.</footnote>

<footnote n="36">³⁶ By that time, the most developed form of devolution was the transfer of social support schemes (*Fonds de solidarité pour le logement*, FSL) to districts (*départements*).</footnote>

<footnote n="37">³⁷ In addition to its implication in the financing of social housing production. However, the regional council had to revise its plan to adjust its housing targets with those set by the central state (from 60,000 to 70,000). Moreover, the commitment of the regional council towards housing has slowed since its shift to the right: recently, subsidies for social housing were stopped (source: Interview with housing policy expert, April 22, 2025).</footnote>

<footnote n="38">³⁸ Although it did not in practice, due to political disagreement over the geography of social housing production. See D4.2 for more details.</footnote>
other hand, the central state retains control over key elements: housing construction targets (set at 70,000 per year since the Grand Paris law of 2010) and their spatialisation (*territorialisation des objectifs de logement*) through negotiations between state representatives (Prefect) and local authorities, as well as the co-chairing (with the head of the regional council) of the regional committee on housing and shelter (*comité régional de l'habitat et de l'hébergement*, CRHH) that has to elaborate a regional plan (SRHH). This plan is instrumental in spatialising the housing construction targets, and is based on many elements prepared by the central state administration<fnref n="39" />.

In 2008 the DGALN (*Direction Générale de l'Aménagement, du Logement et de la Nature*) was created to merge responsibilities for urban planning, housing, nature, and biodiversity under a single directorate. The organisation of competences and cross-sector coordination within the DGALN is strongly influenced by the broader ministerial structure, which has evolved over time with varying degrees of stability<fnref n="40" />. Within DGALN, Nature-Based Solutions are mainly integrated by the DEB (*Direction de l'Eau et de la Biodiversité*), but also by the *sous-direction de l'aménagement durable* within DHUP (*Direction de l'Habitat, de l'Urbanisme et des Paysages*). Densification issues fall primarily under the *sous-direction de l'urbanisme réglementaire et des paysages*, which, together with the *sous-direction de l'aménagement durable*, are the two main sub-departements working on urban planning. Finally, energy renovation is addressed both by the *sous-direction du financement et de l'aménagement* and by the interministerial body CIPREB, currently responsible for coordinating the national energy renovation plan for buildings (*Plan de Rénovation Énergétique des Bâtiments*).

<footnote n="39">³⁹ Interview with housing policy expert, April 22, 2025.</footnote>

<footnote n="40">⁴⁰ Today, the DGALN operates under the Ministère de la Transition écologique, de la Biodiversité, de la Forêt, de la Mer et de la Pêche, but also interacts with other ministries, such as the Ministère de l'Aménagement du Territoire et de la Décentralisation</footnote>
Direction générale de l'aménagement, du logement et de la nature (DGALN)

sous direction des ressources humaines et des compétences
sous direction territoires et usagers (T&U)

Direction de l'habitat,
de l'urbanisme et des paysages

<figure><img src="image_17.png" /></figure>

<figure><img src="image_18.png" /></figure>

Sous-direction du financement et de l'économie du logement et de l'aménagement (FE)

<figure><img src="image_19.png" /></figure>

Sous-direction de la qualité et du développement durable dans la construction (QC)

<figure><img src="image_20.png" /></figure>

Sous-direction des politiques de l'habitat (PH)

<figure><img src="image_21.png" /></figure>

Sous-direction de l'urbanisme réglementaire et des paysages (UP)

<figure><img src="image_22.png" /></figure>

Sous-direction de la législation de l'habitat et des organismes de logement social (LO)

<figure><img src="image_23.png" /></figure>

Sous-direction de l'aménagement durable (AD)

Direction de l'eau et de la
biodiversité

Sous-direction de la coordination, de l'appui, de la stratégie et du pilotage des politiques de protection et de restauration des écosystèmes (CASP)

<figure><img src="image_24.png" /></figure>

Sous-direction de la protection et de la restauration des écosystèmes terrestres (ET)

<figure><img src="image_25.png" /></figure>

Sous-direction de la protection et de la gestion de l'eau, des ressources minérales et des écosystèmes aquatiques (EARM)

Sous-direction de la protection et de la restauration des écosystèmes littoraux et marins (ELM)

Gouvernance Partagé

<figure><img src="image_26.png" /></figure>

Coordination gouvernementale du plan de rénovation énergétique des bâtiments (CIPREB)

Délégué interministériel forêt-bois

Plan urbanisme construction architecture (PUCA)

Mission plan bâtiment durable (MPB)

Figure FR2. Schematic representation of the distribution of competences among the directorates and sub-directorates of the DGALN. Red, green, and blue circles refer respectively to housing retrofitting, Nature-Based Solutions, and densification. The solid black circle refers to urban planning, while the dashed black circle refers to housing

Parallel to the horizontal distribution of competences within the ministry, governance also unfolds vertically, involving multiple levels of government from the national to the local scale, each with its own responsibilities.

The governance of housing retrofitting operates through a multi-tiered structure from the nation to the intermunicipal level.

- Although local authorities are playing an increasingly active role in supporting the implementation and coordination over **building renovation** and energy poverty matters, the national level plays a central role in terms of defining main energy and climate objectives, setting regulations and designing implementation mechanisms.

- Regarding **densification** policies, the State plays a primary role by defining long-term objectives for combating land take (Zero Artificialisation Nette by 2050) and setting medium-term objectives and conditions for local authorities (a 50% reduction of land consumption by 2030). The implementation of these policies is entrusted to planning instruments at the regional level (SRADDET) and at the inter-municipal level (SCOT) and municipal level (PLU).

<table><thead><tr><th></th><th>Housing</th><th>Housing retrofitting</th><th>NBSs</th><th>Densification</th></tr></thead><tbody><tr><th>National level</th><td>Definition of national targets (and for Greater Paris: local targets) Setting of regulatory, financial and support tools</td><td>Definition of energy and climate objectives as part of national regulations</td><td>Definition of biodiversity and water management objectives</td><td>Definition of long term and medium-term objectives for combating land take</td></tr></tbody></table>
<table><caption>Table FR1. competence of ecological transition and housing policies across governance levels</caption><thead><tr><th></th><th>Financing of housing policy (80% of all public aids), including through national agencies (Anah)</th><th>Setting of regulatory, financial and support tools</th><th>Setting of regulatory and planning tools</th></tr></thead><tbody><tr><td>Regional level</td><td colspan="3">Elaboration of regional planning frameworks integrating energy and climate issues (SRADDET) and housing construction targets</td></tr><tr><td></td><td>Distribution of additional subsidies for social housing construction, remediation against poor housing conditions, etc. In the case of the Ile-de-France region: co-chairing the regional committee on housing (CRHH)</td><td>Holding the competence over building renovation and decentralized renewable energy production<br>Elaboration of energy efficiency strategies</td><td>In the case of the Ile-de-France region: co-chairing the regional committee on housing (CRHH)</td></tr><tr><td>Departmental level</td><td>Elaboration of departmental plans to coordinate housing policy between intercommunal level (PLH) and the rest<br>Distribution of additional subsidies for social housing construction<br>Management of Housing solidarity fund (Fonds de solidarité logement, FSL)</td><td>Holding the competence over energy poverty<br>Coordination of intermunicipalities, local actors and organisations</td><td></td></tr><tr><td>Intermunicipal level</td><td>Elaboration of intermunicipal housing programs (PLH) that sets housing construction targets<br>Elaboration of intermunicipal zoning plans (PLUi) that regulates land-use<br>Distribution of additional for social housing subsidies<br>In the case of the Paris region: elaboration of a housing plan (PMHH) by the metropolitan authority</td><td>Integration of climate-related issues into intermunicipal planning frameworks (SCoT for one or more EPCI combined with single municipalities, PLUi for each EPCI)<br>Elaboration of a program to improve energy efficiency and reduce GHG emissions (PCAET by EPCI). PCAET includes quantitative climate and energy objectives</td><td>Local implementation depends on contextual conditions and remains non-binding</td></tr><tr><td>Municipal level</td><td>Implementation through delivery of construction permits (if not transferred to intermunicipal institution), eminent domain purchase powers, etc.<br>Distribution of additional subsidies for social housing construction</td><td>Supporting households and coordinating locally renovation programs</td><td>Local experimentation dependent on political will, resources and interpretation of concept</td></tr></tbody></table>
## 4. Housing retrofitting

The late 1990s saw a growing debate on climate issues, and from the beginning of the millennium, a series of political initiatives aimed at translating general objectives and sectoral initiatives followed. Over the last two decades, and primarily through its technical agencies, the central government carried out this exercise of policy promotion and support for an increasingly sophisticated debate. France's initiatives accompanied and sometimes influenced EU directives on building energy regulations since 2000, although it has taken a cautious stance on some measures such as ETS extension for fear of social impacts.

### 4.1 The policy cycle: emergence of the issue and policy decisions

Over time, France supported the increasingly ambitious objectives proposed by the European Commission and developed a number of national policies and regulations affecting housing retrofitting (Figure FR3). Recently, France has contributed to the European debate by bringing forward some of the provisions set out in the *Loi Climat et Résilience*, such as the gradual ban on renting energy-inefficient housing (*passoires thermiques*). However, France adopted a more cautious approach to extending the EU Emission Trading Systems (ETS) to building heating and road transport, due to the potential social and economic impacts on vulnerable households with no access to low-emission alternatives. As Réseau Action Climat (2021) stated about the extension of ETS2: "*The government fears a new social crisis, similar to the one it experienced with the Gilets Jaunes protests, this time on a European scale*".

<figure><img src="image_27.png" /></figure>

Figure FR3. timeline illustrating key policies and regulations in France and EU affecting housing retrofitting. Binding documents are marked with filled red dots.

In 2004 the **Plan Climat**<fnref n="41" /> outlined several guidelines for combating climate change, focusing on improving the energy performance of existing buildings. It highlighted key tool to obligate

<footnote n="41">⁴¹ https://unfccc.int/resource/country/plan_climat_fr.pdf</footnote>
energy producers to finance energy-saving projects in construction and industry and to propose tax credits to incentivize property owners to invest in energy efficiency improvements<fnref n="42" />. In 2006, France transposed the European Directive on the Energy Performance of Buildings (EPBD) and introduced the Diagnostic de Performance Energetique (DPE). In this context, The *Plan Climat* also provided local authorities the option to exempt property owners from property tax (*taxe foncière*) if they carried out works improving their energy label.

After that, the **Loi Grenelle I** (2009) set a target to reduce energy consumption in the existing building stock by at least 38% by 2020. It also aimed to renovate 400,000 housing units annually starting from 2013, with a target of 80,000 social housing units renovated before 2020. To achieve these goals, the **Loi Grenelle II**, introduced in 2010, implemented measures to support the objectives of Grenelle I by essentially “greening” the Urban Planning Code (*Code de l'Urbanisme-CU*) and the Building and Housing Code (*Code de la Construction et de l'Habitation - CCH*). Key elements of the Grenelle II, related to the renovation of existing buildings, include: reinforcing the obligation for the energy performance diagnosis (DPE); reforming tax credits for energy transition; expanding the CEE system for owners of large properties (such as real estate companies); and providing subsidies for energy-saving works for social housing providers (*bailleurs sociaux*).

In 2015, the **Loi Transition Énergétique** aimed to set key objectives and measures in line with the Paris Agreement on climate change. The law devoted special attention to the building sector and the urgent need to accelerate the energy retrofitting of homes and combat energy poverty. The main objectives included the renovation of 500,000 homes per year from 2017, of which at least half would be occupied by low-income households<fnref n="43" />. In addition, the law aimed to renovate all housing with a DPE rating of F and G (i.e., with a theoretical consumption greater than 330 kWh/m²/year) before 2025, and to achieve a building stock with BBC (Low-Energy Building) standards by 2050 (with energy consumption lower than 80 kWh/m²/year, depending on the climate zone). The **Plan de rénovation énergétique des bâtiments**<fnref n="44" />, presented in 2018 by the Ministry of transition écologique et solidaire and the Ministry of de la cohesion des territoires, aligns with the objectives of the Loi Transition Énergétique (Pellegrino, 2019). The plan proposed to translate national objectives into 13 actions organized around four key areas: making energy renovation of buildings a national priority, scaling up the renovation of housing and fighting energy poverty, accelerating the renovation and energy savings of tertiary buildings, and strengthening skills and innovation.

The **Loi Energie Climat**, presented to the Council of Ministers in 2019 by the Ministry of transition écologique et solidaire, aimed to enshrine the objective of carbon neutrality by 2050 into law by revising the goals of the *Loi Transition Énergétique* upwards. The ambition was to promote widespread, high-performance energy renovations, with the two factors – massification and high performance – being presented as inseparable by the law. In this context, *MaPrimeRénov' (MPR)* was conceived as a program to improve homes' energy

<footnote n="42">⁴² Respectively, the so-called Certificats d'Economie d'Énergie (CEE) and the Crédit d'impôt pour la transition énergétique (CITE), formally introduced with the 2005 finance law.</footnote>

<footnote n="43">⁴³ Of which 100,000 thermal sieves of social housing and 150,000 thermal sieves occupied by homeowners</footnote>

<footnote n="44">⁴⁴https://www.ecologie.gouv.fr/sites/default/files/documents/Plan%20de%20r%C3%A9novation%20%C3%A9nerg% C3%A9tique_0.pdf</footnote>
efficiency, aiming to accelerate the energy transition and reduce GHG emissions through a
revamping of the funding system.

The following year, the National **Plan de relance (2020)** allocated €30 billion to the first pillar, ecology and energy transition, of which more than €6 billion is earmarked for energy renovation. Specifically, the €6 billion was distributed to buildings distributed across four primary areas of intervention: energy renovation of private buildings, with an additional €2 billion allocated to the *MaPrimeRenov*' (see section 4.2.1) mechanism for 2021-2022; deep renovation of social housing with €500 million allocated for 2021-2022, of which €40 million is reserved for a project call aimed at strengthening industrial solutions for the mass renovation of the social housing stock (*MassiRéno*); thermal renovation of public buildings with €2 billion for 2021-2022; and energy renovation of small and medium enterprises. According to the government website monitoring the *Plan Relance*<fnref n="45" />, the targets of 40,000 social housing to be renovated by 2022 were achieved, and the targets for 700,000 valid applications by 2022 under the *MaPrimeRenov*' program were met. In continuity with the *Plan de Relance*, the *Fond National des Aides à la Pierre* (FNAP) established a budget of €200 millions for retrofitting more than 35,000 social housing in 2023.

**Loi Climat et Résilience** initially prohibited renting homes classified in energy classes G by 2025, F 2028, and homes classified in energy class E by 2034 even though these restrictions have been relaxed more recently. The law also included a rent freeze for energy-inefficient housing starting in 2022, along with the implementation of state support for the renovation process. As Apur (2022) reported, "*This new regulation represents a major challenge for the evolution of the rental supply in the City of Paris, as well as in many large cities with a predominantly old housing stock*". The INSEE observed that, in 2018, more than half (54%) of the principal residences in the city of Paris had an energy performance diagnosis (EPD) rated E, F, or G<fnref n="46" />. This percentage was higher than the one defined for the same year at the national level (41%).

A transversal issue that emerged at the international level during the oil crisis of the 1970s is the increasing prioritisation of **energy poverty** in the policy agenda. The issue remains complex, involving multiple factors, such as controlling energy prices in the medium term, reducing poverty among the most vulnerable, and accelerating building renovations (Guyet, 2024). The Energy Poverty Advisory Hub provides several indicators, including arrears on energy bills and the inability to keep homes adequately warm, highlighting the worsening situation in Europe due to the energy crisis and the resulting increase in energy prices.-Member states are implementing various actions, ranging from palliative measures, such as income support, to preventive measures, such as energy renovation programs targeting the most vulnerable populations (Guyet, 2024).

Since the 2000s, energy poverty has become increasingly evident in France, partly due to rising energy prices (Meillerand and Nicolas, 2022). In response to this issue, the state implemented measures to improve of housing thermal quality, provide income support to heating and regulate energy pricing. he chèque énergie, introduced in 2018 as a replacement for the tarifs sociaux de l'énergie, provides a voucher to low-income households to help them

<footnote n="45">⁴⁵ https://www.economie.gouv.fr/plan-de-relance/tableau-de-bord#</footnote>

<footnote n="46">⁴⁶ https://www.insee.fr/fr/statistiques/6458354#graphique-figure2</footnote>
pay their energy bills. In addition, France has launched several energy renovation programs targeting the most vulnerable families, such as those run by the National Agency for habitat (Agence Nationale de l'Habitat, ANAH)<fnref n="47" /> (see section 4.2.1). The eligibility criteria for ANAH renovation aid are set at the national level; however, implementation varies locally depending on available resources and actor networks (Guyet, 2024).

4.2 The implementation process

Various tools coexist to support housing retrofitting in France ranging from financial to regulatory and support tools. From the early 2000s, public action relied on incentive-based tools such as tax deductions, subsidies<fnref n="48" />, or subsidised loans (Fack and Giraudet, 2024). Over time, advisory and informational tools, such as national and local platforms, were introduced to facilitate retrofitting policy implementation. Since the 2020s, there has been a shift from a focus on tax deductions — which required upfront payments and offered reimbursements over time — towards a stronger emphasis on direct subsidies for private renters and homeowners, with particular attention given to the latter. In contrast, social housing tenants can access only some of these instruments (such as the energy obligation schemes), and public support for the renovation of the social housing stock remains limited. However, certain funding envelopes are made available by public bodies or other institutions (such as ANRU or Action Logement<fnref n="49" />), as well as by other actors, including local authorities. More recently, with increasingly ambitious European and national targets, more coercive measures have been discussed, such as restrictions on renting or selling energy-inefficient buildings (*passoires thermiques*).

4.2.1 Financial tools

Sereralkey financial tools support housing retrofitting in the French context (Figure FR4 and Table FR2). To date, the primary financial mechanism is MaPrimeRenov' (MPR), which can be combined with other tools introduced in the early 2000s, such as Eco-PTZ, or the Certificats d'Économies d'Énergie (CEE), and, where applicable, local subsidies. According to ONRE (2024) the number of homes receiving support by different schemes increased between 56% from 2016 to 2021. Giraudet et al. (2020) assess some of these measures' medium- and long-term impact, evaluating energy improvement trajectories relative to state-set targets in the residential sector.

<footnote n="47">⁴⁷ Created in 1971 with the aim of supporting the renovation of private housing, it gradually expanded its scope including energy renovation. Over time, it also redefined its targets, shifting from a focus on private landlord to owners occupiers. On the one hand, the agency supports households, both owners-occupiers and private landlords, in carrying out renovation works; on the other hand, it collaborates with local authorities in designing area-based renovation schemes.</footnote>

<footnote n="48">⁴⁸ mainly managed by l'ANAH</footnote>

<footnote n="49">⁴⁹ A French association, jointly managed by representatives of employers and employees, financing housing initiatives, especially for employees, mainly through the PEEC (Participation des Employeurs à l'Effort de Construction).</footnote>
<figure><img src="image_28.png" /></figure>

Figure FR4. diagram representing key financial tools for housing retrofitting in France, specifying their duration and evolution over time. A distinction is made between fiscal incentives (in blue), subsidized loans (in green), direct subsidies (in red) and obligation scheme (in grey)

The **TVA à taux réduit**, since 1999, involves improving, transforming, renovating, and maintaining residential buildings older than two years. This measure was introduced in France, following the European Directive 1999/85/EC<fnref n="50" />, initially for a three-year period. It was first extended in 2003, and then permanently implemented since 2005. Over time, the government expanded the scope of this measure to include energy efficiency works (such as solar panel installations, thermal insulation, etc.) from 2005 and materials (such as windows, boilers, etc.) from 2014-2015, benefiting from a VAT rate of 5,5%. Access to the reduced **TVA à taux réduit** is not conditioned on meeting a specific energy performance target.

To replace the **Crédit d'Impôt Développement Durable (CIDD)**, established in 2005, the **Crédit d'Impôt pour la Transition Énergétique (CITE)** was launched in 2015 as part of the **Loi Transition Énergétique**. This incentive promotes energy efficiency works in primary residences in exchange for reduced income taxes. The taxpayer was required to pay the full amount for the works upfront and then receive a refund in the form of a tax credit (typically spread over 5 years). In practice, this scheme proved less encouraging for the most vulnerable households and excluded certain types of work and materials (such as heat pumps). This is also one of the main reasons why the **CITE** was later replaced in 2020 by the **MaPrimeRénov'** program.

In 2009, the **Éco-PTZ (Éco-Prêt à Taux Zéro)** was introduced to finance energy retrofit investment investments for houses used or intended to be used as primary residences<fnref n="51" />. As reported by the annex to the draft finance bill for 2024⁵², the number of Eco-PTZs quadrupled from 2018 to 2022 due to simplifications and the strengthening of the program, but also due to the context of rising interest rates. It can be combined with other subsidies, such as the CEE and MaPrimeRenov' (MPR), provided by ANAH. In addition, for social housing only, the Éco-

<footnote n="50">⁵⁰ Directive 1999/85/EC of 22 October 1999 amending Directive 77/388/EEC regards the possibility of applying on an experiment basis a reduced VAT rate on labour-intensive services. The directive is available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A31999L0085</footnote>

<footnote n="51">⁵¹This measure provides an interest-free loan for different energy works (from individual items to complete renovations). The bank loan can be up to 30,000 euros for single-item renovations and 50,000 euros for global renovations, with a repayment period of up to 20 years.</footnote>

<footnote n="52">⁵²Available at: https://www2.assemblee-nationale.fr/static/16/pdf/Annexes_PLF/Effort_financier_%C3%89tat_r%C3%A9novation_r%C3%A9nerg%C3%A9tique_b%C3%A2timents.pdf</footnote>
**Prêt Logement Social (Éco-PLS)** is a measure stemming from the work of the Grenelle de l'Environnement, aimed at encouraging the energy renovation of the most energy-consuming buildings. The Éco-PLS distributed by the *Caisse des Dépôts et Consignations (CDC) through its Banque des Territoires (BdT).*

The national agency ANAH provides some state aid for energy renovation of private housing. In 2020, **MaPrimeRenov'(MPR)** replaced the former schemes (CITE, **Habiter Mieux Agilité, and Habiter Mieux Sérenité**). Unlike the CITE system, which consists of a tax credit, MPR offers households direct financial support ("invoice discount"). Initially, MPR was reserved exclusively for low-income families. Still, since 2022, it has been extended to all income groups (intermediate and higher incomes) as well as individual landlords (i.e. not corporate), although with varying subsidy thresholds based on income<fnref n="53" />. For collective housing, MaPrimeRenov' Copropriétés (previously Habiter Mieux Copropriétés) is now available to all unions of co-owners (syndicats de copropriétaires), increasingly questioned about energy renovation works (Brisepierre, 2020)<fnref n="54" />. In this context, low-income households often face multiple challenges, including complex administrative procedures and the need for upfront financing (Defay and Driant, 2023). According to Apur's (2022) report on the city of Paris, for owner-occupier households with a monthly income of less than €2,150, the average cost of external thermal insulation represents nearly a full year of income (11.8 months). As a result, this system benefits households with savings or access to credit to the detriment of economically vulnerable ones.

<table><thead><tr><th rowspan="3"></th><th rowspan="3"></th><th colspan="3">Beneficiaries</th><th colspan="3">Targeted tenure</th></tr><tr><th rowspan="2">owners' occupa-<br>nts</th><th colspan="2">owners' landlords</th><th rowspan="2">co-owners<br>(syndacats de copropriété)</th><th rowspan="2">OO</th><th rowspan="2">PR</th><th rowspan="2">SR</th></tr><tr><th>Individual s</th><th>Collectiv e entities</th></tr></thead><tbody><tr><td rowspan="2">Loans</td><td>Éco-PTZ</td><td>✓</td><td>✓</td><td></td><td>✓</td><td>✓</td><td>✓</td></tr><tr><td>Eco-PLS</td><td></td><td></td><td>✓</td><td></td><td></td><td>✓</td></tr><tr><td rowspan="3">Subsidies</td><td>MPR par geste</td><td>✓</td><td>✓</td><td></td><td></td><td>✓</td><td>✓</td></tr><tr><td>MPR d'ampleur</td><td>✓</td><td>✓</td><td></td><td></td><td>✓</td><td>✓</td></tr><tr><td>MPR copropriété s</td><td></td><td></td><td></td><td>✓</td><td>✓</td><td>✓</td></tr><tr><td>Fiscal incentives</td><td>TVA taux réduit</td><td>✓</td><td>✓</td><td>✓</td><td>✓</td><td>✓</td><td>✓</td></tr><tr><td>energy obligation schemes</td><td>CEE</td><td>✓</td><td>✓</td><td>✓</td><td>*</td><td>✓</td><td>✓</td></tr></tbody></table>

<footnote n="53">⁵³ The aid amount depends on the type of renovation and the household's income, with different criteria for Île-de-France and the rest of France#. The user receives a discount on the renovation invoice through a combination of MPR and CEE aids, with the remaining cost potentially covered by an Eco-PTZ or additional local aids if available. The company that carries out the energy renovation work applies a discount on the invoice based on the subsidy the household will be able to benefit from. After the work is completed, the subsidy is directly paid by the administration to the company.</footnote>

<footnote n="54">⁵⁴ This subsidy is conditional on achieving at least a 35% energy gain and applies to co-ownerships with at least 75% primary residences</footnote>
Table FR2. main financial tools for energy renovation in relation to corresponding beneficiaries and impacted tenures. This table is not exhaustive; it includes the main state aid and long-term support mechanisms currently in use in 2025.

National financial tools can be complemented with local ones. The study conducted by ONRE (2024) analyzes geographical disparities in provision of aid, finding that aid levels can vary greatly by department. About 60% of local authorities provide some kind of local aid, most of which can be combined with state aid (Vailles and Ousaci, 2024). However, certain departments provide more than others, and metropoles such as Lyon, Grenoble, Bordeaux, and Paris provide substantial local subsidies (sometimes exceeding €10,000 per household).

4.2.2 Regulatory tools

Le **Diagnostic de Performance Énergétique (DPE)**<fnref n="55" /> was introduced in 2006 to provide households with information about the energy and environmental performance of homes. Initially created as an informational tool to enable more informed decisions, the DPE has acquired a regulatory character over time. Some changes occurred in years that followed, particularly between the late 2010s and early 2020s. On the one hand, the DPE methodology was broadened to include not only energy consumption, but also the amount of GHG emissions. On the other hand, it became mandatory to include the DPE in real estate sales and rental listings. The DPE methodology has evolved over time, affecting the categorisation of the housing stock into most and least consuming categories and the implementation of related policies (see, for instance, below the rental ban the so-called *passoires thermiques*) (Fack and Giraudet, 2024).

The *Loi Climat et Resilience* (2021) initially included a gradual **ban on renting of homes classified in energy classes E, F and G** by 2034. The original provisions of the law stated that, starting in 2025, if a rented property fails to meet the minimum energy performance standards, tenants have the right to act against their landlords<fnref n="56" />. According to a 2022 INSEE study focused on the Île-de-France region, social housing on average has a higher proportion of energy-efficient homes (rated A to D), likely due to the newer construction of its housing stock. In contrast, 55% of privately rented main residences in the region are considered energy-intensive (Chaput et al., 2022). More recently, the rules on banning the rent of energy sieves have been re-discussed and, partially, lifted or relaxed<fnref n="57" />. At present, relaxations are being proposed specifically for co-owners' condominiums, as decision-making takes longer than in situations with a limited number of property owners.

<footnote n="55">⁵⁵ https://rt-re-batiment.developpement-durable.gouv.fr/presentation-generale-du-dpe-a783.html</footnote>

<footnote n="56">⁵⁶ Suppose a judge determines the property does not meet the required energy performance standards. In that case, they may order the landlord to make the necessary repairs, impose a rent reduction for the tenant, and even require the landlord to compensate the tenant.</footnote>

<footnote n="57">⁵⁷ In 2024, the government issued an order that, by changing the mode of calculus for small size apartments (under 40 sq. m.), lifted the rental ban on 140,000 units initially labeled as F. This was reported by the press as being the result of a lobbying by representatives of the real estate industry (cf. *Mediapart*, 14/02/25, https://www.mediapart.fr/journal/ecologie/140224/passoires-thermiques-la-calculette-du-ministre-au-service-des-proprietaires). In 2025, a draft bill was introduced in the Senate, containing provisions that would lift the ban in specific conditions (e.g. when works for energy upgrading are impossible to implement because of technical, architectural or heritage reasons, or disproportionate costs; or in case of recent negative vote by co-owners).</footnote>
4.2.3 Support and information tools

Several tools are available and promoted at the national and local levels to support local authorities and individuals in implementing housing retrofitting policies.

Among these, France Rénov' is the national platform coordinating and centralising energy renovation policies. In addition, the Agences Locales de l'Énergie et du Climat (ALEC), established by the Loi Transition Énergétique in 2015, focus on promoting the energy transition and combating climate change locally. These agencies operate as public services, offering information and awareness-raising activities and providing advice and support to public bodies in their energy transition efforts.

Furthermore, local authorities introduce complementary financial support and tools to those implemented nationally. For instance, the City of Paris launched the Éco-Rénovons Paris program to encourage housing retrofitting in 2016, primarily for co-owners (copropriété). In addition, the City of Paris provides additional grants for renovation works<fnref n="58" />.

4.3 Size and role of the market

The energy market liberalisation phased out public monopolies and tariffs in the last 30 years, introducing supplier competition. However, rising energy prices forced the government to introduce a 'tariff shield' and incentivise energy-saving measures for low-income households. As the complexity of public market regulation increases, innovation and challenges become intertwined, making it difficult to evaluate the resulting policy mix.

4.3.1 Energy price setting

For a long time, the French state maintained a monopoly on electricity and natural gas through two national companies (Électricité de France - EDF and Gaz de France GDF), which distributed energy at government-regulated prices. This situation changed with the liberalization process of the energy market initiated at the European level between the late 1990s and early 2000s and the subsequent opening of national markets to competition (Poupeau, 2013). From 2019, the Tarifs Réglementés de Vente (TRV) for gas were gradually removed, while regulated tariffs for electricity partly remain in effect. However, they were expected to be adjusted or phased out gradually. Indeed, following the market opening, users can choose from different suppliers offering fixed tariffs (where the energy price remains unchanged for the duration of the contract), indexed tariffs (where the price follows market trends), or tariffs exclusively linked to renewable sources, depending on the case.

From 2021 onwards, partly in response to inflation dynamics and rising energy prices, , and likely also due to concerns about massive social unrest similar to the Yellow Vests movement sparked by proposed additional taxes on oil, the French state introduced several support measures for households to help with energy bills (electricity and gas), including the bouclier

<footnote n="58">⁵⁸ In 2022, for instance, the combined support from ANAH and the City of Paris helped 3,314 housing units. Of these, 2,302 benefited from the Habiter Mieux/MaPrimeRénov' program, thanks to energy savings of over 35% (Apur, 2022). The total amount of subsidized works reached €61.8 millions, with €28 millions in grants from ANAH and €8.2 millions from the City of Paris, bringing the total financial support for renovation projects to €36.3 millions (approximately 58% of the overall amount).</footnote>
tarifaire (tariff shield). The study by INSEE (2022)<fnref n="59" /> assesses the impact of this tool, stating that "gas TRVs would have gradually increased by 66.5% including taxes between October 2021 and February 2022 in the absence of the tariff shield. As for electricity TRVs, they would have increased by 35.4% including taxes on February 1st, 2022. Furthermore, since market offers are partly indexed to regulated tariffs, the prices of these offers would likely have been more dynamic without the 'shield'".

### 4.3.2 Energy obligation schemes

One of the most common tools in energy obligation schemes in France is the *Certificats d'Économies d'Énergie* (CEE). The program drives private sector investment in energy-saving measures and acts as a key incentive for housing retrofitting. The *CEE*, introduced in 2006 by the *Loi POPE*<fnref n="60" />, set obligations for energy companies to promote and finance projects that reduce energy consumption. *CEE*, which can be sold or traded on the market between energy suppliers, certifies the amount of energy saved through the implemented projects. Since 2015, a portion of these energy savings obligations must be achieved for low-income and very low-income households facing energy poverty. The share of CEE allocated to energy poverty compared to the traditional *CEE* has evolved over time: starting in 2022, in line with the goals of the *Loi Climat et Résilience*, the targets to be met have increased by 25%, setting more ambitious levels for CEE aimed at those in energy distress (Figure FR5). This system can be combined with other subsidies, such as *MaPrimeRénov'* (see section 4.2.1).

<figure><img src="image_29.png" /><figcaption>Figure FR5. evolution of CEE obligations objectives (in terms of TWhc) over time (source: CEE annual report, 2023⁶¹)</figcaption></figure>

### 4.3.3 Bank loans

Banks also finance housing retrofitting through credit instruments linked to financial markets (Gimat et al., 2022). One example is the Prêts verts (Green Loans) offered by Banque Postale

<footnote n="59">⁵⁹ https://www.insee.fr/fr/statistiques/6215309?sommaire=6215395</footnote>

<footnote n="60">⁶⁰ https://www.legifrance.gouv.fr/loda/id/JORFTEXT000000813253/</footnote>

<footnote n="61">⁶¹ https://www.ecologie.gouv.fr/sites/default/files/documents/Bilan%20annuel%20CEE%20P5%20-%202023-%20VPubli.pdf</footnote>
to social housing providers for the renovation of social housing stock. These loans are financed through green bonds issued by the Caisse Française de Financement Local (CAFFIL). For instance, since 2021, Néolia (an Entreprise Sociale pour l'Habitat – ESH, see WP4 4.1) has benefited from these loans to renovate its housing stock, mainly to address technical constraints that limited access to éco-prêts issued by the CDC and to take advantage of the competitive interest rates offered by Banque Postale<fnref n="62" />.

Additionally, in 2024, the Minister of Housing commissioned a report from two senators on the creation of a public bank to finance energy retrofit. Its purpose would be to help households to finance the outstanding cost of investment that is left once subsidies and other public support schemes are deducted<fnref n="63" />.

4.4 The multi-level governance process

Local authorities managed energy networks before nationalisation in the early 20th century. Following the energy crises of the 1970s, they sought to improve the energy efficiency of their building assets and later address energy poverty issues. Since the 1990s, new regulatory frameworks have assigned regions, departments, and inter-municipal authorities additional responsibilities related to housing energy renovation, energy poverty and, more generally, climate action plans. Historically, local authorities have been the organizing bodies for public energy distribution networks. As noted by Poupeau et Bouteaud (2021), the involvement of local authorities in energy-related issues is part of a long-standing process. Their competence was somewhat limited with the creation of large national monopolies (Électricité de France - EDF, and Gaz de France GDF) around the mid-1900s. With the energy crisis of the 1970s and 1980s, new opportunities emerged for local authorities, who began acting in parallel with public policies defined at the national level by state organizations (such as the ANAH or ADEME<fnref n="64" />). At that time, municipalities initially focused on improving the energy performance of their own asset (e.g., sports and cultural facilities), and later extended their efforts to social and private housing through two key programs: Opérations Programmées d'Amélioration Thermique des Bâtiments (OPATB) and Opérations Programmées de l'Habitat (OPAH) (Debizet, 2011). These actions primarily addressed disadvantaged situations, tackling issues of energy poverty. In the 1980s, during the economic crisis, the state required EDF and GDF to establish a financial aid system. Another example is the Fonds Solidarité Logements (FSL), where municipalities are crucial in implementing various systems for managing arrears.

The 1990s and early 2000s marked the **growing involvement of local authorities (regions, départements and intermunicipalities) in the energy transition**, facilitated by a new regulatory framework that defined the perimeters for energy-climate planning. However,

<footnote n="62">⁶² https://www.labanquepostale.fr/bailleurs-sociaux/actualite/rehabilitation-logement-social-pret-vert.html</footnote>

<footnote n="63">⁶³ The creation of such an ad hoc institution was already suggested in the framework of the housing task force (Conseil national de la refondation) formed in 2023, and the special commission at the National Assembly (Mission d'information commune sur la rénovation énergétique des bâtiments).</footnote>

<footnote n="64">⁶⁴ It supports national and local ecological transition policies and is overseen by the Ministries of environment, energy, and research.</footnote>
despite the growing involvement of local authorities in policy implementation and horizontal coordination among local institutions and organisations, the national level continues to play a primary role by defining key objectives, elaborating regulation framework, and setting the corresponding implementation tools (see Table FR3).

<table><thead><tr><td></td><td>Roles and responsibilities</td><td>Actors</td></tr></thead><tbody><tr><td>National level</td><td>Define the roadmap for decarbonisation of the housing sector (SNBC)<br/>Set the financial tools (MPR, CEE, PTZ., etc) and support tools (e.g France Rénov') to implement energy retrofitting policies<br/>Coordinate the public service for housing retrofitting (France Rénov)</td><td>Ministries (DGALN)<br/>ADEME<br/>ANAH</td></tr><tr><td>Regional level</td><td>Since the <i>Loi Transition Énergétique</i> (2015) the regions have been assigned the responsibilities of energy performance of buidings and housing and renewable energy production<br/>The regions are responsible for developing the Schéma Régional d'Aménagement, de Développement Durable et d'Égalité des Territoires (SRADDET), introduced by the Loi NOTRe, which aims to consolidate existing schemes, including the <i>Schémas Régionaux Climat Air Énergie</i> (SRCAE)<sup>65</sup>.<br/>The regions are also responsible for creating a <i>Programme Régional de l'Efficacité Énergétique</i> (PREE) to formalize a strategy for energy renovation.</td><td>Régions</td></tr><tr><td>Departemental eleve</td><td>Departments take the lead on issues related to energy poverty.<br/>Coordinating with intermunicipalities as well as local actors and organizations that operate directly on the ground.</td><td>Departements</td></tr><tr><td>Intermunicipal level</td><td>At the level of intermunicipalities, the Grenelle II Law (2010) allowed for the "greening" of the <i>Schémas de Cohérence Territoriale</i> (SCoT)<sup>66</sup> by integrating climate-related issues into these documents<sup>67</sup>.<br/>The <i>Loi Transition Énergétique</i> (2015) introduced the <i>Plan Climat Énergie Air Territorial</i> (PCEAT), which sets an action program to improve energy efficiency and reduce climate-changing emissions within the territory.</td><td>EPCI</td></tr></tbody></table>

<footnote n="65">⁶⁵ Introduced by the Grenelle II Law, the SRCAE has provided regions with a global vision to mitigate the effects of climate change and adapt to it.</footnote>

<footnote n="66">⁶⁶ urban planning document that, at the scale of a territory, project, or living area (inter-municipal perimeter or beyond), defines the spatial organization and the main development directions of a territory.</footnote>

<footnote n="67">⁶⁷ It also enables the definition of additional rules, such as determining areas where urbanization is conditional on meeting strengthened environmental and energy performance criteria.</footnote>
<table><caption>Table FR3. roles, responsibilities and actors in housing retrofitting organized by governance level</caption><tr><td></td><td>Finally, the Plan Local d'Urbanisme Intercommunal (PLUi) operationalizes the guidelines set out in the SCoT, which must be compatible.</td><td></td></tr><tr><td>Municipal level</td><td>Supporting households through information tools, counselling or technical assistance<br/>Coordinating renovation programs at the local level with engagement and awareness rising activities</td><td>Communes</td></tr></table>

## 4.5 Achievements, assessments, and challenges

Despite national ambitions, the pace and performance of energy renovations remain insufficient to meet goals set by the National Low-Carbon Strategy. This target is 370,000 "deep" retrofits per year, increasing to 700,000 per year after 2030. This is ambitious given the 2022 pace of 66,000 deep retrofits (Fack & Giraudet, 2024). Even the main national scheme, MaPrimeRenov', has highlighted several critical issues, such as the focus on replacing heating systems rather than comprehensive renovations, which are more costly and can reduce usable space. Additionally, the long payback period for these renovations, often exceeding the lifespan of the equipment, poses a significant challenge. The cost of renovation risks disproportionately affecting lower-income owners, who may see their property values decline.

Overall, the pace and performance of renovations remain below the national targets set by the horizon of 2050 (Reseau Action Climat, 2021). In fact, energy renovations are rarely carried out comprehensively and are often done in small steps that have minimal impact on the building's overall performance. On average, considering energy labels, in 60% of cases, only one energy class is improved after the work, and two classes in 40% of cases (Valranges, 2018).

As Defay and Driant (2023) highlighted, MaPrimeRenov' raised several critical issues. Firstly, the works implemented so far mainly relate to replacing heating systems rather than comprehensive renovation, which primarily targets the overall insulation of buildings significantly more expensive than those involving only heating<fnref n="68" />. In addition, comprehensive renovations can lead to a loss of usable space, which means sacrificing valuable square meters for owners, affecting both the quality of living and the resale value. Another significant issue is the theoretical payback period of these renovations, often longer than the expected lifespan of the equipment and materials used.

These issues overlap with concerns related to the recent *Loi Climat et Résilience* and the progressive ban on renting out energy-inefficient homes. Defay and Driant (2023) argue that the outflux of these now-deemed energy-inefficient homes from the market could lead to a shortage of rental supply in major cities. In this context, the high cost of effective renovations raises the risk of a growing divide between renovated properties and those that will remain unrenovated due to the owners' lack of financial resources or the absence of a clear return on

<footnote n="68">⁶⁸ According to data from the first half of 2022 published by the ANAH, only 6% of applications are for comprehensive renovations, compared to nearly 70% for individual heating systems.</footnote>
investment. Lower-income owners are the ones most likely to bear the brunt of these
challenges, gradually seeing the value of their properties erode, often after having invested
much of their life savings into them as a form of retirement security. As one interviewee pointed
out, those most affected by this loss are often people who already face long and expensive
commutes, bearing a double burden of transport costs and the shrinking value of their
properties. Moreover, as underlined by a recent study about the risk of renovation in France
(Barry and Sabrinni-Chatelard, 2024), renovation works may pose a threat to tenants, who
may face the landlord invoke energy renovation as a reason to simply evict them from their
homes.

<table><caption>Table FR4. Potential impacts of housing retrofitting policies on housing inequalities and urban and territorial dynamics.</caption>
   <thead>
    <tr>
     <td>
     </td>
     <td>
      Potential Impacts
     </td>
    </tr>
   </thead>
   <tbody>
    <tr>
     <td>
      Territorial disparities in accessing resources
     </td>
     <td>
      National subsidies might be complemented with local subsidies, but the availability vary greatly across territories, risking to exacerbating existing territorial inequalities
     </td>
    </tr>
    <tr>
     <td>
      Renovation costs and housing quality
     </td>
     <td>
      The high “out-of-pocket” renovation costs and long payback periods risk deepening the divide between renovated properties and those that will remain unrenovated due to the owners’ lack of resources
     </td>
    </tr>
    <tr>
     <td>
      Lower-income homeownership vulnerabilities
     </td>
     <td>
      Increased likelihood of property devaluation might imply higher risks for lower-income owners who invested life savings, especially when compounded by peripheral location and high transport costs.
     </td>
    </tr>
    <tr>
     <td>
      private rental sector
     </td>
     <td>
      Landlords may use renovation as a pretext for eviction, exposing tenants to the risk of renoviction and potentially reducing the supply of most affordable housing
     </td>
    </tr>
    <tr>
     <td>
      Social rental sector
     </td>
     <td>
      Limited financial resources may lead social housing providers to adopt strategies such as diversifying social housing production, partially selling stock, and prioritising renovation over new construction.
     </td>
    </tr>
   </tbody>
  </table>

5. Nature-Based Solutions

Nature-Based Solutions (NBSs) emerged in relation to a renewed interest in urban nature, driven by the growing ecological imperative and the recognition of the multiple benefits associated with natural elements in urban contexts (Bourdeau-Lepage, 2019). In France, NBSs have recently gained prominence in policy discussions, largely influenced by international debates (Drapier et al., 2024). Currently, NBSs are integrated into broader national policy frameworks for climate change adaptation, biodiversity protection, and water management. Moreover, policies and projects not explicitly labeled as NBSs may still involve or translate into nature-based initiatives (such as *politiques de végétalisation*). Despite strong national support, local implementation remains challenging.
5.1 The policy cycle: emergence of the issue and policy decisions

NBSs have become part of national environmental policies over the past decade (Guerrin et al., 2023). Before that, other policies integrated the issue of nature, albeit in a more transversal manner. The *Loi Grenelle II* highlighted the importance of the blue and green infrastructures, while the subsequent ALUR law placed particular emphasis on the issue of urban sprawl (see section 6.1). However, the institutionalization of NBSs in France within public policies is a more recent process. It has driven by key integration vectors (Drapier et al., 2024), including: the French Committee of the International Union for the Conservation of Nature (CF IUCN), the *Direction de l'Eau et de la Biodiversité* (DEB) of the Ministry of Ecological Transition (also through the *Agences de l'eau*), and the *Office Français de la Biodiversité* (OFB)<fnref n="69" />. In parallel, some institutional actors in the housing sector have begun integrating nature-based solutions (NBS) into their professional practices. The HLM organizations formally committed to this approach in 2022 by signing the Manifeste pour la Biodiversité dans le secteur HLM<fnref n="70" />.

<figure><img src="image_30.png" /></figure>

Figure FR6. timeline illustrating key policies and regulation in France and EU related to NBSs. Binding documents are marked with filled green dots.

Since the 2015 Paris Climate Conference (COP21) the **French Committee of IUCN** has been instrumental in introducing and promoting NBSs, particularly. They produced reports, organized working groups, and actively advocated for NBSs in various policy spheres. The IUCN and the European Commission rely on different definitions of NBSs, while sharing common ground (Hanson et al., 2020). The European Commission relates the concept to the three pillars of sustainable development and gives higher priority to innovation and economic

<footnote n="69">⁶⁹ Public institution, formed in 2020 from the integration of *Agence Française pour la Biodiversité (AFB)* and Office National de la Chasse et de Faune Sauvage (ONCFS)</footnote>

<footnote n="70">⁷⁰https://www.union-habitat.org/centre-de-ressources/patrimoine-maitrise-d-ouvrage/manifeste-de-l-ush-pour-la-biodiversite-dans-le</footnote>
dimensions; while IUCN focuses more on human well-being, the use of existing ecosystems
and the protection of biodiversity (ibidem).

In parallel with this, the Ministry of Ecological Transition, particularly through its water and
biodiversity directorate (Direction de l'Eau et de la Biodiversité - DEB)<fnref n="71" />, has explicitly
incorporated the European notion of NBSs into national strategies and plans. This includes the
**Stratégie Nationale pour la Biodiversité 2030** (SNB)<fnref n="72" />, published in 2021, which aims to
integrate biodiversity objectives and NBS into key sectoral policies. Among the flagship actions
of SNB 2030, the *Plan Nature en Ville 2024-2030* aims to combat biodiversity collapse in cities
and to mitigate and adapt cities to climate change. The plan defines a roadmap by identifying
key axes: improving knowledge, preserving and restoring nature in territorial strategies, and
promoting nature in urban planning projects. A fourth cross-cutting axis of the plan involves
bringing together stakeholders to foster a shared culture.

From 2020 the OFB<fnref n="73" /> pilots the **LIFE Accroitre la Résilience des Territoires au changement climatique par l'Incision aux Solutions d'adaptation fondées sur la Nature (ARTISAN) program**, that aims to promote NBSs as a key strategy for climate adaptation across the country. It is funded by the European commission through a call for projects, to which the OFB responded at the request of the Ecological Transition ministry. The project's approach includes a demonstrator program featuring ten pilot projects across mainland France and its overseas territories (Annex 3). The projects are primarily funded by EU funds, with a small share of local co-financing over a 5-year period. In addition, LIFE ARTISAN has established a network of regional coordinators who play a crucial role in facilitating local NBSs implementation (organizing events, and connecting project leaders with potential funders and support structures, etc.). Concrete examples of the project's work can be seen in pilot sites like Martinique, where mangroves are being used for coastal protection against sea-level rise, and in Les Mureaux, where urban heat islands are being addressed through the greening of school grounds. These examples illustrate how NBSs can provide multiple benefits, addressing climate challenges while also enhancing biodiversity and improving quality of life for local communities.

5.2 The implementation process

At the national level, there are no regulatory or financial tools explicitly referring to NBSs.
Incentive-based tools prevail, including the enhancement of existing projects, the
dissemination of information, guidelines and more. The lack of shared definitions, regulatory
instruments, and, above all, financial tools makes the implementation of NBSs particularly
challenging (Ershad Sarabi et al., 2019). However, local actors can benefit from resources

<footnote n="71">⁷¹ The DEB is a directorate that is part of the *Direction générale de l'aménagement, du logement et de la nature (DGALN)*</footnote>

<footnote n="72">⁷² The first *Stratégie Nationale pour la Biodiversité* was elaborate in 2004, with subsequent revisions in 2011 and 2021.</footnote>

<footnote n="73">⁷³ Public institution, formed in 2020 from the integration of Agence Française pour la Biodiversité (AFB) and Office National de la Chasse et de Faune Sauvage (ONCFS)</footnote>
linked to European initiatives specifically targeting NBSs or from local funds more broadly
dedicated to the greening of urban spaces.

5.2.1 Financial tools

There are no national tools specifically providing funding for NBS implementation. However, since 2023, the Ministry of Ecological Transition has launched the *Fonds d'accélération de la transition écologique dans les territoires*, also known as the *Fonds vert* (literally: Green Fund)<fnref n="74" />. This fund aims to finance projects submitted by local authorities and public or private partners in three areas: environmental performance, territorial adaptation to climate change, and improvement of living conditions. The fund's balance report at the end of 2023, states that "Endowed with 2 billion euros, it has enabled massive mobilization of stakeholders across the entire national territory. With 10,683 beneficiary projects in the first year alone, supported by more than 6,800 local authorities and territorial actors"<fnref n="75" />.

The Institute for Climate Economics (2016) analyses financing tools for urban greening projects in Europe and America. The report notes that overall "*The deteriorated state of public finances places a constraint on the amounts and distribution of local government budgets. This pushes local authorities to mobilize resources and/or expertise from the private sector and individuals*". This dynamic has clear implications at the national level as well, fostering public-private partnerships (see sections 5.3 and 5.4).

5.2.2 State-owned financial institution

A primary role in the promotion and financing of NBS is played by CDC Biodiversité<fnref n="76" />, a established in 2008 by the Caisse des Dépôts that manages the financing of mandatory ecological compensation within the ERC (*Eviter, Réduire, Compenser*<fnref n="77" />) (Guerrin et al., 2023b). In addition, in 2016, CDC Biodiversité launched the Natura 2050 program, a national initiative that promotes, funds, and oversees the implementation of NBS. The program gathers voluntary contributions from both public and private actors (CDC's website lists the main contributors) in support of biodiversity. Finally, CDC works closely with the Office Français de la Biodiversité (OFB) and the French Committee of IUCN within the framework of the European LIFE ARTISAN project.

5.3 Size and role of the market

Among the incentive-based benchmarking tools, the proliferation of awards and green labels for cities has gained prominence since the 1990s, both at the national and European levels (Guerrin et al., 2023b). As Epstein (2013) highlights, their development has taken on a dual role over time: on the one hand, they contribute to differentiating territories in a competitive logic; on the other, they can foster forms of cooperation and the dissemination of good

<footnote n="74">⁷⁴ Led by the Direction générale de l'aménagement, du logement et de la nature (DGALN)</footnote>

<footnote n="75">⁷⁵ Available at the following link:
https://www.ecologie.gouv.fr/sites/default/files/documents/Bilan_Fonds_vert_2023_compresse.pdf</footnote>

<footnote n="76">⁷⁶ CDC Biodiversité is a subsidiary of the CDC group, a state-owned financial institution.</footnote>

<footnote n="77">77 https://www.ofb.gouv.fr/mettre-en-oeuvre-la-sequence-eviter-reduire-compenser</footnote>
practices. However, as Bourdeau-Lepage (2019) points out, the promotion of NBSs awards
and green labels for cities in urban environments might become a territorial marketing tool,
contributing to the attractiveness of a territory—often to the benefit of more affluent population
groups

5.4 The multi-level governance process

As reported in section 5.2, NBSs are mainly promoted in the form of non-binding recommendations. The financial resources allocated to NBSs at the national level remain limited. Therefore, the implementation of NBS policies is entrusted to local communities, leading to a heterogeneous landscape shaped by local political will (Guerrin et al., 2023b).

On the other hand, EU programs and national initiatives tend to foster public-private partnerships. In this regard, the ARTISAN LIFE project includes around 27 public-private partnerships. As noted in the OFB report (2024), external partnerships—bringing together private actors, public institutions, and research organizations, among others—are often more developed than inter-service collaborations (e.g., between public offices in different sectors such as education, public works, etc.). Similarly, the Nature 2050 program, promoted by CDC Biodiversité, encourages voluntary public and private funding (see section 5.2.3).

On the one hand, there is the emergence of "exemplary cases" where urban greening is a priority axis in the political agenda (Rochard, 2024). For instance, since the early 2000s, the City of Paris has developed several programs and initiatives strongly oriented towards urban greening. In this regard, initiatives such as the *Permis de végétaliser* and the platform *Végétalisons Paris* have become instruments for legitimizing the policies promoted by Anne Hidalgo between 2014 and 2020 (Deschamps, 2024). More recently, the Hidalgo 2021-2026 mandate has been characterized by tools aimed at increasing urban canopy, notably through the *Plan Arbre*<sup>78</sup>.

Additionally, a cross-cutting issue concerns definitional debates and the local appropriation of the NBS concept. Some initiatives and policies that could qualify as NBS are often categorized under other terms (green infrastructures, ecosystem services, nature restoration, etc.). Furthermore, even when the term NBS is adopted, there is an ongoing "work of definition, translation, or reinterpretation of the concept" depending on the period and the social groups engaging with it (Drapier et al., 2024). For instance, in the case of the ecological restoration and adaptation targeting the Salins de Camargue site, "*the qualification of these projects as nature-based solutions became a source of local tensions, and the term was eventually abandoned*" (Guerrin et al., 2023b).

5.5 Achievements, assessments, and challenges

While much of the existing work focuses on broad environmental policies, fewer studies specifically examine the intersection of NBSs policies, housing affordability and socio-spatial inequalities (Institute for Climate Economics, 2016). In addition, there is a prevalence of reports

<footnote n="78">78 https://cdn.paris.fr/paris/2021/12/13/daf6cce214190a66c7919b34989cf1ed.pdf</footnote>
and research on green spaces policies in a broader sense, including green and blue infrastructures, ecological services, compared to those specifically exploring NBSs. No studies or reports have explicitly analyzed the impacts of NBSs on housing rental and selling prices.

A number of studies addressed environmental justice issues, green spaces accessibility and the social sustainability of ecological transformations (Blanc et al., 2024). In this regard, Clerval (2011) emphasizes the role that urban transformation processes and green spaces can play in gentrification processes at the city scale, particularly in the context of Paris. Similarly, Newman (2015) talks about the contestation and negotiation behind the transformation of Jardins d'Éole in northern Paris as an example of a “post-industrial brownfield repurposed as a sustainable landscape.” The contribution shows how ecological policies and public space planning in Paris interact with cultural and social inequalities, revealing a disconnect between sustainability objectives and the lived realities of marginalized groups.

Fewer studies specifically explore Nature-Based Solutions and socio-spatial inequalities. Herivaux and Le Coent (2023) examine the acceptability of NBSs in relation to the urban-rural gradient in Basin-Versant du Lez, Montpellier. As a result, residents in urban areas with limited access to nature and higher exposure to summer heatwaves tend to be more supportive of NBSs. In contrast, residents in peri-urban areas, with better access to nature but greater dependence on cars, show less support for NBSs that might reduce space for vehicles. In this regard, Cardinal (2023), demonstrates how NBSs can actually exacerbate existing inequalities in terms of the distribution of environmental risks and benefits, based on a study conducted in the La Bouillie area (in the Loir-et-Cher department).

<table><caption>Table FR5. Potential impacts of NBSs policies on housing inequalities and urban and territorial dynamics.</caption><thead><tr><td></td><td>Potential Impacts</td></tr></thead><tbody><tr><td>green spaces and eco-gentrification</td><td>urban transformation processes and green spaces (eco-neighbourhoods) can play a role in driving gentrification processes in urban and metropolitan contexts</td></tr><tr><td>spatial disparities implementation</td><td>the implementation of NBS policies mainly entrusted to local communities, leading to a heterogeneous landscape shaped by local political will</td></tr><tr><td>acceptability and policy fragmentation</td><td>differing acceptability of NBS along the urban-rural gradient may generate tensions between territories and hinder coordinated supra-local strategies</td></tr></tbody></table>
6. Densification

Urban density and densification issues have long been subjects of debate over time (Fonticelli, 2018; Touati, 2010). From the late 1990s and early 2000s, the topic gained renewed attention also in relation to energy and environmental sustainability of urban transformations (e.g reducing energy consumption, limiting car use, etc.). European-level impulses regarding densification mainly focus on measures aimed at reducing land consumption, partly due to the fact that the EU has competencies primarily in environmental matters (see Green Deal note). A pivotal moment came with the EU policy recommendation in 2011, which set the goal to halt land consumption by 2050. This same objective was later reaffirmed by the EU Soil Strategy in 2030. France is one of the few European countries that has integrated this objective into national law, thus setting stringent goals regarding the reduction of soil artificialization at the national level (under the Loi Climat et Résilience of 2021).

6.1 The policy cycle: emergence of the issue and policy decisions

In France, a number of policies were developed promoting densification processes in relation to environmental and climate change issues (Figure FR7)<fnref n="79" />. The 2000s, marked a crucial moment in time, with urban renewal becoming an 'official doctrine' (Charmes, 2010). These policies gained momentum throughout the 2010s, focusing on the densification of urban areas, and the reuse of industrial sites or vacant buildings near public transport. By 2021, policy priorities evolved in response to European policies and growing 'political pressure' on ecological issues (Charmes, 2021), emphasizing the fight against soil artificialisation and the protection of natural and agricultural spaces (where densification represents one possible area of intervention)<fnref n="80" />. At present, the term "densification" is subjected to criticism, as it tends to be associated by residents with an increase in concrete construction, according to experts (Cremaschi et al. 2025⁸¹). Instead, mainstream policy discourse tends to shift toward the principle of land sobriety (sobriété foncière) giving priority to the reuse of vacant housing and the redevelopment of brownfields.

<footnote n="79">79 Fonticelli (2019) highlights that policies that are not necessarily framed as densification may still imply and translate into densification actions.</footnote>

<footnote n="80">⁸⁰ See also Fondation Abbé Pierre and Fondation pour la Nature et l'Homme, 2024 for a timeline of policy initiatives aimed at reducing land artificialisation</footnote>

<footnote n="81">⁸¹ It is an unpublished document reporting on the first Policy Lab held in March 2025 at SciencesPo, Paris. It offers insights into current policy debates on the social consequences and trade-offs of green policies, as perceived by key stakeholders in France.</footnote>
<figure><img src="image_31.png" /><figcaption>Figure FR7. Timeline illustrating key policies and regulation in France and EU affecting densification. Binding documents are marked with filled blue dots</figcaption></figure>

The **Loi Solidarité et Renouvellement Urbain (SRU)** of 2000 was the first national law to promote densification (Fonticelli, 2018). The law stems from the recognition that certain urban areas with high urban stakes were rapidly deteriorating, that urban sprawl had negative consequences and that the sustainability of urban development needed to increase. Overall "*the provisions clearly mark a shift: they pave the way for a densification policy without imposing it*" (Lebreton et al. 2015, p. 47). The SRU law addressed the issues within the framework of general principles for urban planning documents and removing some barriers to densification<fnref n="82" />.

This policy was then reinforced with the Grenelle I and Grenelle II laws during Sarkozy's presidency (2007-2012). **Grenelle I (2009)** set the goal of combating the artificialisation of agricultural and natural land in favor of nature protection (considering densification as a tool). The main aim was "*to fight against urban sprawl and energy wastage, as well as to enable the revitalization of city centers*". It provided local authorities with the tools to: 1) link new development projects (residential or commercial) to the creation or improvement of transport infrastructure and 2) set minimum density requirements and higher energy performance standards than existing regulations (Article 7 II b). After that, **Grenelle II (2010)** defined densification as both an objective and an obligation also through some reforms of planning tools (mainly the *Plan Local d'Urbanisme* - PLU and the *Schéma de Coherence Territoriale - SCOT*) (Table FR4). However, the tools introduced by the reform remain optional, as it depends on "*the willingness of the EPCI in charge of the SCOT to strengthen densification*" (Fonticelli, 2019).

<footnote n="82">⁸² Such as the Plafond Légal de Densité – PLD (the legal density cup), which allowed higher density in urban areas; and the contribution for exceeding the Coefficient d'Occupation des Sols – COS (the floor area ratio), which lightened the financial burdens and facilitated densification</footnote>
After the Loi Grenelle II, the **Duflot ordinance (2013)** introduced measures aimed at stimulating housing construction, notably through the vertical extension of buildings and the harmonization of building heights<fnref n="83" />. The ordinance also established exceptions to PLU to encourage the densification of "dents creuses" (urbain voids and interstitial spaces).

In 2014 the **Loi pour l'Accès au Logement et un Urbanisme rénové (ALUR)** represented, in continuity with the SRU and the Grenelle laws, a further step to accelerate densification (Lebreton et al., 2015, Charmes, 2011). The law ALUR operated by integrating reforms of the PLU and the SCoT, as well as of the regulation of plot subdivisions (Jeannin and Carcian, 2015). At the municipal level, the law set the removal of two articles that previously allowed for density control<fnref n="84" />. In fact, it encouraged the administrations responsible for land-use planning through PLU to better combine the other tools available to them (setbacks from property lines, height, placement relative to roads, etc.) to define urban forms adapted to their territory (Tahier and Conreaux-Mantziaras in Touati and Crozy, 2015). At the intermunicipal level, the law required the SCoT to identify the areas in which PLUs should analyze the potential for densification and transformation, taking into account the quality of landscapes and architectural heritage.

<table><thead><tr><th></th><th>SCoT (intermunicipal level)</th><th>PLU (municipal level)</th></tr></thead><tbody><tr><td>Grenelle II (2010)</td><td>- defining objectives for reducing land consumption;<br/>- conducting studies on the potential for densification in already urbanized areas before new development projects;<br/>- the possibility to include additional regulation for 1) opening new areas for urbanization conditioned by proximity to transport or 2) allowing urbanisation only if the land in urbanized areas equipped with networks has already been used.</td><td>- introducing a diagnosis of the consumption of natural, agricultural, and forestry land;<br/>- defining objectives for reducing land consumption<br/>- the possibility to impose "a minimum density of construction in areas served by public transport or collective facilities"</td></tr></tbody></table>

<footnote n="83">⁸³ The competent authority, whether the mayor or the president of the EPCI, can grant exceptions to the PLU to facilitate residential densification projects in four specific ways: exceeding the height limits set by the PLU, allowing vertical extensions, converting existing buildings into residential units, and adjusting parking requirements based on project needs (for developments located within 500 meters of public transport with good accessibility).</footnote>

<footnote n="84">⁸⁴ Specifically, the setting of minimum plot sizes for construction and the Coefficient d'Occupation des Sols - COS (the floor area ratio). This "mathematically strengthens the possibilities for densification" (Charmes, 2011), although other regulations in urban planning codes have been used to limit densification (Fonticelli, 2019).</footnote>
<table><caption>Table FR6. Overview of the main elements introduced by Loi Grenelle II and the Loi ALUR regarding planning documents and regulations (the PLU at the municipal level and the SCOT at the intermunicipal level).</caption><tr><td rowspan="2">ALUR (2014)</td><td>- dentifying the areas where the PLUs should analize the potential for densification and transformation, taking into account the quality of landscapes and architectural heritage.</td><td>- integrating an analysis of the potential for densification and transformation, taking into account the quality of landscapes and architectural heritage</td></tr><tr><td>- the SCOT has the authority to set minimum density thresholds that are enforceable against the PLUs, or to designate areas where local urban planning regulations must impose a minimum construction density.</td><td>- introducing a diagnosis of the consumption of natural, agricultural, and forestry during the 10 years before the approval of the plan;<br/>- defining quantified objectives for reducing land consumption</td></tr></table>

Finally, the **Loi Climat et Résilience** (2021), with its implementation further supported by the subsequent law of 2023, sets ambitious targets for land artificialization: a 50% reduction by 2030, followed by the goal of no net artificialisation ("Zéro Artificialisation Nette", ZAN) within 50 years. In this context, densification is one of the key strategies, among others, to achieve these objectives (Pele and Chategnier-Mizzi, 2024). Operators should prioritize redeveloping urban and already artificialized land (vacant housing, brownfields, urban voids, interstitial spaces, etc.) over consuming agricultural, natural, and forest areas. However, some aspects of the law do not ensure an equitable distribution of efforts to reduce artificialization across territories. As highlighted by Doré (2023), while distinctions can be made in interregional planning documents (SCOT and PLU), the goal is defined uniformly at the regional level, which may not address regional disparities. Furthermore, the lack of a precise definition leaves room for varying interpretations of the policies aimed at reducing artificialization, allowing different stakeholders to adapt these policies to suit their own priorities (Charmes, 2021). Financial concerns also arise, particularly regarding supporting local authorities in achieving these objectives (Fédération National des Agences d'Urbanisme - FNAU, 2023). This law is subject to intense political controversy, mainly between the central government and local authorities, regarding its implementation and implications for urban development. As a consequence, the law undergone delays and adjustments in its implementation and goals. In March 2025, also in response to pressure from small municipalities association (Association des Petites Villes de France APVF), the Senate approved a law aimed at easing local constraints, raising concern about the weakening of land preservation national goals<fnref n="85" />.

## 6.2 The implementation process

### 6.2.1 Planning documents and regulation

The national regulatory framework, developed over the years, encourages densification while protecting natural areas. More recently, it has set an ambitious goal of achieving zero land artificialization on a national scale. The national regulatory framework shapes the national urban planning code, which is implemented through territorial governance tools operating at

<footnote n="85">⁸⁵ https://www.ecologie.gouv.fr/presse/proposition-loi-trace-maintenir-assouplir</footnote>
various local scales. National regulations on densification primarily affect intermunicipal and municipal planning tools. However, the Île-de-France region stands out as an exception, with national policies granting the regional authority a central role in steering densification efforts (Touati, 2015).

At the intermunicipal level, the SCoT (Schéma de Cohérence Territoriale, as defined by Grenelle II and the ALUR law) establishes objectives to limit land consumption by setting minimum density requirements and densification goals. Over the years, the central government aimed to strengthen the integrative role of SCoTs by expanding their scope to address various cross-cutting issues, such as promoting compact cities (Lévêque, 2015, in Touati and Crozy, 2015). More specifically, SCoTs identify areas where PLUs should analyze the potential for densification and transformation, considering the quality of landscapes and architectural heritage. Moreover, the SCoTs define zones where urban development is conditioned on their connection to public transportation and set minimum density thresholds to encourage the urbanization of vacant spaces (dents creuses) and promote densification in new developments. Fonticelli (2019) highlights some limitations that challenge the effectiveness of SCoTs in controlling land consumption. First of all, the elaboration of SCoTs is optional and depends on the willingness of intermunicipal entities (EPCIs). In addition, SCoTs define density thresholds only for undeveloped areas (new developments) and not for already built areas.

Exceptionally for Île-de-France, the 2014 Schéma Directeur de la Région Île-de-France (SDRIF) sought to control land use by establishing quantified objectives at the regional level to reduce the consumption of natural, agricultural, and forested areas. More recently, the SDRIF-e, adopted by the regional council in September 2024, aims to manage an ambitious trajectory of "urban development limitation." It prioritizes residential development within existing urban areas, based on density thresholds, and designates preferred urbanization zones according to specific contextual conditions (Annex 4).

At the municipal level, zoning plans (PLU) offer less leeway than intermunicipal planning documents when it comes to regulating the densification of areas. Where SCoTs exist, the prescriptions they define are binding for local PLU documents. Nonetheless, PLUs have certain tools to regulate densification (e.g., minimum building heights) and retain the authority to assess the capacity for densification and transformation of specific areas. They are also responsible for setting quantified objectives to reduce land consumption at the local level.

6.2.2 Financial tools

Over time, several financial tools have been developed to encourage densification and limit urban sprawl (Fondation Abbé Pierre and Fondation pour la Nature et l'Homme, 2024). These are mostly fiscal, such as:

* since 1999, the *taxe annuelle sur les Logements Vacants* (TLV) has been in place. As of 2022, this tax is allocated to the general state budget, whereas previously, it was directed to ANAH. Municipalities or intermunicipalities can also impose the *Taxe d'Habitation sur les Logements Vacants* (THLV) in areas where the TLV does not apply (typically in so-called zones non tendues)
* the versement pour sous-densité (VSD), created in 2010, is a tax on new constructions that fail to meet a minimum building density threshold set by the municipality. However, the tax was abolished in 2021, as it was rarely used by municipalities

* since 2012, the taxe d'aménagement allows municipalities to set different tax rates depending on the characteristics of the construction or renovation project. It can be adjusted to encourage higher density developments;

* since 2015, municipalities where the TLV is in effect can apply a surcharge on the taxe sur les propriétés foncières non bâties (tax on undeveloped land).

More recently, France has implemented various financial instruments to promote the reuse of *friches industrielles* (brownfield sites). For instance, the Plan de Relance allocated €750 million over 2021-2022 to grants for projects involving the redevelopment of brownfields and, more broadly, of already artificialized land<fnref n="86" />.

### 6.2.3 Monitoring tools

At the European level, ongoing debates highlight the lack of a shared definition of *land take* (Decoville and Feltgen, 2023), leaving member states with significant leeway to interpret and adapt concepts such as artificialization, soil sealing, and land consumption (Fédération National des Agences d'Urbanisme - FNAU, 2023). Similarly, at the national level, the definition of "artificialization" remains highly debated —particularly following the adoption of *Loi ZAN*— with no widely agreed-upon meaning (Charmes, 2021). The definitional challenges are closely linked to the elaboration of quantitative and qualitative tools for measurement and monitoring. Moreover, depending on the territorial scale at which density is measured or monitored (regional or more local), the narratives and conclusions may differ (Darley in Touati and Crozy, 2015).

Since 2000, the CORINE Land Cover database (Coordination of Information on the Environment Land Cover) has provided publicly accessible data on land use across European member states. In France, the *Loi Climat et Résilience* establishes the obligation to create **land and housing observatories** (*observatoires de l'habitat et du foncier*) no later than three years after the adoption of a local housing program (*programme local d'habitat*) (Pele and Chategnier-Mizzi, 2024). These observatories are intended, among other objectives, to identify sectors where density falls below urban planning thresholds, vacant properties, and developable brownfields, as well as opportunities for building elevation and demolition-reconstruction. Moreover, the Ministry of Ecological Transition highlights the importance of making monitoring tools available to promote sobriété foncière (land-use sobriety). In this regard, the national platform *Data Foncier*, developed by Cerema, offers a number of tools for analyzing and observing land use at the national level, using datasets such as land files (*fichiers fonciers*), DV3F, RFP, and LOVAC (Table FR7).

Beyond the above-mentioned national tools, territories also develop their own systems for measuring and analyzing land use data—for example, the cartographic atlas *Mode d'Occupation des Sols* (MOS) for the Île-de-France region. However, challenges arise concerning the interoperability of these datasets across different territorial scales and levels of detail, as well as their effective use to leverage the value of this information (Thépot, 2023).

<footnote n="86">⁸⁶ https://www.economie.gouv.fr/plan-de-relance/mesures/fonds-recyclage-friches</footnote>
<table><caption>Table FR7. Summary of some of the data available on land use and consumption at the European and national levels.</caption><thead><tr><th></th><th>Database</th><th>Main information</th><th>Year of data update</th><th>Accessibility</th></tr></thead><tbody><tr><td>European level</td><td>Corinne Land Cover</td><td>Land use</td><td>2000 (first release) then every 6 years (2006, 2012, 2018, 2024)</td><td>Open access</td></tr><tr><td rowspan="3">National level</td><td>Portail de l'artificialisation des sol</td><td>Land consumption of natural, agricultural and forester areas (ENAF)</td><td>From 2011 until 2023</td><td>Primarily intended for local authorities (collectivités), state services, and their partners</td></tr><tr><td>Cartofriches</td><td>Redeveloped brownfields (friches reconverties), brownfields with projects (friches avec projet), and brownfields without projects (friches sans projets).</td><td>Created in 2021 (last update: 2024)</td><td>Open access</td></tr><tr><td>Zero Logement Vacant (based on multiple databases such as LOCAV)</td><td>Vacant housing and rental properties in the private sector according to their energy labels</td><td>2020, 2021, 2022, 2023, 2024</td><td>Primarily intended for local authorities (collectivités), state services, and their partners</td></tr></tbody></table>

## 6.3 Size and role of the market

Although market dynamics in densification are regulated by a national framework, they tend to vary according to the land and real estate situation in different areas and/or the type of (re)development. Different submarkets can be distinguished, such as:

* "Build in my backyard" (BIMBY) initiatives located in periurban areas: since the mid-2000s, the densification of periurban housing (pavillonaire) has been framed as one of the major components of EEPs. Indeed, it represents up to 75% of the urban fabric at the national scale, even more in some areas, with the internal division of existing houses representing up to 25% of the supply of new housing in 2001-2011 (Touati and Crozy 2015). With the funding support of the State, BIMBY initiatives have become a commercial entreprise in its own right, ending as a trademark owned by two architects-engineers (Miet et Le Foll 2013). This initiative has raised many some heavy
controversies within the planning and architectural field (Robin 2013; Biau, Fenker, et Macaire 2015).

* **Turnkey urban regeneration projects** in metropolitan areas, led by large-scale developers: France has traditionally been characterized by a strong public intervention over land development, based on the combination of i) significant public landowners less geared towards rent extraction, ii) para-public urban development corporations (EPA, SEM, SPL and SPL-A, EPF) acting as intermediaries between former public/private landowners and developers, using iii) legal tools to acquire land (e.g. eminent domain purchase, zone d'aménagement concertée aka ZAC), determine future land-use, and negotiate contributions (e.g. planning gains) from developers willing to acquire it for redevelopment in order to pay for public spaces and amenities (e.g. schools). However, over the past 20 years, this model has been undermined by a number of major shifts, including the development of rent-seeking behaviours by public landowners turning into real estate developers, such as the railways (Adisson, 2018; Piganiol, 2017); and urban redevelopment practices based on the direct purchase of large tract of lands by large-scale developers acting as 'ensembliers', i.e. taking care of housing development and public space (Citron, 2017; Guironnet, 2016). This has gone hand in hand with the introduction of new legal tools to allow local authorities to negotiate contracts (PUP) with private developers for the provision of public space (Thibault, 2017).

* **Transit-oriented developments (TOD)** in metropolitan areas, such as the Grand Paris Express: in the Paris city-region the massive public investment into the creation of 200 km of new rail infrastructure in the periphery and 68 new neighborhoods around the train station is likely to drive up land and real estate prices, therefore pushing out working classes (Clerval & Wojcik, 2024).

* **Office-to-housing conversion schemes:** this form of densification policy was initially put on the agenda by public authorities in the 1990s to fight against what was then called the “housing crisis,” and has been reframed over the past decade as a lever for green transition. However, the interest of developers and investors seems to have been limited so far. Between 2013 to 2023, this type of densification contributed to 2.5% of the supply of housing (Coulondre et al. 2024). In the Paris region, 32% of the operations were concentrated in the core (City of Paris), especially in outer districts (arrondissements) where the value gap between housing and office is positive, and is supported by a proactive engagement of social housing providers (Trouillard and Quatrain 2022). However, this represented only 3% of the official objective of 70,000 new units per year set by the Grand Paris law in 2010 (over the period 2013-2021). There have been many reports advancing different solutions to try to unlock this. Besides the usual zoning instruments, this policy is mostly based on symbolic (e.g. a prize was created in 2019, but short-lived) and tax instruments.

* **Air rights (surélévation):** the construction of additional floors on top of existing buildings has been pushed as a tool of densification, both supported by arguments for the compact city and housing affordability that would result from an increase in the supply (Bouchet-Blancou 2020). In that regard, the ALUR law (2014) was the main milestone as it suppressed the floor area ratio (coefficient d'occupation des sols, COS) that used to regulate the construction capacity of a given plot, and sought to facilitate
projects with co-owners as direct contractors (maîtrise d'ouvrage directe) rather than
selling air rights to developers. However, this did not fundamentally alter the structural
bias of the French legal system in favor of outsourcing to developers (Ibid.). This form
of densification has been identified by the City of Paris as a key intervention in its new
zoning plan (PLU bioclimatique), as well as by social housing providers in Lille and
Rennes.

6.4 The multi-level governance process

Historically, the state has been responsible for the development and implementation of spatial planning policies (Touati, 2015). Following the decentralization policies initiated in the 1980s, urban planning competences—including densification policies—were transferred to the local level. As noted in Sections 6.1 and 6.2, since the 2000s, the national regulatory framework has promoted densification and influenced the urban planning code, which is implemented through territorial governance instruments at various local levels (mainly intermunicipal and municipal). While densification regulations primarily affect local planning tools, their implementation remains optional and depends on the willingness of local authorities (Touati, 2015). In this context, Île-de-France represents an exception, as it establishes quantified objectives at the regional level to limit the consumption of natural, agricultural, and forested areas.

Moreover, various actors—including private stakeholders, para-public entities, and third-sector
organizations, among others—support densification policies (Fonticelli, 2016). As highlighted
in Section 6.3 and WP4, para-public urban development corporations play a key role as
intermediaries between former landowners and developers. Additionally, grassroots
mobilization can be crucial in combating land artificialization. This is the case of the Triangle
de Gonesse, where strong opposition from local elected officials, farmers, and associations
led to the abandonment of a planned mega tourism and commercial complex in 2019
(Tonnelat, 2022). Furthermore, Fonticelli (2016) notes that the actors involved in densification
in urban areas differ from those operating in rural contexts. In the latter, for instance,
developers tend to be smaller-scale operators, constructing a limited number of housing units
and specializing in specific territories or types of development.

6.5 Achievements, assessments, and challenges

Since the 2000s, densification policies have yielded varied outcomes depending on the degree of urbanization of the targeted areas (metropolitan, peri-urban, rural, etc.) and their interplay with other policies not explicitly focused on densification (e.g. policies promoting homeownership). The recent study of CEREMA (2024) provides data on land consumption from 2009 to 2023, alongside population growth, which has proceeded at a slower pace during the same period. Overall, 66% of the urbanized land by 2023 was allocated for housing. At regional and local levels, this phenomenon is highly polarized, primarily driven by metropolization and the attractiveness of coastal areas (see annex 5).

Several studies have examined the effects of these policies on peri-urban areas, particularly
in single-family housing neighborhoods (tissus pavillonnaires), where they might take the form
of plot subdivisions or the construction of accessory dwellings (see part II of Touati and Crozy,
2015). Fonticelli (2019) observes that densification has been more pronounced in Île-De-France (IDF) than in other peri-urban areas of France (where housing development generally aligns with the objective of diversifying housing options). The author further notes that exceptional regulations limiting urbanization in Île-de-France (see section 6.2.1) have driven up housing costs, inadvertently fueling urban sprawl beyond IDF. Focusing on Lyon, the second most important urban agglomeration in France, Rousseau (2017) has highlighted the tension between the two main goals of urban renewal, namely land densification and social mix. This tension had led to discursive changes in regional planning, and the introduction of social housing in some territories due to regulatory quotas. However, the political consensus between municipalities and the Metropolitan Council has led to a preservation of functional reproduction, i.e. densification under control in the wealthy municipalities of the West vs. post-industrial densification in the East. In the latter this includes new-build gentrification that aims at attracting middle class populations in formerly working-class areas.

Other studies have focused on the effects of policies densification that favour the renovation of public transit proximity areas (primarily in metropolitan and peri-urban areas). In 2010, the Loi Grand Paris introduced a framework for transit-oriented development, setting an annual target of 70,000 housing units and establishing *Contrats de Développement Territorial* (CDTs) to spatially organize production and “control urban sprawl”. However, as underlined by Clerval and Wojcik (2024) the Grand Paris transit-oriented development project is accompanied by large-scale urban renewal initiatives, characterized by evictions in the private housing market under eminent domain purchase, demolitions and upgrading of social housing, and rising property prices.

In already dense areas, local authorities might also engage in densification through elevation (surélévation), i.e. by adding additional levels to existing buildings through the commodification of air rights. Focusing on the city of Paris, Bouchet-Blancou (2025) has found that elevation is likely to lead to real estate speculation, and thus to hinder affordability that it was supposed to bring through a rise in the housing supply. However, the number of these operations remain quite limited (120 per year in Paris, i.e. 1.33% of the plots identified) so that the effects of densification through air rights does not have the expected impact on prices. More fundamentally, this results from relying on the private market: due to the technical and administrative uncertainty tied to these operations, private developers tend to require a higher return, translating into a higher sale price leading to housing unaffordability. While supporters of this form of densification advocate for further fiscal advantages that are expected to generate price decrease, Bouchet-Blancou argues that this would only have a marginal impact.

Regarding the recent ZAN policy, Charmes (2021) suggests that its implementation might disproportionately impact rural areas by restricting single-family home construction, thus shifting the housing market in favor of cities at the expense of villages. He also associates ZAN with heightened land tensions, exemplified by the *Gilets Jaunes* protests. As Defay and Driant (2023) highlight: "ZAN seems to be just the tip of the iceberg of deeper, structural land issues that have been affecting housing production for several years." According to the authors, the issue is not—or at least not solely—the scarcity of land itself, but rather the tools currently available to local governments, particularly in terms of price regulation, land acquisition, and
the separation of land from property ownership<sup>87</sup>. As one interviewee pointed out, the ZAN highlights a paradox between ecological transition goals and the current local economic model. Small municipalities remain partly dependent on a local tax system tied to new construction (e.g. *taxe foncière*), rather than to land preservation.

<table><caption>Table FR8. Potential impacts of densification policies on housing inequalities and urban and territorial dynamics.</caption><thead><tr><td></td><td>Potential Impacts</td></tr></thead><tbody><tr><td>urban renewal and social mix</td><td>demolition of social and most affordable housing stock; risk of displacements for low-income households, new social housing often oriented towards middle-income</td></tr><tr><td>transit-oriented development and eviction risk</td><td>TOD might trigger evictions particularly in urban and periurban areas and rising property prices in working class areas, affecting affordability</td></tr><tr><td>zero artificialisation nette law (relaxed)</td><td>risk of disproportionally affecting small municipalities partly dependent on local tax system encouraging new construction over land preservation</td></tr><tr><td>air rights (limited so far)</td><td>particularly in zones tendues it might fuel real estate speculation and housing unaffordability; technical and administrative uncertainty might induce the increase of sale prices</td></tr></tbody></table>

# 7. Summary and discussion of results

This report provides an overview of the regulatory systems of Energy and Environmental Policies (EEPs) in France. The note specifically focuses on housing retrofitting, nature-based solutions, and densification policies which are framed within the context of national climate change mitigation and adaptation policies. A number of considerations arise concerning both the evolution and key changes of these three types of EEPs over time, as well as the relationships and trade-offs between each EEP housing affordability and equity issues.

## 7.1 Summary of changes in EEPs

When examining the three types of EEPs for France, some differences emerge in their trajectories, changes and implementation processes. Key milestones that have accelerated the move towards the three EEPs includes the Grenelle I and II (2009, 2010), the Loi de Transition Énergétique (2015) and, more recently, the Loi Climat et Résilience (2021). While emission reduction goals have been strengthened over time, implementation remains challenging, hindered by political instability, budgetary constraints, and global crises. Recent regulations, such as the ban on renting poorly insulated homes and limits on land artificialisation, have also triggered forms of backlash or resistance.

Housing retrofitting policies have been integrated into the national regulatory framework since the 2000s, also as a result of European directives on the subject. Over time, housing retrofitting

<footnote n="87"><sup>87</sup> the ongoing research programme Le foncier et le logement abordable 2022-2025 aims to further advance reflections by integrating issues of densification, land consumption, and affordability. More information at: https://recherche-foncierlogementabordables.fr</footnote>
policies have favoured incentive-based instruments (such as direct subsidies, tax deductions, or subsidised loans). In recent times, direct subsidies have mostly prioritized owner-occupiers over private renters, while social housing has received fewer subsidies for renovation. Additionally, housing retrofitting policies have also been gradually integrated in local and national urban regeneration policies. Although local authorities have progressively gained competencies related to energy renovation and energy poverty, their role remains mainly focused on support and coordination within a vertically structured governance system.

The institutionalisation of NBS is relatively recent and still lacks a common reference in terms of conceptual definition and implementation tools. NBSs are integrated into broader national policy frameworks for climate change adaptation, biodiversity protection, and water management. The absence of shared definitions, regulations, and targeted funding makes the implementation of NBS particularly complex and uneven. Overall, NBS has gained significant traction in national policy circles but faces considerable challenges in practical, local-level implementation.

Densification policies have their roots in the 2000s, linked to urban regeneration strategies, transit-oriented developments and efforts to counter urban sprawl. More recently, the focus has shifted towards achieving zero land artificialisation and preserving open and agricultural areas. Though their outcomes vary depending across metropolitan, peri-urban and rural areas, different financial instruments have been promoted for the reuse of industrial sites and vacant buildings. However, densification policies are still applied discretionarily unevenly, with a significant influence from local political will. Furthermore, zero land take goals recently caused political opposition and strain relations between the federal and local governments, especially in rural and small towns.

## 7.2 Relations and trade-offs between EEPs and housing policies

The relations and trade-offs between EEPs and housing policies appear to be shaped by institutional, political contexts, and the evolution of the national housing systems (see D4.2 for more details). This section presents some hypotheses on how EEPs might create tensions with housing affordability and social equity, across different housing tenures, territorial configurations, and diverse forms of urban regeneration.

Different dynamics can be observed in housing retrofitting also depending on housing tenure, existing policy tools and the regulatory framework. In addition, the lack of territorial differentiation and the uneven distribution of local energy renovations funding may exacerbate territorial inequalities.

Upfront energy renovation costs and complex administrative procedures tend to benefit households with saving or access to credit to the detriment of economically vulnerable ones. Moreover, a growing divide might emerge between deeply renovated properties and those left unrenovated or lightly renovated due to owners limited resources or a lack of clear return on investments.

The recent law stating the ban on renting poorly insulated housing may may impact low-income owner-occupiers who rely on renting out part of their property for supplementary income. If
their dwelling becomes non-rentable, and they are unable to afford renovation, they may face
a loss of monthly income and be pushed to rent informally or sell the property.

These dwellings might then be acquired, renovated and re-rented at higher prices.
Furthermore, the lack of weakness of rent control measures after energy renovations works
might tend to rent increase and to displacement of low-income tenants.

In the social housing sectors, limited financial resources and public subsidies may push social housing providers to adopt strategies to ensure financial viability of energy renovation operations. These may include diversifying social housing production, partially selling the stock, or prioritising the renovation of existing units over new construction.

Among the three type of EEPs considered, NBS policies appear to be least developed and more recently institutionalised. There is a limited number of studies and policy debate on their potential impacts on housing inequalities. However, urban transformation processes and green spaces (eco-quartiers) have shown to drive gentrification dynamics in urban and metropolitan contexts.

Additionally, the implementation of NBS policies is mainly entrusted to local communities,
resulting in a fragmented landscape shaped by local political will and resources availability.
The varying exposure to environmental risks across different regions and populations is often
overlooked, potentially leading to uneven distribution of environmental benefits and deepen
existing inequalities.

Lastly, the acceptability of NBSs might vary depending on urban gradient, urban areas with limited access to green spaces and nature might be more supportive of NBSs, while other territories might express resistance. This may generate tensions and hinder coordinated supra-local policies (inter-municipal, metropolitan. etc.).

Various configurations of densification might result in different effects on housing affordability issues in relation to national housing policies system and evolution and local political contexts (see also D4.2).

Urban regeneration and social mix can lead to the demolition of social or most affordable housing units, potentially causing the displacements of low-income households. In some cases, newly built social housing tends to mainly target middle-income groups.

Massive investment into rail infrastructure and neighbourhoods around the train station (such as TOD approaches) is likely to raise land and real estate prices, pushing out working class residents, particularly in urban and peri-urban areas.

BIMBY approaches may reproduce or reinforce existing spatial disparities, where wealthy areas remain unchanged and only lightly densified, while working-class neighbourhoods undergo major transformations attracting more affluent residents.

*Zero Artificiariat Nette* may disproportionally affect small municipalities and rural areas, which partly rely on local tax system linked to population growth and new construction over land preservation.
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Touati, A. (2013) *Économie politique de la densification des espaces à dominante pavillonnaire: L'avènement de stratégies post-suburbaines différenciées*. École Nationale des Ponts et Chaussées.

Trouillard, E., Quatrain, C. (2022) Reconvertir les bureaux et bâtiments d'activités en logements : un potentiel encore sous-exploité, 963, Institut Paris Region.

Vailles C., Ousaci S. (2024) French observatory of access conditions to the ecological transition, I4CE Intitute for Climate Economics.

Valranges, D. (2018) La rénovation énergétique : une priorité nationale, Actualités Habitat USH, n°1078, 40p.

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Vincze, E., Betavatzi, E. (2024) *The impact of EU policies on housing and urban development*. Rosa Luxemburf Stiftung, Brussels Office.
# 9. Annex

## 9.1 List of interviewees

<table><caption>Table FR8. List of interviewees</caption><thead><tr><td>Name of the institution</td><td>Type</td><td>Date</td><td>Place</td><td>Length (in min)</td></tr></thead><tbody><tr><td>Fédération des offices publics de l'habitat (FOPH)</td><td>Social housing provider (public)</td><td>28/04/2025</td><td>FOPH headquarter s, Paris 8ème</td><td>110</td></tr><tr><td>Institut Paris Region (Regional planning agency for the Paris region) (IPR)</td><td>Local agency</td><td>22/05/2025</td><td>online</td><td>60</td></tr><tr><td>Coordination gouvernementale du plan de rénovation énergétique des bâtiments (CIPREB)</td><td>National government</td><td>22/05/2025</td><td>Paris La Défense</td><td>90</td></tr><tr><td>Agence nationale de l'habitat (national agency overseeing energy retrofit policy) (ANAH)</td><td>National agency</td><td>07/05/2025</td><td>ANAH headquarter s, Paris 1er</td><td>80</td></tr><tr><td>Direction de l'Habitat, de l'Urbanisme et des Paysages (DHUP), Ministry of Ecological Transition</td><td>National government</td><td>18/06/2025</td><td>Paris La Défense</td><td>100</td></tr><tr><td>Fédération des entreprises sociales de l'habitat (ESH)</td><td>Social housing provider (private)</td><td>16/07/2025</td><td>ESH headquarter s, Paris 8ème</td><td>80</td></tr><tr><td>Association des directeurs généraux des communautés de France (ADGCF)</td><td>Intermunicipal government</td><td>17/07/2025</td><td>ADGCF headquarter s, Paris 9ème</td><td>80</td></tr></tbody></table>

<table><thead><tr><th rowspan="2"></th><th colspan="2">France</th><th colspan="2">Europe</th></tr><tr><th>Framework</th><th>Objectives</th><th>Framework</th><th>Objectives</th></tr></thead><tbody><tr><td>2000</td><td>PNLCC (in agreement with Kyoto Protocol)</td><td>- maintain emissions in 2010 at their 1990 levels</td><td>/</td><td>/</td></tr><tr><td>2004</td><td>Plan Climat</td><td>- reduce France's GHG emissions by at least 75% by 2050 compared to 1990 levels (Factor 4)</td><td>/</td><td>/</td></tr><tr><td>2009 (and 2010)</td><td>Loi Grenelle I (and Grenelle II)</td><td>- reduce France's GHG emissions by 20% by 2020 compared to 1990 levels.<br/>- increase the share of renewable energy to 23% of final energy consumption by 2020.</td><td>2020 climate and energy package</td><td>- reduce GHG emissions of 20% by 2020 compared to 1990 levels;<br/>- achieve 20% energy dependence on renewable sources<br/>- increase energy savings by 20% compared to 1990 levels</td></tr></tbody></table>
<table><caption>Table FR9. France and European climate and energy framework: key targets</caption><tr><td>2014</td><td>/</td><td>/</td><td>2030 climate and energy framework</td><td>- reduce GHG emissions before 2020 by 40%, - achieve 32% energy dependence on renewable sources - increase energy savings by 32,5% compared to 1990 levels</td></tr><tr><td>2015</td><td>Loi Transition Énergétique + SNBC (in agreement with Paris Agreement)</td><td>- reduce emissions by 27% by 2030 compared to 2013 levels. - achieve carbon neutrality by 2050. - achieve 32% energy dependence on renewable sources by 2030.</td><td>/</td><td>/</td></tr><tr><td>2018</td><td>/</td><td>/</td><td>2050 long-term strategy</td><td>- become the world's first climate-neutral continent by 2050 - an intermediate ambitious objective to reduce GHG emissions by 55% by 2030 from 1990 levels</td></tr><tr><td>2019 (and 2020)</td><td>Loi Energie Climat (and SNBC revision)</td><td>- achieve carbon neutrality by 2050. - in the short and medium term, adhere to carbon budgets set by decree, meaning emission caps to be respected over five-year periods.</td><td>European Green Deal</td><td>- making the EU the world's first climate-neutral continent by 2050 - an intermediate ambitious objective to reduce GHG emissions by 55% by 2030 from 1990 levels</td></tr><tr><td>2021</td><td>Loi Climat et Résilience</td><td></td><td>/</td><td>/</td></tr></table>
<figure><img src="image_32.png" /><figcaption>Figure FR9. LIFE ARTISAN pilot projects.</figcaption></figure>
<figure><img src="image_33.png" /><figcaption>Figure FR10. Excerpt from the map Maîtriser le développement urbain of the SDRIF-E, 2024 (source: SDRIF-E, 2024)</figcaption></figure>
<figure><img src="image_34.png" /></figure>

Figure FR11. NAF land consumption for housing purposes in hectares between 2009 and 2023 at the municipal level (source: CEREMA, 2024)

<footnote>* Consommation d'espaces naturels, agricoles et forestiers (NAF) d'après les Fichiers fonciers 2009-2023 : cette consommation est calculée à partir des déclarations d'impôts de la taxe foncière. Une parcelle est donc consommée à partir du moment où une déclaration fiscale fait passer cette parcelle en espace artificialisé. Cette déclaration fait souvent suite à un autre acte administratif (permis de construire, d'aménager, etc.).</footnote>

<footnote>Elle ne prend pas en compte les surfaces non cadrées, ni la consommation d'espaces provoquée par les acteurs ne payant pas de taxe foncière (notamment collectivités).</footnote>

<footnote>La consommation est calculée en faisant le différentiel des surfaces artificielles entre chaque millésime des Fichiers fonciers. Des redressements à la main ont été effectués sur certaines communes. Les détails de la méthode et les chiffres bruts sont présents sur https://artificialisation.developpement-durable.gouv.fr/</footnote>

<footnote>Pour des raisons de représentation, la Guyane apparaît 3 fois plus petite qu'elle ne l'est en réalité.</footnote>
# NATIONAL REPORT ON THE REGULATORY SYSTEM OF EEPs IN HUNGARY

## 1 Executive Summary

The current report is the final version of the study on the assessment of the regulatory framework of Energy and Environment Policies in Hungary. It aims to present the conditions in which retrofitting, densification and Nature-based Solutions are implemented. It also aims to set the first hypothesis on the impact of these three policy interventions into housing inequalities. This issue is not researched nor discussed in Hungary yet, for several reasons.

One of the main reasons can be the lack of large scale public-led urban development projects that are either of green nature or intend to create affordable housing solutions. Consequently the traditional trade-off between the green content of a new development versus providing affordable housing is far not the question that was ever raised.

Patchwork retrofitting interventions in a primary (over 97%) privately owned housing environment have much less and much less rapid impact on real estate prices and the change of residents. Densification in the already dense urban structure, in case it has a patchwork style, also hardly reaches a critical mass that changes the social environment. While large scale densification projects happen on brownfields that do not have original residents, and these projects are poorly market based, not considering affordable housing provision at all. Green interventions are mostly of patchwork nature as well, and except for the major urban centres, these green interventions are small and build on the already existing green areas, not resulting in a completely new living environment.

For all these reasons gentrification or renoviction is not discussed in the context of green investments. What is rather discussed is the consequence of the absence of green investments on the quality of living and the quality of housing. Coping with the challenges of climate change, the heatwaves and the uncertain energy supply requires green interventions which are currently going on at a rather low intensity. Due to not meeting certain legislative and political conditions, Hungary has a limited access to EU funds, and the economic recession also limits the financial scope public entities have. The financial difficulties are coupled with the strong centralisation process since 2011, which has taken away several funds and competencies from local municipalities, who are otherwise the actors responsible for local housing, spatial planning and green investment.

## 2 Introduction and methodology

The current study is the final version of a national report on the framework conditions of green investments in Hungary.

It covers the three major themes of ReHousIn, namely the retrofitting of residential buildings, the Nature Based interventions in urban areas and the densification processes in and around
urban centres. The three themes are covered by main chapters, broken down to sub-chapters on the policy cycle, the implementation process, the role of the market and the multi-level governance. All three themes end with the measured and potential impacts of green investments on housing inequalities.

The study is primarily based on desk research, using the publicly available datasets, the national legislation and strategies, but it also builds on scientific evaluations and the own direct research and consultancy experiences of the authors. The document also relies on inputs from the first Policy Lab implemented on the 1 of April 2025, which event brought together a diverse group of stakeholders among them policy experts and national and local level policy implementers. In order to fill in the knowledge gap after the desk research phase and include the field experiences of planners and practitioners, national and local level expert interviews were carried out in May-June 2025. (The detailed list of interviews can be found in Annex 3).

The major limitation for the study is the fact that the housing inequality aspects of green investments is not a topic that is highly discussed in the scientific and policy community. Consequently, there are no studies available that the authors could rely on, rather the research framework had to be developed from scratch in the ReHousIn project.

3 General governance system

Hungary has a population of 9.6 million people, out of which 70% lives in cities – including 1.7 million people in Budapest. Hungary's population has been declining since 1980. Natural increase has been negative since 1981, 0.3-0.5% per year. Within the country, there is a strong migration of population to abroad (about 4% of the inhabitants with Hungarian nationality live in other EU countries, and another 1-1.5% may commute every day crossborder). According to the statistics, from 2016 the outmigration of people with Hungarian nationality is counteracted by people coming back from abroad. In addition there is a slight immigration from other countries, that consist of a rather short term labour force under regulated conditions<fnref n="88" />. Additional migration can be experienced inside the country to certain urban centres, resulting in a significant decline in rural areas.

As Figure 1 shows, real increase of population can only be experienced in the agglomeration of a few urban growth poles (like Budapest, Győr, Debrecen, Szeged) and in settlements around the lake Balaton.

<footnote n="88">⁸⁸ https://www.oeconomus.hu/irasok/a-munkaero-aramlas-20-eve-magyarorszagon-es-az-eu-ban/</footnote>
<figure><img src="image_35.png" /><figcaption>Figure HU1. Change of population in all the settlements of Hungary between 2011-2022</figcaption></figure>

The consequence of this overall demographic decline and selective growth of urban agglomerations is that the pressure on the urban housing market is much smaller than that of the urban centres of most parts of Europe. It has an impact on the lower relevance of densification and green gentrification in general. On the other hand it is important to mention that the highest growth rate of real estate prices between 2015 and 2024 could be experienced in Hungary (especially in Budapest) among the European countries. According to the Eurostat<fnref n="89" />, the price of average units increased by 198% as opposed to the 47% European average. This price growth however does not strictly come from the increase of the population (as it is officially decreasing), but rather from financialisation - growing share of short term rentals mostly in Budapest- the high inflation rates and demand side subsidies of the government against the decreasing supply.

Regarding the country's housing stock, an increasing trend can be seen in the number of dwellings, reaching 4,586,000 by 2023. In 2022 (census) about 2.4% of the whole dwelling stock was municipally owned, the rest was privately owned, and the rate is ever decreasing. While the rate of owner occupation is very high, the respective population living in owner-occupied housing is 90%, while the remaining 10% are tenants, as was mentioned, 2.4% in municipal housing and 7.6% in private rental dwellings (Central Statistical Office, 2023).

<footnote n="89">89 https://telex.hu/valasztasi-foldrajz/2024/11/11/legmagasabb-ingatlanar-emelkedes-europai-orszagok-magyarorszag-terkep</footnote>
Although this tenure structure has been favoured by most governments and their housing policies since the changing of the system in 1989/90, in recent years an even further push for homeownership can be seen by the government. Not only ownership is heavily favoured by the current policy environment, but it is also specifically the ownership of single-family homes that has been preferred.

In 2011, 62% of the housing units were in single-family homes (buildings with 1-3 apartments), and 38% of the flats were in multi-family homes (buildings over 3 apartments) in Hungary. This division is substantially different in cities, e.g. in Budapest 16% of the apartments are in single-family homes while 84% in multi-family buildings (Census 2022).

Housing and green policies are implemented in a multi-level governance system. The transition from the socialist system before 1990 resulted in a strongly decentralised new governance method, in which local municipalities gained high competencies. The decade following the financial crisis however can be characterised by new governance approaches, most of which can be labelled as ‘centralisation’ and “deconcentration”. Local municipalities have lost most of their competencies in the field of education, health, social policy, and also competencies as authorities in various fields e.g. construction, foster care. In the 2000s NUTS 2 regions (there were seven of which in Hungary, and currently there are eight with the split of the Central-Hungarian Region into two) obtained important roles in the distribution of EU funds, which function was centralised also in the 2010s. Regions recently have only a statistical role. Strategic planning was delegated to the 19 counties of Hungary, which have practically no competencies in any other public issues. The central government functions are deconcentrated into 174 territorial units (called “járás”)<fnref n="90" /> where most of the every-day issues are handled such as obtaining documents or applying for unemployment benefit.

The share of Hungarian subnational government expenditure in total government expenditure (12.5%) was significantly below the OECD average (36.6%) in 2020, and decreased since then. Using Covid as a new argument, the central state imposed new taxes on urban centres (so-called solidarity tax) which further decreased the room of maneuver local municipalities have and made them more dependent on central resources.

The division of roles in a multi-level governance perspective regarding the main themes of ReHousin can be seen by the following table.

<table><thead><tr><th></th><th>Housing</th><th>Housing retrofitting</th><th>NBS</th><th>Densification</th></tr></thead><tbody><tr><th>National Parliament</th><td>Annual national budget<br>Housing law</td><td>National climate and renovation strategies<br>Laws on climate change and energy efficiency</td><td>National environmental strategies</td><td>Framework laws in spatial and urban planning, architecture, environment, etc.<br>National spatial development plans<br>Spatial development plans of priority regions</td></tr><tr><th>National government</th><td>Decrees on state level housing</td><td>Decrees on technical standards of</td><td>Governmental decrees on the</td><td>Governmental decrees governing</td></tr></tbody></table>

<footnote n="90">⁹⁰ „Járás” is equal to the aggregation of local municipalities with regard to governmental functions, and includes 20-50,000 people in rural areas, and 100-200,000 people in urban centres.</footnote>
<table><caption>Table HU1. General role of different governance layers with regard to housing and green policies</caption><tr><td></td><td>subsidies and programmes</td><td>retrofitting and new construction<br>Decrees on subsidies for retrofitting</td><td>role of municipalities in green investments</td><td>details and implementation<br>Direct government of "national priority projects"</td></tr><tr><td>Regional level</td><td colspan="4">Until 2010 regional authorities planned and distributed EU funds dedicated to regional levels</td></tr><tr><td>County level</td><td></td><td></td><td>Spatial development plans</td><td>Spatial development plans</td></tr><tr><td>Microregions (deconcentrated governmental authorities - járás)</td><td></td><td></td><td>Construction authority</td><td>Construction authority</td></tr><tr><td>Local municipalities</td><td>Local decrees on housing allowances<br>Management of the municipal housing stock</td><td>Local renovation subsidy schemes<br>Local regulations on heritage protection</td><td>Local building codes</td><td>Local spatial plans and building codes</td></tr></table>

## 4 Housing retrofitting

In 2020, 34% of all primary energy went to residential buildings in Hungary. 71% of all energy used in residential buildings was used for heating. Regarding heating, 52% of the energy used for heating came from natural gas, 22% from renewable sources (mostly firewood), electricity was used in 18% of the cases and district heating is responsible for 8% of the energy use in the residential heating sector (Tóth, et al., 2023).

According to the Odysee-Mure database **Hungary has the second highest energy need for heating concerning the residential building stock in the European Union.** In general, the energy need for heating per square meter in residential buildings has decreased in the European Union from 2000-2021 by 25.9%, while it has decreased only by 4.8% in Hungary.

There are different statistics with regard to the results achieved concerning the renovation process. According to the Census of 2022, about 1/3 of the Hungarian housing stock has some additional external insulation, while also about 1/3 of the housing units have an air-conditioner (this rate is increasing fast lately due to the extreme hot summers in Hungary)
<figure><img src="image_36.png" /><figcaption>Figure HU2. Composition of the Hungarian housing stock based on their calculated energy consumption (certification)</figcaption></figure>

Source: Bene et al. 2023

As the figure above shows, the worst performing building stock consists of mostly family houses, while multi-family buildings in general have higher standards. As opposed to the common belief on the Eastern European panel housing stock, these pre-fabricated buildings have higher than average energy standards, while family houses of the 1950s and 1960s that were built in high numbers based on unified architectural plans, have much worse energy parameters.

According to the basement report by Price Waterhouse in 2023 about 80% of the Hungarian housing stock needs a refurbishment, which would mean 3 million dwellings by 2050. For this, about 3.2% of the stock should be renovated each year - about 120.000 dwellings per year - instead of the current 0.5-1%. The renovation cost is predicted to be about 150-250 Euro/m2, resulting in about 59 billion Euros all together. Comparing the proposed number of units to be renovated annually with the currently running only one subsidy scheme with the target of 20,000 units to be completed in years (exclusively family houses), we can evaluate the challenge of the task.

On the other hand, as regards the short term goals set by the recast of the Energy Performance of Buildings Directive, to reduce the primary energy consumption of residential buildings by 16% till 2030, it is easier to reach. For this the ultimate tool is not only the renovation but the reduction of consumption. E.g. from June 2022 to February 2024 the gas consumption of residential buildings decreased by 24% as a result of increasing gas prices for households whose consumption exceeded a certain threshold level.
4.1 The policy cycle: emergence of the issue and policy decisions

The policy considerations around the energy efficient renovation of the residential stock can be seen from two major angles: 1) renovation as the physical improvement of the stock and 2) energy and climate considerations as one of the attributes of renovation. The two considerations do not necessarily go hand in hand as buildings have generic refurbishment needs and also energy improvement needs.

The physical improvement of the stock was predominantly conceptualised as part of the demographic policy of the government from 2020. Subsidies for renovation of multi-family dwellings and family houses could be obtained in case the family had (or promised to have) children and met some minimum social criteria (having social security, being credible for loans) The largest subsidy schemes with regard to supporting the refurbishment of the building stock were (and are still) tied to these demographic policies.

**Regional policy also has a relevance in supporting building renovation.** There are renovation subsidies for families with children or most recently for pensioners, that have a special spatial target to settlements below 5000 residents that are also losing population. Thus building refurbishment is encouraged to counteract rural decline.

There is another policy aspect of supporting the renovation of residential buildings, that have a focus on multi-family buildings. Interest rate subsidy for the renovation of condominiums and cooperatives has existed since 1988. The 1980s was the decade when the construction of private cooperatives and condominiums accelerated (in parallel with the enlargement of the state owned rental stock). The relevance of private management of multi-family buildings has strengthened from 1994, when the large scale privatisation process started. This process transferred the ownership of hundreds of thousands of multi-family units from public to private hands, to the sitting tenants, thus creating ten thousands of new condominiums. The state-financed interest rate subsidy (however was not very relevant in scale) was promoted as a tool to help the new communities to finance the renovation process.

In the subsidy schemes mentioned above energy efficiency was not a factor for consideration, however it was not excluded either.

**Energy efficiency in the residential sector became an important attribute in 2000,** when the decree on housing subsidies was elaborated (12/2001 Government Decree on housing subsidies). The new housing decree entering into force in 2001 contained a new subsidy scheme that provided ⅓ of the renovation costs by the state and ⅓ was required from the local municipalities for the energy efficient renovation of buildings built by industrialised technology. That time the focus was on the industrialised stock as was the case in the neighbouring post-socialist countries. The financial crisis terminated the subsidy system that was once reborn in 2015 for one call. Since then no non-repayable subsidies were provided for multi-family buildings.

The emphasis was step by step transferred to the family housing stock. There might be several reasons behind this. The Long Term Renovation Strategy of Hungary (2021) and the technical surveys behind have shown that **family houses in general have much worse energy efficiency conditions than that of multi-family buildings** and many of them can be
renovated in a more cost-efficient way. In addition, the funds used by family houses are easier to spend as the decisions for renovation are much simpler than in multi-family buildings where at least a majority decision is needed in a General Assembly. This simplicity of decision as an argument for family houses when funds have to be used up in a short time period, is reasonable.

The emphasis towards family houses was manifested in the fact that certain subsidy types (e.g. interest free loan between 2017-2022, subsidies for solar panels) were practically accessible only by them. (Sharing energy coming from solar panels in multi-family buildings is still not legally possible in Hungary, however the legislation is about to change.) The most recent grant scheme that started in July 2024 also addresses only family houses, with ringfenced amounts for Budapest and the other regions.

Subsidies currently do not play a major role in financing energy efficient interventions - except for about 20.000 family houses. According to the Long-Term Renovation Strategy of Hungary (2021) the major financial tool is the Energy Obligation Scheme that started in 2021, **thus the government plans to strengthen the private market as opposed to the use of public funds.**

**The EU accession had an impact on the energy efficient refurbishment of the urban (and the rural) residential building stock through two major channels: through subsidies and through legislation.**

In case of subsidies we can state, that the first waves of subsidies came from the state budget (2001-2009), then from selling CO2 quotas (in 2015), while the interest rate subsidy (2017-2022), the solar panel subsidies (2021-2024) and the latest call from 2024 are financed primarily from EU funds.

The major source of EU funding currently in Europe is the Recovery and Resilience Facility, for which Hungary is not yet eligible.<fnref n="91" /> The European Union as a source of financing is considered a benefit in the Central-European Region on the one hand, but also as a set of highly bureaucratized criteria that have to be included into the national calls on the other.

European funds were accessible for housing purposes in the 2007-2013 budgetary period for the first time, but the very first wave of them were not focusing specifically on energy efficiency but on housing in marginalised areas. Housing had to be part of a complex intervention that contained physical and social elements as well. The physical elements included the renovation of public spaces, public buildings but also the energy efficient renovation of the publicly owned and privately owned housing. These programmes (so-called social rehabilitations in Hungary) were the first ones that resulted in completely renovated panel buildings from EU funds in Budapest and also in some other major cities of Hungary.

**In parallel with the founding streams the technical legislations have also gained relevance.** (The transposition of the European legislation can be followed by the information

<footnote n="91">⁹¹ Hungary got less than 1 billion Euros as a prepayment from RRF as opposed to the 9.7 billion Euros dedicated to this fund in the country. In addition, this amount may also be withdrawn by the EU in case certain conditionality criteria is not met. The remaining funds can not be accessed either in case some changes in the educational, jurisdictional and media legislations are not changed.</footnote>
set provided in Annex 2). The main directives (Energy Performance of Buildings Directive, Energy Efficiency Directive) were transposed to the Hungarian legislation in the form of ministerial decrees. The most relevant from them was the 7/2006 TNM decree, which has changed time to time, following the changes in the EU legislation and concluding to the most recent 9/2023 ÉKM decree. These decrees contained the conditions under which new construction, major renovations and energy certification should be implemented. These conditions were tightening gradually aiming to reach the cost-efficient technical parameters of renovation. As an example, based on the most recent recast of the EPBD (spring 2024) the instalment of fossil fuel stand alone boilers should not be subsidized anymore in the current subsidy calls. Interestingly enough, sometimes the Hungarian requirements for building renovations are much more strict than the requirements of the EU legislation. E.g. while the EPBD of 2002, 2010 and also the latest recast says that "Member States shall take the necessary measures to ensure that when buildings undergo major renovation<fnref n="92" />, the energy performance of the building or the renovated part thereof is upgraded in order to meet minimum energy performance requirements set in accordance with Article 4 in so far as this is technically, functionally and economically feasible.... Those requirements shall be applied to the renovated building or building unit as a whole. Additionally or alternatively, requirements may be applied to the renovated building elements....Member States shall in addition take the necessary measures to ensure that when a building element that forms part of the building envelope and has a significant impact on the energy performance of the building envelope, is retrofitted or replaced, the energy performance of the building element meets minimum energy performance requirements in so far as this is technically, functionally and economically feasible." In the Hungarian legislation the energy standards in case of major renovation can not only be applied to the renovated part (e.g. facade) alone, but to the whole building, thus buildings undergoing major renovation have to make additional investments in order to reduce their energy consumption below 110-150 kWh/m²/year. This standard requires high investments for many buildings, which hinders the implementation of a step-by-step renovation. On the other hand it is important to note, that even if meeting the obligations of the government decrees is legally binding for the implementers of the renovation, neither the state itself nor the local municipalities and the housing owners follow the rules properly. As the technical standards are set too high, state subsidy programmes, local subsidy programmes and private renovation interventions tend not to follow them and due to the shortage of human resources to check the requirements, the avoidance of laws remain uncovered.

There are no specific requirements with regard to social housing and there are no minimum energy performance requirements introduced for housing either.

With regard to energy poverty, in case we apply some common indicators used in the European Union, we can see, that Hungary has an average position compared to the other EU member states, e.g. having 8.7% of the population not being able to warm up their homes, or 7.3% is declared to have arrears in paying utility bills - EU SILC 2023. As regards the strategy around energy poverty, we can state that Hungary is still at the starting point. It is compulsory to work out a definition on energy poverty at the National Energy and Climate plan, but even in the latest version (2024), the definition is quite vague: "Vulnerable customers/households are those, who have difficulties in securing the basic energy needs of their flat. The term

<footnote n="92">⁹² Major renovations are those that affect at least 25% of the building envelope.</footnote>