<table><caption>Table PL9. Impacts of NBS policies on housing inequalities in Poland</caption><thead><tr><td>Impact Area</td><td>Measured Impacts</td><td>Potential Impacts</td></tr></thead><tbody><tr><td></td><td>City is transforming over-paved courtyards, streets, and squares into green, permeable, and socially inclusive spaces.</td><td></td></tr><tr><td>Air Quality</td><td>In Warsaw and Krakow, projects involving green belts along streets and pocket parks were implemented, which reduced the concentration of suspended dust in the vicinity of communication artillery.</td><td>In the future, widespread implementation of NBS could significantly lower air pollution, benefitting low-income neighbourhoods that often face poor air quality.</td></tr><tr><td>Flood Risk Reduction</td><td>Rain gardens and permeable surfaces were used in housing estates, which reduced local flooding after heavy rains (e.g. Gdańsk, Katowice)</td><td>NBS like rain gardens, permeable surfaces, and restored wetlands could provide significant flood risk reduction in vulnerable housing areas.</td></tr><tr><td>Community Engagement</td><td>In larger cities (e.g. Łódź, Katowice, Gdańsk), "green civic budgets" have been introduced, and projects chosen by residents include initiatives such as planting trees, creating community gardens, and managing greenery.</td><td>Future NBS policies could increase social cohesion by encouraging community-led green space initiatives, which could improve neighbourhood relations in marginalized housing areas.</td></tr><tr><td>Aesthetic Value</td><td>The transformation of urban space using NBS improved the aesthetics and attractiveness of the space (e.g. revitalization of Łódź, Gdańsk, Radomsko).</td><td>In the future, NBS could transform neglected areas, potentially leading to a rise in property values.</td></tr><tr><td>Housing Affordability</td><td>There are pilot programs with green roofs in municipal buildings (e.g. Krakow).</td><td>Future policies could incorporate NBS in affordable housing development, improving living conditions without raising rent prices.</td></tr></tbody></table>

Source: own elaboration.

Changes introduced at the local level must be the result of close cooperation of all entities responsible for creating and implementing urban policies related to climate, directly and indirectly. An important actor in this cooperation should be residents. The process of implementing climate change adaptation activities must be continuous, not sporadic, to be effective. Both climate change and adaptation activities are subject to constant transformation, so conclusions developed once may cease to be relevant in the shorter or longer term. Therefore, it is worth repeating activities aimed at learning opinions and developing recommendations and solutions for adaptation to climate change (Rzeńca et al., 2024).

Due to the *National Urban Policy 2030* (2022) one of the key challenges is increasing water retention. In urban areas and their functional zones, it is essential to gradually expand the share of permeable surfaces, particularly biologically active ones. To manage rainwater safely and economically while enhancing retention, the development of blue-green infrastructure is crucial.
Polish cities face worsening environmental problems due to spatial policies that fail to support climate change adaptation strategies. This has weakened their climate resilience. Key issues include insufficient monitoring of urban surface sealing, neglect of resilience-building in urban planning and construction decisions, downplaying climate change risks amidst growing investment pressures and exclusion of climate change adaptation in spatial policy models. These shortcomings hinder the cities' ability to cope with climate challenges (Rynio et al., 2023; Sobol, 2023).

In the context of NBS in Poland, there have been several corrective public policies that have aimed, with varying degrees of success, to mitigate socio-spatial inequalities, especially those related to the geographical distribution of green spaces and their associated benefits. EU-funded urban regeneration programs have supported revitalization efforts in post-industrial cities by integrating green infrastructure into socially deprived areas. The National Urban Policy promotes sustainable development and equity by encouraging integrated revitalisation strategies that combine housing improvements with the creation of green spaces.

At the municipal level, cities like Warsaw, Wrocław, and Poznań have adopted green infrastructure strategies that prioritize interventions in underserved districts, while participatory budgeting has empowered residents, especially in marginalized communities, to propose and vote for small-scale greening projects. These efforts have helped narrow environmental disparities, but challenges remain, including uneven implementation, limited long-term funding, and the risk of green gentrification. Ensuring more equitable outcomes will require stronger coordination between housing policy, environmental planning, and social protection measures.

## 6 Densification

Urbanization is a global phenomenon that poses significant challenges to cities seeking to increase density through sustainable development. In Poland, these challenges are exacerbated by suburbanization processes and the lack of a comprehensive spatial development policy. Densification, a key strategy for achieving sustainable urban development, has become a critical objective in addressing these challenges. This approach aims to optimize land use, limit urban sprawl, and create more compact, efficient, and environmentally friendly cities. However, its implementation requires careful consideration of social, economic, and environmental factors, as well as alignment with broader policy frameworks.

This chapter examines the policy cycle surrounding densification projects in Poland, exploring how the problem emerged, the policy decisions taken, and the interplay between EU and national policies. It highlights the importance of strategic planning and legal frameworks in achieving a sustainable spatial order.

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

Densification projects in Poland, as well as in many other countries, are a response to growing urban populations, the need for sustainable development, and the efficient use of land. The
main challenge in Poland is the lack of a coherent spatial development policy and clear principles for shaping development. Urban policy and development are shaped by interconnected EU and national policies, with EU guidelines often acting as a catalyst for national reforms, while local adaptations reflect the unique needs of urban development in Poland. With the growing importance of spatial order and sustainable development and following Poland's accession to the EU and the adoption of EU documents, there was a need to take action to adopt or update legal and strategic documents (Figure PL9).

<figure><img src="image_87.png" /><figcaption>Figure PL26. Timeline with main milestones for development of policies related to densification projects in Poland</figcaption></figure>

Source: own elaboration.

EU cohesion and spatial policies have significantly influenced urban development in Poland, especially through financial support (European Regional Development Fund, Cohesion Fund) as well as strategic frameworks. The 2023 national planning reforms, including revisions to zoning laws and the introduction of integrated planning instruments, have aimed to streamline urban development and support revitalization, but implementation remains uneven across regions. In practice, municipal-level initiatives, such as city-led revitalization programs and changes to local zoning plans, are often the most immediate drivers of densification. However, a strong private developer presence, combined with a weak public housing sector, has raised concerns about gentrification and affordability.

The legal status of densification projects is regulated primarily by the **Act on spatial planning and development** (2003), as well as **the Act of Building Law** (1994) and regulations issued for this act. The particular importance in the implementation of the investment is the **Decree of the Minister of Infrastructure on the technical conditions to be met by buildings and their location** (2002). It should be noted that these acts are constantly being amended, also for the purposes of adapting them to EU law, in particular these changes were visible after Poland's accession to the EU in 2004.

Issues concerning the role of urban areas at the European level have appeared in the European Commission's communications since the 1990s. Several EU initiatives have had an impact on cities and development. Also, the last dozen or so years of meetings of EU countries
have resulted in many adopted documents defining the vision, priorities and framework for creating urban policies in the Member States for sustainable development. The need to strengthen the role of cities in shaping future EU policies is emphasised specially by: The Urban Agenda for the European Union, The New Leipzig Charter (November 2020).

The **Act on the principles of development policy** (2006) is a key legal act that regulates the planning, coordination and implementation of development policy in Poland. It provides a legal framework for the integration of various political and financial activities at the national, regional and local levels. Based on this act, two documents at the national level were adopted: **National Urban Policy 2023** (NUP2023) in 2015 and updated in 2022 – **National Urban Policy 2030** (NUP2030). In relation to the current NUP2030, it is indicated that sectoral policies relating to cities and their functional areas should be coordinated. The discrepancies still result from the lack of correlation between policy actions taken after the political transformation at the end of the 20th century and Poland's accession to the EU in 2004. European Union policy towards cities focuses on the role of cities in economic development as well as in achieving sustainable development. Therefore, to adapt the administration at the national level to the European level, Poland has implemented many actions aimed at improving the condition of Polish cities. In relation to Polish legal acts and the implementation of policy in this area, the above-mentioned National Urban Policy is of particular importance. The preparation of this document indicates the challenges that Polish cities face in various aspects, but considering the issue of densification projects, it is in this document that one can find information and principles regarding these projects. One of the main assumptions of urban policy is to strive to develop urban areas (in structural compactness) in a sustainable and responsible manner and to rationally use space and available resources within the concept of a compact city.

In 2011 some recommendations supporting the densification process were included in the now-defunct **The National Spatial Development Concept 2030**. The document argued that settlement trends resulting from lifestyle changes – such as spontaneous suburbanisation, dispersal of development in rural areas, development of second-home colonies functionally disconnected from existing settlements, and anthropopressure in coastal zones – threaten the spatial order and require intervention through integrated spatial planning.

In 2019, the **National Strategy for Regional Development 2030** was adopted. The main assumption of the document is the effective use of the internal potentials of territories and their specializations to achieve sustainable development of the country, which will create conditions for the growth of incomes of Polish residents while achieving cohesion in the social, economic, environmental and spatial dimensions. The main objective of regional policy is implemented based on three complementary specific objectives: a) increasing the cohesion of the country's development in the social, economic, environmental and spatial dimensions, b) strengthening regional competitive advantages, c) improving the quality of management and implementation of territorially oriented policies. These actions will result in a more coherent development of regions and an increased level of urbanization, including urban centres.

In 2023, an **Act amending the Act on Spatial Planning and Development and certain other acts** was adopted. The document regulates: a) changes in the regulations concerning building law, environmental protection, and spatial development; b) the organisation of the system of spatial planning acts; c) the limitation of suburbanisation by more precisely regulating decisions
on development conditions and introducing the possibility of a development supplement area; d) support for better use of urbanised areas and investment areas in accordance with the principles of sustainable development; and e) linking planning documents with public and private investment planning to enable more coherent local development. EU influence has been crucial, driving regulatory harmonization and providing financing mechanisms in line with policy priorities. The 2023 Act represents a significant milestone, streamlining planning tools, limiting suburban sprawl and optimizing existing urban areas. This comprehensive and adaptive policy approach underlines Poland's long-term commitment to creating resilient and competitive urban environments.

The evolution of spatial planning and urban development policy in Poland illustrates the continuous adaptation to EU standards and commitment to sustainable development. Key legal acts and strategies have gradually improved the planning framework, improved the management of urban density, influenced the implementation of densification projects and addressed environmental and infrastructure challenges. This evolution reflects Poland's response to both domestic needs and international frameworks. Early reforms prioritized the establishment of spatial order and sustainable development principles, laying the foundation for integrated urban management. Later strategies introduced more advanced urban renewal instruments and compact city models, emphasizing cooperation, efficient land use and coordinated investment planning.

Despite many strategic documents, significant gaps in policy coordination remain. While national strategies such as the National Urban Policy 2030 (NUP2030) advocate territorial integration, they often lack effective enforcement mechanisms. Provincial spatial development plans are often inconsistent with local spatial development plans prepared by municipalities. Furthermore, although Functional Urban Areas (FUAs) are formally recognized, they still lack a solid institutional framework to support integrated spatial planning – especially in rapidly growing peri-urban zones, where coordination challenges are most evident.

## 6.2 The implementation process

In Poland, densification is not a clearly defined goal of spatial policy, but is indirectly implied by spatial planning, revitalization activities and guidelines related to the protection of agricultural land. There are differences in the available tools and methods of their implementation depending on the territorial level and type of area.

Public interventions in densification projects involve legislative, financial, and operational strategies at multiple governance levels. Each category represents a set of tools and approaches designed to manage urban space more efficiently and promote sustainable growth. The nature of individual tools and their importance for implementing densification policy is presented in this section (Table PL10).

<table><thead><tr><td>Tool</td><td>Structures of Implementation</td><td>Time Horizon</td></tr></thead><tbody><tr><td>Local plans of development</td><td>Municipalities introduce local development plans regulating the intensity of development for individual areas. Specific indicators of land development and development shaping</td><td>From 2003</td></tr></tbody></table>
<table><thead><tr><td>Tool</td><td>Structures of Implementation</td><td>Time Horizon</td></tr></thead><tbody><tr><td></td><td>have an impact on the implemented densification projects and investments.<br/>Universal tool applied across all territorial types.</td><td></td></tr><tr><td>Revitalizations programmes</td><td>Revitalization projects are of key importance for degraded areas. Thanks to the Local Revitalization Program, local governments can use urban space more effectively, improving the technical condition of buildings and multifunctionality. Such actions improve the quality of life, influence urban processes and contribute to the revitalization of historical areas. Revitalization projects are often co-financed from EU funds.<br/>Predominantly used in medium and large urban centres. Less prevalent in rural municipalities due to limited administrative capacity and fewer degraded zones.</td><td>From 2015</td></tr><tr><td>The Apartment Plus ['Mieszkanie Plus']</td><td>This program focuses on building apartments for rent at moderate prices, particularly aimed at low- and middle-income groups. It supports the creation of affordable housing in urban areas, mainly on city centres.<br/>Targeted mostly at urban/metropolitan contexts.</td><td>2016-2019</td></tr><tr><td>Special Housing Act</td><td>The special housing act, known as "lex developer", became an effective tool for cooperation between city authorities and developers. It was intended to simplify and speed up the implementation of housing investments in areas that, according to the Local Spatial Development Plans (MPZP), were designated for another purpose - e.g. industrial or service. For investors, the most valuable areas are those in cities, which contributed to an increase in the number of investments in larger cities in areas that had not been developed until then.<br/>Mainly implemented in larger cities, where market demand is strong, and land is scarce. Limited applicability in rural areas.</td><td>2018-2025</td></tr><tr><td>National Urban Policy 2030</td><td>It is the key document at the national level shaping the vision and directions of urban development in Poland. The challenges in NUP are primarily taking care of spatial order and leveling the processes of chaotic suburbanization.<br/>Conceptually relevant to all settlement types, but implementation varies.</td><td>2022-2030</td></tr><tr><td>Supplementary Development Area</td><td>This area is designated in the General Plans of Communes according to a strictly defined procedure, based on an analysis of the existing development. In practice, the concept of the development supplementation area is based on the intensification of construction within already partially developed zones, instead of expansion onto green or agricultural areas. The designation of such an area must be</td><td>From 2023</td></tr></tbody></table>
<table><caption>Table PL10. Tools used in development of compaction densification projects in Poland</caption><thead><tr><td>Tool</td><td>Structures of Implementation</td><td>Time Horizon</td></tr></thead><tbody><tr><td></td><td>supported by an urban analysis that demonstrates the spatial and economic justification for the investment - primarily through location in the vicinity of existing development. This area cannot include areas devoid of appropriate types of development or be spatially separated from the designated zone. Any changes to its area are verified at the stage of preparing the draft plan, and exceeding certain parameters prevents the creation of the project. This approach supports planning oriented towards intensification, not expansion, and promotes more efficient use of existing infrastructure.<br/>Universal tool applied across all territorial types. Targeted at medium-sized and growing suburban municipalities where infill development is more feasible.</td><td></td></tr><tr><td>Downtown Development Area</td><td>The Downtown Development Area is a special type of area designated in the General Plan of the Commune, corresponding to the city center or other high-intensity areas. Its purpose is to support compact, intensive development of development by using more flexible planning parameters that favor investment and reurbanization. The designation of this area is associated with lower standard requirements for biologically active area, the possibility of increasing the intensity of development and simplified technical standards.<br/>The Downtown Development Area is used primarily in large and medium-sized cities.</td><td>From 2023</td></tr><tr><td>Urban Development Agreements</td><td>Urban development agreements are a tool for regulating the relationship between the investor and the commune in the case of investments implemented under Integrated Investment Plans - a new form of local plans, prepared at the investor's request. They are a mandatory civil law agreement, concluded before adoption and specifying, among other things, the scope of public investments (e.g. construction of roads, schools, technical networks), the investor's obligations in terms of their implementation or co-financing, as well as deadlines for completion and conditions for withdrawal from the agreement. This instrument replaces the expiring so-called lex developer, offering a more transparent and predictable planning procedure. Urban development agreements allow for balancing public and private interests in the investment process, while at the same time enabling communes to plan social and technical infrastructure more effectively. They can also be a tool for negotiating the implementation of green infrastructure, such as parks, woodlots or retention systems, provided that they are included in the investor's obligations.<br/>Universal tool - Primarily used in urban/metropolitan areas with active development pressure</td><td>From 2023</td></tr></tbody></table>

Source: own elaboration.
**The Act on spatial planning and development** (2003) is the basic legal act concerning spatial development. In 2023, there was a reform of the spatial planning system in Poland, which introduced a new act of local law - the *General Plan of the Commune*, which is developed for the entire commune. This act is an important element in shaping the spatial policy of the commune, dividing the commune into planning zones for which urban standards and access to social infrastructure are determined. It is important that during the reform, the possibility of designating the *Supplementary Development Area and the Downtown Development Area* was also introduced, which is of particular importance in the case of densification projects. Other tools regulated by the Act are:

a) Local spatial development plan - is a planning act that specifies in detail the purpose of land, the principles of its development and the conditions of development. The plan includes functions and purpose of land, building lines (they define the area where a plot can be located), height and dimensions of buildings, protection of green areas, cultural heritage objects and the environment. In Poland, in 2023, local spatial development plans were created for 32.3% of the country's area<fnref n="164" />,

b) *Decision on building conditions* - is a planning instrument used in the absence of a local spatial development plan, which specifies the parameters for the planned building (mainly for residential buildings) and land development. It allows for the implementation of the investment while meeting specific conditions in relation to the existing neighbourhood,

c) *Permission for special public investment* - serves to determine the conditions for locating investments related to the implementation of public purposes, and its issuance is associated with the determination of technical and environmental conditions.

Each of these tools plays an important role in the spatial planning system, enabling the balancing of private and public interests and ensuring control over urbanisation processes and development density, while protecting the environment and cultural heritage.

**The Act on Building Law** (1994) is a fundamental regulation in Poland governing construction activities, including urban densification projects. It provides a framework for the design, construction, and maintenance of buildings, setting procedures for obtaining permits and defining technical and safety standards. Recent amendments have simplified permitting processes for smaller housing units and mixed-use developments, accelerating urban densification while aligning with EU sustainable building directives. The Act specifies requirements like building height, setbacks, and land use, influencing the feasibility of high-density projects. Together with related decrees, it ensures compliance with energy efficiency, safety, and sustainable design standards, promoting the quality and safety of urban environments.

**The Decree of the Minister of Infrastructure on the technical conditions** (2002) to be met by buildings and their location is one of the most critical legal regulations in Poland governing construction standards. It establishes detailed requirements for the safety, functionality and location of buildings to ensure the orderly development of construction. This regulation plays a key role in densification policy, influencing the way new developments integrate with existing

<footnote n="164">¹⁶⁴ https://bdl.stat.gov.pl/ [Last accessed on 20.01.2025]</footnote>
urban environments, in terms of the daytime sunlight of apartments, as well as specifies minimum distances between buildings and plot boundaries, streets, and neighbouring structures. Updates to this regulation are often due to technological progress, changes in urban policy or adaptation to EU directives on sustainable construction and energy efficiency.

**The Act on Revitalization** (2015) plays a key role in projects targeting the renewal and reconstruction of urban areas. It provides a legal framework for comprehensive revitalization actions aimed at improving the quality of urban spaces, enhancing city functionality, and addressing socio-economic issues in degraded areas. The Act establishes clear guidelines for the preparation and implementation of local revitalization programs, often incorporating densification strategies. By focusing on degraded urban areas, revitalization projects can increase urban density by transforming old industrial, railway, or brownfield sites into residential or mixed-use spaces (Stangel, 2013). The Act supports public-private partnerships (PPPs) and fosters collaboration between public authorities, private investors, and local communities, while also aligning with EU-funded regeneration programs focused on sustainable urban development. It enables municipalities to provide financial incentives and subsidies for revitalization actions consistent with densification objectives, integrating effectively with broader planning regulations, building codes, and national urban policy goals.

**The Act on facilitating the preparation and implementation of housing investments and accompanying investments** (2018), known as the "special housing act", significantly influenced densification processes in Polish cities by simplifying and accelerating procedures for constructing new apartments. It facilitated housing projects on previously unregulated areas, including post-industrial and abandoned urban spaces, making less attractive locations more desirable for developers. These investments improved city aesthetics, revitalized neglected areas, and increased service availability in city centres. The act supported the intensification of urban development, particularly through multi-family housing projects (Szlachetko et al., 2021). Initially set to remain in force until 2028, the act has been replaced by new spatial planning tools, such as urban planning agreements and Integrated Investment Plans, as part of broader reforms. These new tools aim to continue supporting urban densification and sustainable city development.

## 6.3 Size and role of the market

The market framework of densification involves interactions between planning systems, private sector actors, and market-based mechanisms. The degree to which purely market-based interventions dominate densification efforts depends on the legal, economic, and social context of a given city or commune. Depending on the specifics of the project and local conditions, project can be financed in various models.

In Poland, property law is strongly protected by the Constitution and other regulations, which means that densification of buildings requires the consent of the owners. However, in the centres of large cities, there is fragmentation of ownership, which makes it difficult to implement larger densification projects. This often requires lengthy negotiations or land purchases by investors.
The real estate market mechanism and densification projects can be implemented using practices:

- Local authorities develop local spatial development plans, setting development limits and intensification,

- Local governments issue decisions on development conditions in places without local spatial development plans, which provides great flexibility but also leads to chaotic development,

- Urban development agreements – as part of the spatial planning reform, the urban planning agreement tool was introduced – an agreement between the commune and the investor that allows for the expansion of public infrastructure (e.g. schools, greenery, communication) as part of a private investment. Many cities still lack examples of signed and implemented agreements – the tool is new and requires refinement of procedures. Cities fear legal conflicts and difficulties in enforcing conditions. The urban planning agreement can counteract the negative effects of densification by including investors in the costs of social infrastructure, but it provides an opportunity for better integration of housing development with public services – if it is effectively implemented,

- Commercial investments in public-private partnership (PPP) – this is a formula thanks to which local governments and other public entities can implement investments. Commercial investors see the opportunity to generate profits by developing plots of land in central locations. It allows for the effective delivery of public services, based on the infrastructure created as part of the project.

In Poland, densification processes are most often initiated by the real estate market, not by a coherent, long-term planning policy. They are particularly visible in the largest cities, where the increase in land value stimulates investment pressure. Market dominance is balanced by the participation of local governments and public funds.

Over the last two decades, the real estate market in Poland has undergone significant changes, closely linked to the processes of gentrification and densification of development, which is particularly visible in large cities.

Gentrification is visible in Warsaw, Łódź and Gdańsk, among others. This phenomenon leads to changes in their character, social structure and local infrastructure. Investments in revitalization and development of infrastructure play a key role here, but this process often results in an increase in real estate prices and living costs, leading to the displacement of previous residents with lower incomes (Jakóbczyk-Gryszkiewicz et al., 2017).

Densification of development is another trend in Polish cities. It particularly concerns estates built in previous decades, which are subject to modernization and densification. The aim of these activities is to use urban space more effectively, but without proper planning they can disrupt the original urban layout and social ties. These processes are part of broader urban changes in Central and Eastern Europe. Research shows that the pace and nature of gentrification depend not only on globalization and liberalization of the economy, but also on local conditions - historical development and state policy. In post-communist cities/countries, the so-called gentrification of newly built housing estates often occurs, which differs from
classic gentrification. This is a specific mechanism driving the growth of real estate values and profits on the housing market, closely linked to the development of financial and credit markets. State actions are of key importance in this process (Holm et al., 2015).

The development of the real estate market in Poland is strongly linked to the financial situation. The increase in the availability of mortgage loans in 2004-2008, driven by low interest rates and the liberalization of the banking sector, contributed to the dynamic growth of housing prices. The financial crisis in 2008 caused a slowdown, but in 2014-2020 a strong increase in real estate prices was noted again, which was the effect of, among others: low interest rate policy, which increased the availability of mortgage loans, foreign investment and speculative purchases of real estate, development of the rental market, including the so-called "flipping" of apartments, i.e. their quick purchase, renovation and sale at a profit (Adamkiewicz, 2016; Czerniak et al., 2021).

In the Polish context, urban regeneration processes are increasingly shaped by the strong influence of private investors, especially developers who play a key role in defining development priorities and shaping urban space. Urban development is no longer understood as a process of rebuilding local potential and adapting to new civilization challenges but is increasingly becoming a mechanism for "reclaiming" land with high investment potential (Markowski, 2023). The strong position of developers on the housing market translates into a significant influence on shaping spatial policy and densification processes. Through relations with political parties and participation in legislative work on spatial planning and development, the developer lobby often pushes for solutions that facilitate investment. As a result, planned changes to regulations may limit the tools for protecting the public interest and reduce the availability of housing due to cooperation with banks.

Market-led densification in Poland exerts influence on national legislation through well-organized developer, that advocate for streamlined administrative decisions and reduced regulatory constraints. These groups fund research and commission policy papers urging amendments to spatial planning law, framing looser regulations as necessary to alleviate Poland's persistent housing shortage. In turn, Poland adopted these proposals, enacting lex specialis laws that relax zoning and procedural requirements, often bypassing detailed local spatial plans. Consequently, Poland's spatial-planning framework increasingly reflects market-led priorities, tilting the balance of power toward developers at the expense of local comprehensive planning (Havel, 2022; Havel & Zaborowski, 2025; Polanska, 2014).

The processes of gentrification, densification of buildings and financial policy interpenetrate each other, influencing the shape of the real estate market in Poland. On the one hand, they support the modernization of cities and the growth of real estate values, but on the other hand, they lead to an increase in the cost of living and speculation on the housing market. State policy, including regulations on loans, the rental market and spatial planning, will be of key importance in the coming years.

6.4 The multilevel governance process

The governance of densification policy in Poland involves a complex, multi-level framework, in which roles and resources are shared between national, regional and local levels. These levels
coordinate different strategies, with potential trade-offs between densification and housing availability. The nature of densification processes in Poland reflects interactions between authorities as well as different stakeholders, including private investors, citizens and urban planners. Policy management is carried out by different actors who have specific goals at different levels and types (Table PL11).

<table><thead><tr><td>Actor</td><td>Type</td><td>Level</td><td>Roles</td><td>Effects</td><td>Coordination Dynamics</td></tr></thead><tbody><tr><td>Ministry of Development and Technology</td><td>Public</td><td>National</td><td>Regulations of policy frames.</td><td>Initiated major spatial planning reform in 2023, enabling better land-use planning and densification.</td><td>Often poorly coordinated with sectoral ministries. Top-down approach with limited feedback from local level.</td></tr><tr><td>Voivodeships Offices</td><td>Public</td><td>Regional</td><td>Develops regional spatial development plans.</td><td>Limited influence on densification due to weak enforcement of regional plans.</td><td>Weak vertical coordination with municipalities.</td></tr><tr><td>Local authorities</td><td>Public</td><td>Local</td><td>Responsibility for local urban planning - determination of development conditions and preparation of local spatial documents<br>Implementation of housing strategies, public space projects, and implementation of infrastructural investments.</td><td>Direct impact on urban planning, development conditions, and investment approval; local tax revenues; public-private partnerships (PPP); and urban development agreements</td><td>Often under pressure from developers; dependent on fiscal income from property tax.</td></tr><tr><td>Social housing managers</td><td>Public</td><td>Local</td><td>Management of social housing projects and municipal housing resources.</td><td>Implemented limited densification in degraded areas (e.g. via SIMs), but small-scale and underfunded.</td><td>Weak integration with spatial planning; lack of long-term coordination with private developers or regeneration programmes.</td></tr><tr><td>Private developers</td><td>Private</td><td>National/ Regional/ Local</td><td>Invest in residential and commercial real estate projects.</td><td>Strong driver of high-density housing (e.g. in Warsaw's Wola). Prioritize profit over urban quality and affordability.</td><td>Often dominate local planning processes; exert influence via land ownership and lobbying. Conflict</td></tr></tbody></table>
<table><caption>Table PL11. Actors involved in densification governance in Poland</caption><thead><tr><td>Actor</td><td>Type</td><td>Level</td><td>Roles</td><td>Effects</td><td>Coordination Dynamics</td></tr></thead><tbody><tr><td></td><td></td><td></td><td></td><td></td><td>with social housing goals.</td></tr><tr><td>Banks and financial institutes</td><td>Private</td><td>National/ Regional/ Local</td><td>Provide financing for construction and buyers.</td><td>Support densification by financing large residential projects.</td><td>Aligned with developers; no strong coordination with public policy goals (e.g. affordable housing).</td></tr><tr><td>NGOs</td><td>Civil Society</td><td>Local</td><td>Monitor policy impacts and lobby for inclusive urban policies.</td><td>Active in bigger cities like Warsaw (Miasto Jest Nasze); lobby against over-densification and gentrification.</td><td>Often in conflict with developers or passive municipalities. Limited formal role but increasing visibility.</td></tr><tr><td>Citizens and local communities</td><td>Civil Society</td><td>Local</td><td>Participate in public consultations.</td><td>Protest against high-density projects; low trust in planning system.</td><td>Often excluded from real influence; participation frequently symbolic. Conflictual relations with both public and private actors.</td></tr></tbody></table>

Source: own elaboration.

Multilevel governance of densification strategies in Poland aims to balance economic, environmental and social priorities. However, the tensions between financial benefits for key players and compact urban growth require careful coordination of policies and cooperation between actors at all levels.

Horizontal governance involves collaboration among municipalities, sectors, or stakeholders at the same administrative level to ensure cohesive planning and resource sharing. In practice, densification in Poland is challenged by weak vertical integration, national goals promoting compact development are not always supported by local land-use plans or administrative capacity. For example, some municipalities continue issuing permits for scattered housing despite national policies advocating for containment of sprawl. Meanwhile, horizontal coordination is limited.
## 6.5 Achievements, assessments, and challenges

Among the main achievements of densification in Poland are the reform of the spatial planning system in 2023, which implemented new regulations supporting densification projects. The adoption of the **National Urban Policy 2030** focused on addressing problems with inefficient use of urban spaces and proposing programs to reduce issues in cities. Additionally, revitalization projects have been implemented in post-railway and post-industrial areas in degraded parts of cities, supporting the renewal of urban spaces by creating multifunctional areas that enhance the quality of life and functionality (Table PL12).

<table><thead><tr><td>Impact area</td><td>Measured Impacts</td><td>Potential impacts</td></tr></thead><tbody><tr><td>Efficient use of space</td><td>Rational use of already built-up urban areas through the revitalization of degraded post-industrial areas.<br>Examples: New Center of Łódź, revitalization of post-mining areas in Katowice</td><td>The National Urban Policy encourages the efficient use of urban land, helping to maximize space in already developed urban areas through the strategies contained in this document.<br>Regeneration projects aim to reuse abandoned or underutilized land, promoting a more efficient urban layout.</td></tr><tr><td>Multifunctionality</td><td>Examples of revitalization of the post-shipyard areas show that spaces combining housing, services and recreation are being created there.<br>Examples: "Young City" [Młode miasto] – revitalization of approx. 73 ha of post-shipyard areas in Gdańsk</td><td>Regeneration of post-industrial and post-rail areas focuses on creating multifunctional spaces with improved quality of life.</td></tr><tr><td>Quality of life</td><td>As a result of densification projects with multi-family housing and services in cities, access to housing, work and public spaces in city centres has improved<br>Examples: Powiśle Power Plant [Elektrownia Powiśle] in Warsaw, Fusion Complex in Łódź</td><td>Densification through mixed-use development can improve the quality of life in city centres by offering better access to housing, jobs, public spaces and amenities.</td></tr><tr><td>Increasing financialization</td><td>The "Apartment Plus", "Apartment for Young" and other programmes have led to an increase in the number of rental apartments targeted at middle- and low-income groups as a result of increased investment pressure.<br>Results: A total of 3,468 premises were built in 18 cities, most of them in Katowice (513) and Kraków (481)<fnref n="165" />.</td><td>The Apartment Plus ["Mieszkanie Plus"] project aims to increase the number of apartments for rent at moderate rents, focusing on low- and middle-income groups.<br>The reform of the spatial planning system encourages higher-density development on public land, potentially improving affordability through new opportunities for financing and implementing public investments.</td></tr><tr><td>Green space availability</td><td>Urban Policy points to the need for better management of urban spaces, which can be seen, for example, in projects to revitalize parks and create green public spaces in many Polish cities.</td><td>The National Urban Policy proposes better management of urban spaces, encouraging a balance between green areas and development zones.</td></tr></tbody></table>

<footnote n="165">¹⁶⁵ https://bank.pl/mieszkanie-plus-ile-udalo-sie-wybudowac-przez-7-lat/ [Last access on: 03.06.2025]</footnote>
<table><caption>Table PL12. Impacts of densification policies on housing inequalities in Poland</caption><thead><tr><td>Impact area</td><td>Measured Impacts</td><td>Potential impacts</td></tr></thead><tbody><tr><td></td><td></td><td>Revitalization projects include greening urban spaces, mitigating the loss of public green areas in degraded zones.</td></tr></tbody></table>

Source: own elaboration.

Densification policies in Poland, as elsewhere, present both opportunities and challenges. Measured effects show that densification has improved the quality of space but also led to higher housing prices and reduced green areas. Potential future effects suggest that densification may either mitigate or exacerbate housing inequalities, depending on how policies are designed and implemented. In recent years, growing disparities in access to and affordability of housing have prompted policymakers in Poland to seek remedies that promote greater spatial and social equity. While market-driven development has dominated urban development since the early 1990s (Ogrodowczyk & Marcińczak, 2021), several public policy instruments have emerged to counteract its exclusionary effects. These policies aim to moderate land speculation, expand access to affordable housing, and ensure more efficient urban regeneration (Table PL13).

<table><caption>Table PL13. Policies and tools to correct housing inequalities in Poland</caption><thead><tr><td>Instrument</td><td>Type</td><td>Description</td><td>Potential for Reducing Inequality</td></tr></thead><tbody><tr><td>TBS (Social Housing Associations)</td><td>Social rental housing</td><td>Public-private model delivering below-market rental units for middle-income groups.</td><td>Moderate to high – offers tenure stability for non-wealthy households.</td></tr><tr><td>Housing Cooperatives (pilot initiatives)</td><td>Cooperative housing</td><td>Community-based models offering shared ownership or long-term leases.</td><td>High, if legal and financial barriers are addressed.</td></tr><tr><td>Municipal revitalization programs</td><td>Integrated urban policy</td><td>EU-funded revitalization combining building upgrades with social services.</td><td>Moderate – needs strong social safeguards to protect vulnerable residents.</td></tr><tr><td>SIM (Social Housing Initiatives)</td><td>Public-Private Partnerships</td><td>Affordable housing developments on public land led by local governments and BGK.</td><td>High – good potential if kept affordable and insulated from market pressures.</td></tr><tr><td>Local plan of developments</td><td>Land Use Regulation</td><td>Local land of developments that set development rules, limit building intensity, and protect public spaces.</td><td>Can support spatial equity if used to protect affordable areas and promote mixed-income neighbourhoods.</td></tr><tr><td>Land Value Capture [Oplata Planistyczna]</td><td>Fiscal Tool</td><td>Captures part of increased land value after zoning changes for public reinvestment.</td><td>High if revenues are used for affordable housing or community facilities.</td></tr></tbody></table>

Source: own elaboration.
Although the housing system in Poland is still largely based on market mechanisms, selected public policies, such as social housing programmes, cooperative initiatives and regulatory tools, show the potential to mitigate spatial and socio-economic inequalities. However, to ensure that these reforms effectively balance the goals of density with housing affordability and social integration, careful planning and ongoing coordination at local, regional, and national levels will be necessary.

Densification in rural Poland is a promising but under-implemented approach to sustainable rural development. While national strategies promote more compact rural settlement forms, structural barriers, such as weak planning capacity, fragmented land ownership, and demographic decline, limit practical achievements. In many rural areas, especially in eastern and northern Poland, population decline results in vacant or underused buildings, making densification less urgent or economically viable. For densification to succeed, targeted incentives, enhanced local planning capacity, and community engagement are essential.

# 7 Summary and discussion of results

## 7.1 Summary of changes in EEP

Environmental and energy policies (EEPs) in Poland have evolved significantly in recent years, driven by EU directives, environmental concerns, and energy security goals. Initially focused on meeting EU energy targets, Poland has gradually shifted toward more comprehensive policies aimed at reducing carbon emissions and improving energy efficiency across residential, industrial, and public sectors.

The changes introduced from 2016 by the *Act on energy efficiency* are aimed at optimizing energy consumption and improving conditions for the development of new energy services. They are therefore consistent with the assumptions of climate and energy policy. Environmental objectives and projected energy deficits related to the growing demand for energy in Poland translate into the need to both optimize energy consumption and introduce measures aimed at maximizing energy savings. The new regulations allow obligated entities to implement non-repayable subsidy programs to co-finance projects involving the connection of end users to the heating network or the replacement of heat sources. This solution also speeds up the process of modernizing individual heat sources.

In Poland, around 10% of the population consists of energy-poor households that are unable to properly heat and light their homes or use electrical appliances. The most common causes of energy poverty include low energy efficiency of buildings and heating systems, high energy costs, and low incomes (Sokołowski & Frankowski, 2021).

The Polish energy sector is undergoing a significant and dynamic transformation. There is a noticeable disparity between the expectations of stakeholders, current industry practices, and regulatory requirements, highlighting the challenges and complexities of this transition. Poland shall update its energy efficiency policies for the residential building sector and increase all relevant stakeholders' preparedness. The *Directive on the energy performance of*
*buildings* recast in 2024 promotes equal access to financing for energy-poor citizens and social housing while considering affordability (Attia et al., 2022).

Key changes include the introduction of programs like "Clean Air" to subsidize building retrofits, stricter energy performance standards for new constructions, and expanded use of renewable energy sources. Poland has serious international obligations in the field of environmental protection, including combating climate change and limiting emissions of pollutants that can travel long distances into the air, which require it to systematically and significantly reduce emissions of carbon dioxide, nitrogen oxides, dust and other substances characteristic of energy using fossil fuel resources.

Due to the *Energy Policy of Poland until 2040 (2021)* in 2040, more than half of the installed capacity will be zero-emission sources. A special role in this process will be played by the implementation of offshore wind energy into the Polish power system and the launch of a nuclear power plant. In parallel to large-scale energy, distributed and civic energy will develop – based on local capital. The transformation also requires increasing the use of renewable energy technologies in heat generation and increasing the use of alternative fuels in transport, also through the development of electromobility and hydromobility.

In Poland, economic factors such as the availability of EU funding and national subsidies (e.g., the Clean Air Programme) significantly shape the design and implementation of EEPs, often prioritizing cost-effectiveness over social equity. Normative influences, including growing public awareness of air pollution and climate change, have increased pressure on policymakers to adopt greener solutions, although uptake remains uneven across regions. Institutionally, a fragmented governance system, where responsibilities are split between national ministries and under-resourced local governments, often hampers coherent policy execution. Contextual factors such as the legacy of coal dependence, aging housing stock, and regional disparities further complicate the local adaptation of national EEPs. As a result, while Poland has made progress in formalizing energy efficiency goals, actual outcomes vary widely depending on local capacity, infrastructure, and socio-economic conditions.

The evolution of EEP in Poland has been shaped by complex socio-economic and institutional dynamics, influencing housing inequalities across the country. A delicate balance exists between market forces and institutional interventions within Poland's housing and energy sectors. While the market largely dictates housing supply and demand, public policy tools such as subsidies, grants, and incentive programs aim to mitigate inequalities by making energy efficiency retrofitting more affordable. However, these tools have uneven reach and impact, highlighting ongoing tensions between profit-driven housing provision and socially oriented policy goals.

Local authorities occupy a pivotal position in translating national EEP goals into practice. Nevertheless, their role is constrained by insufficient financial resources, reducing their capacity to effectively address housing inequalities rooted in energy inefficiency. Enhancing empowerment and support for local governments is critical to improving policy outcomes at the ground level. Coordination challenges remain a persistent obstacle. There is often a misalignment between national objectives for energy efficiency and local implementation capacities, compounded by weak integration between energy policies and affordable housing
strategies. These contradictions and sectoral conflicts reduce the effectiveness of both housing and energy programs, particularly when governance structures fail to provide clear coordination mechanisms. While national-level evidence on such conflicts may be limited, local case studies reveal tangible struggles in harmonizing goals.

Spatially, the impact of EEPs and housing policies varies across territorial scales. Urban areas often face rising housing costs linked to retrofitting requirements, potentially exacerbating affordability problems. Conversely, rural areas struggle with limited access to energy efficiency programs and financial support, deepening regional inequalities. More detailed spatial analysis is needed to understand these differential effects fully. In response, Poland has begun adopting corrective and innovative measures aimed at reducing housing inequalities. These include energy performance labeling, targeted retrofitting grants, and programs specifically focused on disadvantaged communities. Despite their promise, these initiatives still face challenges in reaching the most vulnerable groups, particularly low-income households who may lack the resources or knowledge to benefit fully.

In summary, while Poland's EEP landscape reflects growing recognition of the need for energy-efficient and equitable housing, significant gaps persist in balancing economic, institutional, and spatial factors. Strengthening local governance, improving policy coordination, and tailoring interventions to vulnerable populations are essential steps toward achieving more inclusive and effective energy efficiency outcomes in housing.

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

In Poland, the relations and trade-offs between EEP and housing policies are shaped by the need to balance energy efficiency improvements with housing affordability and accessibility. EEPs focus on reducing energy consumption and carbon emissions, often through retrofitting initiatives supported by government programs. The trade-offs arise from the tension between implementing ambitious EEPs and addressing social concerns like energy poverty and housing quality. While retrofitting programs aim to lower long-term energy costs, they often require subsidies or financial incentives to avoid excluding vulnerable populations. Balancing these priorities requires coordinated policies that align energy efficiency goals with broader housing and social welfare objectives.

In Poland housing policies increasingly support the integration of renewable energy technologies like solar panels, heat pumps, and electric vehicle charging stations, aligning with broader EEP goals. Moreover, housing policies intersect with EEPs in addressing energy affordability. Subsidies or incentives for energy efficiency upgrades help households, especially low-income ones, reduce energy bills.

While retrofitting existing settlements to meet EEP goals may be environmentally preferable, it can be more expensive than demolishing, and rebuilding, especially in areas rich in industrial buildings, creating challenges for policymakers balancing costs and sustainability. Subsidies for energy-efficient housing can encourage green development but may distort housing markets, driving up costs in certain areas. Additionally, housing policies focused on expanding supply sometimes prioritize quantity over quality, resulting in energy-inefficient developments
that conflict with EEP goals. Balancing these policies requires coordinated planning to ensure
that energy efficiency improvements do not inadvertently exacerbate housing inequalities.

Improving housing conditions is a necessary condition for a just transformation of the energy sector in Poland. Reducing energy consumption and emissions without losing the quality of living conditions should be the overarching assumption of decarbonizing the economy. It is reasonable to maintain or increase funds earmarked for renovation of municipal housing stock, as well as to provide compensation for higher energy expenditure among the poor (Sokołowski & Frankowski, 2021).
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http://nbs.klodzko.pl/ [Last accessed on 20.01.2025]

https://bdl.stat.gov.pl/ [Last accessed on 20.01.2025]

https://czystepowietrze.gov.pl/ [Last accessed on 28.05.2025]

https://czystepowietrze.gov.pl/inne-programy/stop-smog [Last accessed on 24.01.2025]

https://doradztwo-energetyczne.gov.pl/ [Last accessed on 24.01.2025]

https://mojecieplo.gov.pl/ [Last accessed on 24.01.2025]

https://mojprad.gov.pl/ [Last accessed on 24.01.2025]

https://ozzzprc.pl/2023/11/18/miks-energetyczny-w-polsce-raport/ [Last accessed on 20.01.2025]

https://powietrze.malopolska.pl/baza/jakosc-powietrza-w-polsce-na-tle-unii-europejskiej/
[Last accessed on 25.01.2025]

https://stat.gov.pl/statystyka-regionalna/jednostki-terytorialne/podzial-administracyjny-polski/
[Last accessed on 31.05.2025]

https://www.ecologic.eu/16115 [Last accessed on 10.01.2025]

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https://www.gov.pl/web/klimat/taryfowanie-energii-elektrycznej [Last accessed on 20.01.2025]

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[Last accessed on 2.01.2025]

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10 List of abbreviations

<table><tr><td>AUUs</td><td>Assigned Amount Units</td></tr><tr><td>EEA</td><td>European Economic Area</td></tr><tr><td>EEPs</td><td>Environmental and Energy Policies</td></tr><tr><td>EPBD</td><td>Energy Performance of Buildings Directive</td></tr><tr><td>EPP2040</td><td>Energy Policy of Poland until 2040</td></tr><tr><td>EU</td><td>European Union</td></tr><tr><td>HEMS</td><td>Home Energy Management System</td></tr><tr><td>EMS</td><td>Energy Management System</td></tr><tr><td>ERDF</td><td>European Regional Development Fund</td></tr><tr><td>KP</td><td>Kyoto Protocol</td></tr><tr><td>NBS</td><td>Nature Based Solutions</td></tr><tr><td>NEP2030</td><td>National Environmental Policy 2030</td></tr><tr><td>NFEPWM</td><td>National Fund for Environmental Protection and Water Management</td></tr><tr><td>NUP2023</td><td>National Urban Policy 2023</td></tr><tr><td>NUP2030</td><td>National Urban Policy 2030</td></tr><tr><td>PLN</td><td>Polish Zloty</td></tr><tr><td>PPP</td><td>Public-Private Partnership</td></tr><tr><td>PV</td><td>Photovoltaics</td></tr><tr><td>TPA</td><td>Third Party Access</td></tr><tr><td>UN</td><td>United Nations</td></tr><tr><td>UNFCCC</td><td>United Nations Framework Convention on Climate Change</td></tr></table>
## 11 Annex

<table><thead><tr><th colspan="2">EUROPEAN LEVEL</th></tr></thead><tbody><tr><td>2002</td><td>Energy Performance of Buildings Directive (EPBD)<br><a href="https://eur-lex.europa.eu/eli/dir/2002/91/oj/e ng">https://eur-lex.europa.eu/eli/dir/2002/91/oj/e ng</a></td><td>The 2002 EPBD did not impose common, precise numerical targets.<br><br>It required each Member State to develop a national methodology for calculating the energy performance of buildings.<br><br>It required members states to set national minimum requirements on the energy performance of new buildings and only existing buildings with a total useful floor area over 1000 m² that are undergo major renovation<fnref n="166" />.<br><br>Member States may decide not to set or apply the requirements for the residential buildings (new and existing) which are intended to be used less than four months of the year.</td></tr><tr><td>2010</td><td>EPBD revision<br><a href="https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CEL EX:32010L0031">https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CEL EX:32010L0031</a></td><td>The 2010 EPBD did not impose common, precise numerical targets but it included some changes with respect to the 2002 version.<br><br>It established mandatory national minimum requirements on the energy performance of new buildings and only existing buildings that are undergo major renovation, regardless of their surface area. Mandatory national minimum requirements have to be updated every five years and are set with a view to achieving cost-optimal levels<br><br>Member States shall ensure that: by 31 December 2020, all new buildings are nearly zero-energy buildings; and after 31 December 2018, new buildings occupied and owned by public authorities are nearly zero-energy buildings<br><br>Member States may decide not to set or apply the requirements for "residential buildings which are used or intended to be used for either less than four months of the year or, alternatively, for a limited annual time of use and with an expected energy consumption of less than 25 % of what would be the result of all-year use".</td></tr><tr><td>2012</td><td>Energy Efficiency Directive (EED)<br><a href="https://eur-lex.europa.eu/eli/dir/2012/27/oj/e ng">https://eur-lex.europa.eu/eli/dir/2012/27/oj/e ng</a></td><td>The 2012 EED set out a number of energy efficiency targets, referring not only to the residential or building sector but more broadly to all sectors.</td></tr></tbody></table>

<footnote n="166">¹⁶⁶ According to the Directive: "Major renovations are cases such as those where the total cost of the renovation related to the building shell and/or energy installations such as heating, hot water supply, air-conditioning, ventilation and lighting is higher than 25 % of the value of the building, excluding the value of the land upon which the building is situated, or those where more than 25 % of the building shell undergoes renovation"</footnote>
<table><tr><td></td><td></td><td>The EU aimed to reduce energy consumption by 20% by 2020. Each Member State was required to set indicative national energy efficiency targets.<br/>Member States also had to renovate each year at least 3% of the total floor area of centrally owned public buildings.</td></tr><tr><td>2018</td><td>EPBD revision<br/>https://eur-lex.europa.eu/eli/dir/2018/844/oj/eng</td><td>Each Member State shall establish a long-term renovation strategy to support the renovation of the national stock of residential and non-residential buildings, both public and private, into a highly energy efficient and decarbonised building stock by 2050, facilitating the cost-effective transformation of existing buildings into nearly zero-energy buildings, in particular by an increase in deep renovations.<br/>The long-term renovation strategy shall include indicative milestones for 2030, 2040 and 2050, and specify how they contribute to achieving the Union's energy efficiency targets in accordance with Directive 2012/27/EU.</td></tr><tr><td>2023</td><td>EED revision<br/>https://eur-lex.europa.eu/eli/dir/2023/1791/oj/eng</td><td>2023 EED defines higher targets for energy efficiency and introduces the "Energy-efficient first principle" as a key element, meaning that energy efficiency must be prioritised by member states across all policy and investment decisions<br/>Public bodies at national, regional and local level should fulfil an exemplary role as regards energy efficiency. Each Member State shall ensure that at least 3 % of the total floor area of heated and/or cooled buildings that are owned by public bodies is renovated each year to be transformed into at least nearly zero-energy buildings or zero-emission buildings<br/>Member States shall establish and achieve a share of the required amount of cumulative end-use energy savings among people affected by energy poverty, vulnerable customers, people in low-income households and, where applicable, people living in social housing</td></tr><tr><td>2024</td><td>EPBD revision<br/>https://eur-lex.europa.eu/eli/dir/2024/1275/oj/eng</td><td>2024 EPBD objective is the reduction of greenhouse gas emissions from buildings within the Union, with a view to achieving a zero-emission building stock by 2050<br/>Member States shall establish a national building renovation plans that also includes a roadmap with targets and indicators, including the reduction of the number of people affected by energy poverty.<br/>Member states must implement measures to reduce average primary energy consumption of the national residential building stock by at least 16% compared to 2020</td></tr></table>
<table><tr><td></td><td></td><td>by 2030; and by at least 20-22% compared to 2020 by 2035.<br/>Member States shall ensure that at least 55 % of the decrease in the average primary energy use referred to in the third subparagraph is achieved through the renovation of the 43 % worst-performing residential buildings</td></tr></table>

NATIONAL LEVEL - POLAND

<table><tr><td>2014</td><td>Act on the Energy Performance of Buildings</td><td>It introduces the obligation to issue energy performance certificates for buildings and requirements for energy standards, including nearly zero-energy buildings. It establishes a central register of energy certificates. The aim is to improve the energy efficiency of buildings and reduce CO2 emissions.</td></tr><tr><td>2016</td><td>Act on Energy Efficiency</td><td>It introduces a system of white certificates, which allow entities meeting certain requirements (e.g. conducting an energy audit) to obtain property rights. It supports investments in energy efficiency, improving both economic development and benefits for citizens.</td></tr><tr><td>2019</td><td>National Energy and Climate Plan</td><td>It sets out Poland's goals for reducing greenhouse gas emissions, increasing the share of renewable energy sources and improving energy efficiency by 2030. The plan is the basis for the national climate and energy policy and contains measures to achieve these goals.</td></tr><tr><td>2021</td><td>Energy Policy of Poland until 2040 (EPP2040)</td><td>Long-term strategy defining the directions of Poland's energy transformation, including increasing energy efficiency, developing renewable energy sources and reducing emissions. It indicates actions aimed at adapting the construction and energy sectors to EU requirements.</td></tr></table>
NATIONAL REPORT ON THE REGULATORY SYSTEM OF
EEPs IN SPAIN

1 Executive summary

Spain's retrofitting initiatives have been heavily influenced by EU regulations, particularly the Energy Performance of Buildings Directive (EPBD) and the Energy Efficiency Directive (EED). The introduction of the Technical Building Code (CTE) and Climate Change and Energy Transition Law (2021) set minimum energy performance standards, while programs such as PREE (Programa de Rehabilitación Energética de Edificios) and tax incentives have provided financial support for energy renovations. However, disparities persist in regional implementation, and there is evidence that retrofitting can contribute to gentrification, making housing less affordable for lower-income residents.

Spain's adoption of NBS has evolved through a combination of national legislative frameworks, municipal initiatives, and EU funding. Key regulatory drivers include Law 33/2015 on Natural Heritage and Biodiversity and the National Strategy for Green Infrastructure, Connectivity, and Ecological Restoration (ENIVCRE). Funding is primarily sourced from EU mechanisms such as the European Regional Development Fund (ERDF), Next Generation EU, and LIFE program. Cities like Barcelona and Vitoria-Gasteiz have implemented ambitious greening initiatives, improving biodiversity, reducing the urban heat island effect, and enhancing stormwater management. However, green gentrification has been a growing concern, as these projects often lead to increased property values and displacement of lower-income residents.

Densification policies in Spain have been framed by the Urban Planning Law (2000), the Climate Change and Energy Transition Law (2019), and the Strategic Urban Agenda 2030. These efforts aim to curb urban sprawl, optimize land use, and improve public transit accessibility through transit-oriented developments (TODs) and compact city models. Financial incentives such as tax reductions, public-private partnerships (PPPs), and EU structural funds have been leveraged to promote high-density development. While densification has revitalized urban centers and improved environmental sustainability, challenges include rising property values, socio-economic displacement, and regulatory barriers at regional and municipal levels.

Spain employs a **multilevel governance** framework, with national ministries setting policy objectives, regional governments adapting strategies to local needs, and municipalities implementing projects. However, **fragmentation in governance**, **bureaucratic inefficiencies**, and **uneven regional capacities** have led to inconsistent policy implementation. In addition, while EU funding has been critical for these initiatives, its **distribution has been uneven**, favoring wealthier regions and well-funded municipalities.

Spain has made notable strides in environmental and energy policy through retrofitting, NBS, and densification policies. However, the **social consequences** of these initiatives, particularly
regarding affordability and displacement, require further attention. To enhance policy effectiveness and equity, Spain must improve governance coordination, expand financial support mechanisms for vulnerable populations, and ensure that sustainability efforts do not exacerbate socio-economic inequalities.

## 2 Introduction and methodology

As environmental and energy transitions accelerate under mounting ecological and geopolitical pressure, the question is no longer if transformation will happen – but how, for whom, and at what cost. Spain, like other EU member states, faces binding obligations to decarbonize its building stock, expand green urban infrastructure, and contain urban sprawl. This report aims to trace how climate and environmental policies – often designed at EU or national levels – take shape within the specific institutional, territorial, and housing context of Spain. It looks at how policies travel, adapt, and collide with existing systems of tenure, governance, and inequality.

The report draws on a structured document analysis of Spanish and European energy and environmental policy frameworks, focusing on how these intersect with housing systems. The research approach centers on identifying and interpreting the institutional logics, policy tools, and governance arrangements shaping three core domains – energy retrofitting, nature-based solutions (NBS), and urban densification.

The analysis draws on official documents across multiple levels, including EU directives (e.g., EPBD, EED), national frameworks (e.g., NECP 2021-2030, Climate Change and Energy Transition Law, CTE and Royal Decrees), and municipal strategies (e.g., Barcelona's Nature Plan, Valencia's Smart City strategy). These were complemented by implementation guidelines (such as PREE criteria and IDAE reports), as well as selected academic literature and civil society publications.

To supplement the document analysis, the research also incorporated qualitative data from 10 semi-structured expert interviews (see table 1) and one multi-stakeholder policy lab (see table 2). Interviews were conducted with professionals from public administration, housing agencies, NGOs, and research institutions, each lasting approximately one hour. Interviews were recorded, transcribed, and analyzed using an open coding process to identify emerging themes aligned with the five framing dimensions. The policy lab brought together actors from government, academia, and civil society to discuss barriers and enablers to climate-oriented housing policy, and provided insights into the dynamics of implementation, collaboration, and contestation at the urban level.

The analysis followed a qualitative thematic approach (Clarke & Braun, 2014; Bowen 2006) guided by five framing dimensions – the policy cycle, implementation mechanisms, market dynamics, multilevel governance, and socio-spatial impacts. Documents were read and annotated to identify how institutional actors, tools, and funding aligned with these dimensions, drawing on principles of document analysis and interpretive policy research (Yanow, 2000). timelines were constructed to trace the institutionalization of policies and their transposition from EU to national and local levels. Descriptive quantitative data (e.g., energy savings targets,
investment levels, housing stock characteristics) were used to support interpretation, but no formal modelling was undertaken. The document-based approach allows for a detailed mapping of institutional developments and policy instruments. However, the analysis is limited by the uneven availability of disaggregated socio-economic data, particularly at the regional and local levels.

This mixed-method approach enabled a grounded understanding of institutional developments, while also bringing in the perspectives of stakeholders involved in policy design and implementation. However, the analysis remains limited by the small number of interviews and regional scope of the policy lab, which may not capture the diversity of experiences across Spain. Findings are therefore interpretive and exploratory, but enriched by direct insights into institutional dynamics, coordination challenges, and on-the-ground realities.

<table><caption>Table ES1. Information of interviewees for semi-structured interviews.</caption><thead><tr><td>Institution Represented</td><td>Date and place</td><td>Time and duration of interview</td></tr></thead><tbody><tr><td>Ecodes - Fundación Ecología y Desarrollo</td><td>7th March 2025,</td><td>16h00, 1 hour 45 minutes</td></tr><tr><td>Instituto de Investigación Tecnológica, Universidad Pontificia Comillas</td><td>26th March, 2025</td><td>12h00, 1 hour</td></tr><tr><td>Alianza contra la Pobreza Energética</td><td>2nd April, 2025</td><td>16h30, 1 hour</td></tr><tr><td>Ecoserveis</td><td>16th April 2025,</td><td>12h30, 1 hour</td></tr><tr><td>Generalitat de Catalunya, Departament de Drets Socials i inclusió, Programa de suport a l'abordatge integral de la pobresa energética</td><td>16th April, 2025</td><td>10h00, 1 hour</td></tr><tr><td>Institute for Human Rights and Business</td><td>16th April, 2025</td><td>17h00, 1 hour</td></tr><tr><td>Incasól - Institut Català del Sòl</td><td>11th April, 2025</td><td>12h00, 1 hour</td></tr><tr><td>Ajuntament de Barcelona</td><td>11th April, 2025</td><td>10h00, 1 hour</td></tr><tr><td>Plan Estratégico Metropolitano de Barcelona</td><td>25 May, 2025</td><td>13h00, 1 hour</td></tr><tr><td>Diputació Barcelona</td><td>4th June, 2025</td><td>10h00, 1 hour</td></tr></tbody></table>

<table><thead><tr><td>Institution Represented</td></tr></thead><tbody><tr><td>NASUVINSA, empresa pública de suelo industrial, vivienda y cohesión territorial del Gobierno de Navarra</td></tr><tr><td>Instituto Municipal de la Vivienda y Rehabilitación de Barcelona</td></tr><tr><td>Institute for Human Rights and Business</td></tr><tr><td>Plan Estratégico Metropolitano de Barcelona (PEMB)</td></tr><tr><td>Celobert (cooperative)</td></tr></tbody></table>
Hidra, Institut de Recerca Urbana de Barcelona

Incasól - Institut Català del Sòl

asesor del Ministerio de Vivienda y Agenda Urbana (MIVAU)

<caption>Table ES2. Institutions represented in policy lab.</caption>

## 3 General governance system

Spain is a high-income country with a GDP of approximately €1.5 trillion, making it the fourth-largest economy in the European Union. The country has a population of around 47 million, with major urban centers such as Madrid, Barcelona, Valencia, and Seville experiencing rapid growth and housing pressures. Spain's housing market is characterized by high rates of homeownership (around 75%) but significant affordability challenges, particularly in urban areas where rental prices have surged due to demand-driven gentrification and short-term rental markets.

The Spanish governance system is a decentralized parliamentary democracy, where power is distributed across national, regional (autonomous communities), and local levels. The national government, led by the Prime Minister, is responsible for setting overarching policy objectives, particularly in energy efficiency, urban planning, and environmental sustainability. Spain's 17 autonomous communities have significant regulatory control over housing, urban development, and environmental policy, allowing for regionally tailored approaches to retrofitting, NBS, and densification. However, disparities in financial capacity between regions have led to unequal implementation of sustainability initiatives.

At the municipal level, city governments play a critical role in implementing housing retrofitting programs, green infrastructure projects, and urban density strategies. However, bureaucratic inefficiencies, governance fragmentation, and limited financial resources in some municipalities have hindered policy effectiveness. EU funding mechanisms, including the European Regional Development Fund (ERDF) and NextGenerationEU, have played a crucial role in supporting urban sustainability projects but have also been criticized for favoring wealthier, better-connected cities over smaller, economically weaker regions.

<table><thead><tr><td>Governance Level</td><td>Housing Policy</td><td>Retrofitting</td><td>Densification</td><td>Nature-Based Solutions (NBS)</td></tr></thead><tbody><tr><td>EU</td><td>Sets broad principles on housing rights (via social policy), provides funding (e.g., NextGenEU), but housing policy largely national.</td><td>Defines binding energy performance directives (EPBD, EED), co-finances retrofitting (e.g., ERDF, RRF).</td><td>Provides urban planning frameworks through cohesion policy; promotes compact cities via Green Deal.</td><td>Drives NBS via biodiversity strategies, Urban Greening Plans, and funding mechanisms (e.g., Horizon Europe).</td></tr><tr><td>National (Spain)</td><td>Defines legal housing frameworks (Ley de Vivienda), finances programs (e.g., Plan Estatal de Vivienda), sets rental subsidies.</td><td>Implements EU directives through Royal Decrees, manages PREE &amp; NextGenEU funding, sets technical standards (CTE).</td><td>Coordinates national planning strategy (e.g., Urban Agenda), enables tax and zoning tools, guides TOD.</td><td>Sets national climate goals (e.g., NECP, PNACC), funds NBS through urban regeneration programs.</td></tr></tbody></table>
<table><caption>Table ES3. Governance competencies summary table (Spain)</caption><tr><td>Regional (Autonomous Communities)</td><td>Manage housing stock, co-design housing programs with central gov, administer subsidies.</td><td>Adapt national frameworks to local context, administer retrofitting grants (PREE), engage technical staff.</td><td>Coordinate regional land-use planning, apply zoning incentives, support TOD via regional mobility strategies.</td><td>Support green space design in urban plans, align with biodiversity strategies, fund local green infrastructure.</td></tr><tr><td>Local (Municipalities)</td><td>Implement and manage public housing, issue building permits, enforce housing standards, collaborate with CSOs.</td><td>Coordinate applications for retrofitting, provide technical assistance to residents, run municipal schemes.</td><td>Issue local zoning plans, develop urban redevelopment projects, coordinate PPPs.</td><td>Design and maintain parks, green roofs, street trees; engage community in co-design; pilot Superblocks.</td></tr></table>

## 4 Housing retrofitting

This section outlines the evolution of Spain's housing retrofitting policy, driven largely by EU directives such as the EPBD and EED. It traces a clear policy timeline and examines the layered implementation process, including financial instruments like PREE and tax incentives, regulatory mechanisms such as the Technical Building Code (CTE), and support tools like one-stop shops. The section also explores the role of multilevel governance and public-private partnerships in driving retrofitting, while acknowledging uneven market engagement and regional disparities. While the overall ambition has increased, especially since the NECP 2021–2030 and the post-COVID recovery plan, implementation remains uneven across regions and housing tenures. Wealthier autonomous communities and municipalities with stronger technical and institutional capacity have benefited more from funding and program access, while others face barriers to uptake. Retrofitting policies in Spain reflect both an expanding environmental agenda and persistent socio-territorial inequalities in how support is delivered and who receives it.

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

Spain's approach to building energy efficiency and retrofitting has evolved through a series of national policies and the transposition of European Union (EU) directives. Below is a timeline, followed by a table, highlighting key milestones, actors, documents, and the influence of EU interventions on Spain's policy development in this area.
<figure><img src="image_88.png" /><figcaption>Figure ES1: timeline illustrating key policies and regulations in Spain (bottom part) and EU (upper part) affecting housing retrofitting (in red)</figcaption></figure>

<table><thead><tr><td>YEAR</td><td>MILESTONE / EVENT</td><td>ACTORS</td><td>KEY DOCUMENTS</td><td>EU INFLUENCE</td></tr></thead><tbody><tr><td>2002</td><td>Adoption of the Energy Performance of Buildings Directive (EPBD) 2002/91/EC</td><td>EU</td><td>EPBD 2002/91/ec</td><td>Initiated EU-wide standards for building energy performance</td></tr><tr><td>2006</td><td>Implementation of the Technical Building Code (Código Técnico de la Edificación - CTE)</td><td>Spanish Government</td><td>Royal decree 314/2006</td><td>Transposed EPBD 2002/91/EC into national law, setting energy efficiency standards for new and renovated buildings.</td></tr><tr><td>2010</td><td>Recast of the EPBD (Directive 2010/31/EU)</td><td>EU</td><td>EPBD 2010/31/EU</td><td>Strengthened requirements for nearly zero-energy buildings and cost-optimal levels.</td></tr><tr><td>2013</td><td>Transposition of the Energy Efficiency Directive (EED) 2012/27/EU</td><td>Spanish government</td><td>Law 15/2013</td><td>Established measures to achieve energy savings across sectors, including buildings.</td></tr><tr><td>2014</td><td>Submission of the National Energy Efficiency Action Plan 2014-2020</td><td>Spanish government</td><td>National Energy Efficiency Action Plan 2014-2020</td><td>Outlined strategies to meet EU energy efficiency targets, focusing on building renovations.</td></tr><tr><td>2018</td><td>Amendment of the EPBD (Directive 2018/844/EU)</td><td>EU</td><td>EPBD 2018/844/EU</td><td>Emphasized long-term renovation strategies and smart</td></tr></tbody></table>
<table><caption>Table ES4. Table summarizing EU regulations transposed at national level (retrofit)</caption><tr><td>2020</td><td>Approval of the Integrated National Energy and Climate Plan (NECP) 2021-2030</td><td>Spanish government</td><td>NECP 2021-2030</td><td>Set national targets for energy efficiency and building renovations in line with EU goals.</td></tr><tr><td>2021</td><td>Enactment of the Climate Change and Energy Transition Law</td><td>Spanish Government</td><td>Law 7/2021</td><td>Aimed for carbon neutrality by 2050, with specific measures for building energy efficiency.</td></tr><tr><td>2023</td><td>Publication of the revised Energy Efficiency (Directive 2023/1791) (EU)</td><td>EU</td><td>EED 2023/1791</td><td>Raised the EU's energy efficiency target, requiring member states to achieve an additional 11.7% reduction in energy consumption by 2030.</td></tr><tr><td>2024</td><td>Spain's updated National Energy and Climate Plan</td><td>Spanish Government</td><td>Updated NECP 2024</td><td>Increased targets for green hydrogen production and energy storage, reflecting ongoing commitment to EU energy efficiency objectives.</td></tr></table>

While national legislation defines the core regulatory framework, many implementation responsibilities—especially for grant programs like PREE—are delegated to Spain's autonomous communities. This decentralization has led to notable regional variation in uptake, administrative capacity, and retrofit outcomes (Agencia de l'Habitatge de Catalunya, n.d.; Ajuntament de Barcelona, n.d.).

The adoption of the Energy Performance of Buildings Directive (EPBD) 2002/91/EC by the European Union in 2002 marked a significant milestone in the drive to improve the energy performance of buildings across Europe. The directive required Member States to set minimum energy performance standards for new and existing buildings, laying the groundwork for future legislation aimed at reducing the carbon footprint of buildings and aligning with broader EU sustainability goals (European Parliament, 2000). In Spain, the EU's EPBD influenced the development of national legislation, notably through Royal Decree 314/2006, which set energy performance standards for buildings. This was Spain's direct response to EU-level pressures, marking the beginning of a strategic shift towards energy efficiency in buildings. The EU influence was strong, ensuring that energy-saving measures were integrated across Member States, creating a common framework for energy performance standards. A prime example of the directive's impact was seen in Spain's early energy efficiency renovations in public
buildings, where energy assessments and retrofitting measures were implemented to comply
with the new regulations, improving insulation, heating, and cooling systems.

In 2006, Spain's government implemented the Technical Building Code (CTE), a national initiative heavily influenced by the EU's EPBD. This code set energy efficiency standards for new buildings and major renovations, ensuring that energy conservation measures were incorporated into the design, construction, and operation of buildings (BOE, 2021). The Spanish government adapted the EU framework to suit national needs, introducing detailed requirements for building insulation, heating, ventilation, and air conditioning systems. The CTE influenced various urban projects across Spain, particularly in Madrid and Barcelona, where new housing projects adhered to these energy performance standards, ensuring more sustainable development in line with EU guidelines (Ajuntament de Barcelona, n.d.).

The recast of the EPBD (Directive 2010/31/EU) in 2010 introduced stronger measures, including nearly zero-energy buildings (nZEB) and cost-optimal levels for energy efficiency in buildings. It required Member States to ensure that new buildings were nearly zero-energy by 2020, a directive that placed additional pressure on Spain to enhance its energy efficiency standards for both new constructions and renovations (European Parliament, 2020). Spain transposed these strengthened requirements into national legislation, particularly through updates to the CTE, further improving energy efficiency and the integration of renewable energy systems. This recast of the directive not only reinforced the EU's commitment to a greener future but also accelerated Spain's efforts toward achieving carbon neutrality.

In 2013, the Energy Efficiency Directive (EED) 2012/27/EU was transposed into Spanish law through Law 15/2013. The directive aimed to reduce energy consumption across all sectors by 20% by 2020, with a specific focus on improving energy efficiency in buildings. Spain's national energy efficiency action plan was shaped by this directive, outlining a clear strategy for retrofitting existing buildings and improving energy performance standards for new constructions. The EED influenced Spain's building sector by encouraging long-term energy savings, through measures such as the adoption of more energy-efficient heating systems, better insulation, and more sustainable energy sources. This included urban projects in Madrid and Seville, where old buildings were renovated to meet energy-saving requirements set out in the law. These measures applied not only to residential buildings but also to commercial and industrial sectors, ensuring widespread improvements in energy efficiency across various types of infrastructure.

In 2014, Spain submitted its National Energy Efficiency Action Plan (NEEAP) 2014-2020, detailing strategies to meet the EU's energy efficiency targets. This plan focused on reducing energy consumption in buildings, especially in the residential and public sectors, through targeted renovation programs and the introduction of new energy performance standards. The plan incorporated the guidelines provided by the EED, which influenced Spain's national policies on energy-saving measures in buildings. It also provided incentives for private sector retrofitting initiatives, helping Spain meet its ambitious energy-saving goals.

In 2020, Spain approved its Integrated National Energy and Climate Plan (NECP), aligning
with the EU's Green Deal and the broader European climate and energy strategy. The NECP
2021-2030 set ambitious energy efficiency targets for Spain, including a 39% reduction in
energy consumption by 2030. This plan aimed to ensure that Spain's building sector was aligned with the EU's climate and energy goals by promoting energy-efficient renovations and integrating renewable energy systems into the building stock. The Spanish government's adoption of the NECP was a direct response to EU climate strategies and reinforced Spain's commitment to sustainability. Cities like Seville implemented renovation projects in line with the NECP, ensuring that both public and private buildings met the new energy efficiency standards.

The Climate Change and Energy Transition Law enacted by the Spanish government in 2021 reinforced these objectives, aiming for carbon neutrality by 2050. This law included specific measures for improving energy efficiency in buildings, especially in the context of renovations and the integration of renewable energy. It was heavily influenced by EU policies, such as the Green Deal and previous directives, particularly the EPBD and the EED. This law not only reflected Spain's commitment to the EU's energy and climate goals but also set national objectives for reducing the carbon footprint of the building sector. Real-world applications of the law were seen in Madrid, where public housing was retrofitted with renewable energy sources, energy-efficient technologies, and enhanced insulation to reduce carbon emissions and meet national and EU climate targets.

The revised Energy Efficiency Directive (EED 2023/1791) published by the EU in 2023 raised the energy efficiency target, requiring Member States to achieve an additional 11.7% reduction in energy consumption by 2030. While Spain is still adapting its policies to align with this revised directive, it signals the continued evolution of EU energy efficiency goals, pushing Spain to update its strategies and regulations to meet these more ambitious targets. As part of Spain's ongoing commitment to EU climate strategies, it will likely enhance its renovation efforts and energy performance standards to ensure compliance with the revised EED.

While retrofit policy in Spain is primarily structured around national frameworks such as PREE, it includes limited dedicated provisions for the public or social housing sector. Public housing represents a small portion of Spain's overall housing stock – having risen from only 2.5% to 3.4% according to the Minister for Housing and Urban Agenda, Isabel Rodriguez (La Moncloa, 2025) – and most retrofit incentives target privately owned dwellings or homeowners associations. Some regional and municipal actors – such as INCASOL in Catalonia or EMVS in Madrid – do implemented retrofit programs in public housing, but these efforts are not uniformly distributed and often depend on regional capacity, local priorities, and EU funding opportunities.

## 4.2 The implementation process

Spain's implementation of building energy efficiency policies has involved a multifaceted approach, incorporating legislative measures, financial incentives, and supportive programs. This process has been characterized by various tools, implementation structures, timelines, beneficiaries, territorial considerations, deadlines, and assessment mechanisms. Furthermore, this journey has encountered frictions, experiments, controversies, and conflicts as the country navigates its path toward a more sustainable building sector.
Regulatory tools

A central legislative tool driving Spain's building retrofit strategy is the **Climate Change and Energy Transition Law (Law 7/2021)**. This law establishes ambitious targets for carbon neutrality by 2050 and emphasizes the critical role of improving energy efficiency in the building sector. In practice, the law requires substantial investments in energy-saving measures and promotes the use of renewable energy sources within the built environment. The Spanish government has increasingly sought to align national laws with broader European Union goals, ensuring that energy retrofits are not just an internal policy focus but part of Spain's broader contribution to the EU Green Deal.

The Technical Building Code (CTE), established in 2006 and updated periodically, sets minimum energy performance standards for new and renovated buildings. This code enforces stringent guidelines on improving energy efficiency through insulation, heating systems, and the integration of renewable energy technologies. Over the years, these regulations have driven the construction of energy-efficient buildings and encouraged the retrofit of existing structures, aligning Spain's built environment with EU standards.

The Integrated National Energy and Climate Plan (NECP) 2021-2030 provides a decade-long roadmap for Spain's energy efficiency goals, including detailed strategies for building energy retrofitting. Regular assessment mechanisms are employed to monitor progress toward energy efficiency targets. These assessments include data collection and performance reviews to gauge the success of energy retrofitting projects and identify areas where further efforts are needed. Such reviews, primarily conducted by national bodies such as the Ministry for the Ecological Transition and Demographic Challenge (MITECO), the Spanish Office for Climate Change (OECC), the Institute for Energy Diversification and Saving (IDEA), and the National Statistics Institute (INE), have been particularly useful in adjusting policies to address emerging challenges and ensuring that Spain remains on track to meet its carbon neutrality targets.

Spain has also introduced extensive training and certification programs to ensure that professionals in the building sector are equipped with the skills necessary for implementing energy-efficient renovations. These programs focus on the latest energy-saving technologies, construction techniques, and the regulatory requirements set forth in the CTE and the Climate Change and Energy Transition Law. By certifying energy performance and ensuring that building professionals adhere to these standards, Spain is creating a skilled workforce capable of driving the energy efficiency agenda. One example of this is the growing demand for BREEAM and LEED certified professionals, who are increasingly sought after to ensure that retrofitting projects meet both energy and environmental standards.

<table><thead><tr><td>Tool / Regulation</td><td>Type</td><td>Level</td><td>Objective</td></tr></thead><tbody><tr><td>EPBD 2002/91/EC</td><td>EU Directive</td><td>EU</td><td>Establish minimum energy performance standards</td></tr></tbody></table>
<table><caption>Table ES5. Key Regulatory Tools</caption><tr><td>Royal Decree 314/2006 (CTE)</td><td>National Code</td><td>National</td><td>Set national building energy standards</td></tr><tr><td>EPBD 2010/31/EU (Recast)</td><td>EU Directive</td><td>EU</td><td>Mandate nearly zero-energy buildings (nZEB)</td></tr><tr><td>Law 15/2013</td><td>National Law</td><td>National</td><td>Transposition of Energy Efficiency Directive (EED)</td></tr><tr><td>NECP 2021-2030</td><td>National Strategy</td><td>National</td><td>Align energy/climate actions with EU Green Deal</td></tr><tr><td>Law 7/2021</td><td>National Law</td><td>National</td><td>Establish long-term decarbonization goals</td></tr><tr><td>EED 2023/1791</td><td>EU Directive</td><td>EU</td><td>Raise efficiency target (11.7%) by 2030</td></tr><tr><td>Updated NECP 2024</td><td>National Strategy</td><td>National</td><td>Expand on renovation/digital energy management targets</td></tr></table>

Financial tools

For instance, the **FREE (Programa de Rehabilitación Energética de Edificios) program**, which offers subsidies for energy renovation projects, has been instrumental in advancing retrofits across Spain. Co-funded by both national and EU funds, the program specifically targets residential and commercial buildings, providing financial incentives for property owners to undertake energy-efficient renovations. This initiative is particularly significant in areas with aging housing stocks, such as Barcelona and Madrid, where retrofitting efforts aim to reduce energy consumption while improving the overall comfort and sustainability of buildings. The FREE program reflects Spain's commitment to EU policies, demonstrating a clear alignment with the EU's objectives of achieving carbon neutrality and reducing energy consumption in the building sector.

Alongside direct financial support, **tax incentives** also play a critical role in encouraging building owners to invest in energy efficiency improvements. These tax deductions incentivize both private and public sector actors to undertake energy-saving renovations, further driving the energy retrofit agenda. In cities like Madrid, where the real estate market is dynamic, developers are encouraged to retrofit existing buildings to meet contemporary energy performance standards, leveraging tax benefits that lower renovation costs. These incentives help make energy-efficient retrofitting more attractive, particularly in an urban market
characterized by rising property values and limited space for new construction. However, critics point out that these tax incentives may disproportionately benefit wealthier property owners and developers, exacerbating inequalities if low-income communities lack the necessary capital to take advantage of these incentives.

**Regional initiatives**, particularly those driven by autonomous communities, further enhance the scope and impact of retrofitting efforts. In regions like Asturias, regional governments have established their own **subsidy programs** tailored to local needs, targeting energy efficiency improvements in both residential and commercial buildings. These regional initiatives are vital in addressing specific local challenges, such as housing inequalities and regional climate goals, while supporting national energy efficiency targets. Moreover, the decentralization of such programs allows for more effective and localized implementation, ensuring that subsidies reach areas where energy poverty and housing inequalities are most pressing.

**EU funding mechanisms**, such as the **European Regional Development Fund (ERDF) and NextGenerationEU**, have played a crucial role in supporting Spain's retrofitting initiatives, co-financing renovation projects and providing additional financial stability. These EU funds have been pivotal in assisting municipalities and regional governments to undertake large-scale energy retrofitting efforts, further reinforcing Spain's alignment with EU goals. However, critics argue that the distribution of these funds has not always been equitable, with wealthier regions often receiving a larger share, leaving poorer areas with fewer resources to invest in energy-efficient building renovations (Venner et al., 2024). As one respondent notes, who works as a regional implementation consultant, "muchos tecnicos de ayuntamientos pequenos ni se enteran de cuando salen las convocatorias," highlighting a procedural failure of communication between levels of government leading to a gap in knowledge-sharing and coordination.

<table><thead><tr><td>Program / Tool</td><td>Type</td><td>Year Created</td><td>Funding Size</td><td>Level</td><td>Target / Purpose</td></tr></thead><tbody><tr><td>PREE</td><td>National subsidy (EU-funded)</td><td>2020</td><td>€300M per call</td><td>National (via regions)</td><td>Retrofit 1.2M dwellings by 2030; building envelope and thermal systems</td></tr><tr><td>PREE 5000</td><td>National / EU-funded</td><td>2021</td><td>€50M</td><td>Small municipalities (&lt;5,000 residents)</td><td>≥75% cost coverage for rural renovations; support in depopulated areas</td></tr><tr><td>NextGenEU – Component 2 (PRTR Housing)</td><td>EU Recovery Mechanism</td><td>2021</td><td>€6.8B (housing/urban)</td><td>National regional</td><td>Renovate 1.2–1.4M dwellings; improve energy efficiency and comfort</td></tr></tbody></table>
<table><caption>Table ES6. Key Financial Tools</caption><tr><td>DUS 5000</td><td>National / EU-funded</td><td>2021</td><td>€75M</td><td>Local</td><td>Support sustainable urban regeneration in small municipalities</td></tr><tr><td>IRPF Tax Deduction</td><td>National tax incentive</td><td>2021</td><td>Variable (individual-based)</td><td>National</td><td>20-60% deduction for retrofit works achieving target energy savings</td></tr></table>

## Support and information tools

To ensure the retrofitting process is as efficient as possible, Spain has established **one-stop shops**—dedicated centers where property owners can access **guidance, technical assistance, and information about available financial support**. These hubs aim to streamline the complex process of retrofitting by offering a centralized service for advice and funding applications. These one-stop shops have been essential in simplifying the retrofit process, making it more accessible to property owners and speeding up the uptake of energy-efficient renovation (Biere-Arenas and Marmolejo-Duarte, 2023).

Spain has also introduced **extensive training and certification programs** to ensure that professionals in the building sector are equipped with the skills necessary for implementing energy-efficient renovations. These programs focus on the latest energy-saving technologies, construction techniques, and the regulatory requirements set forth in the **CTE and the Climate Change and Energy Transition Law**. By certifying energy performance and ensuring that building professionals adhere to these standards, Spain is creating a skilled workforce capable of driving the energy efficiency agenda.

Another significant challenge is **public awareness and engagement with retrofit programs**. Despite the existence of robust financial support schemes and incentive programs, participation in these initiatives has often been lower than expected. This issue is compounded by a lack of outreach and communication strategies to inform property owners about the potential benefits of retrofitting. To overcome this, the Spanish government has launched **public awareness campaigns and information services** aimed at engaging citizens and encouraging greater participation in energy-saving programs since 2017. Nonetheless, ensuring broad public participation remains a critical challenge for Spain's retrofit strategy, as many homeowners are still unfamiliar with the process or may perceive the investment as too costly.

Regular **assessment mechanisms** are employed to monitor progress toward energy efficiency targets. These assessments include **data collection and performance reviews** to gauge the success of energy retrofitting projects and identify areas where further efforts are needed. Such reviews, primarily conducted by national bodies such as the **Ministry for the Ecological Transition and Demographic Challenge (MITECO)**, the **Spanish Office for Climate Change (OECC)**, the **Institute for Energy Diversification and Saving (IDEA)**, and
the National Statistics Institute (INE), have been particularly useful in adjusting policies to address emerging challenges and ensuring that Spain remains on track to meet its carbon neutrality targets.

<table><caption>Table ES7. Support and Information Tools for energy retrofit</caption><thead><tr><td>Initiative / Platform</td><td>Level</td><td>Role</td><td>Target Group</td></tr></thead><tbody><tr><td>Barcelona One-Stop Shop (Oficina de la Rehabilitació)</td><td>Municipal</td><td>Provide residents technical guidance and contractor access</td><td>Homeowners and homeowner associations</td></tr><tr><td>Municipal Technical Offices (various cities)</td><td>Municipal</td><td>Offer in-person assistance on subsidy access and eligibility</td><td>Citizens seeking retrofit support</td></tr><tr><td>National Housing Portal (Ministerio de Vivienda)</td><td>National</td><td>Centralized platform for policy info and funding opportunities</td><td>General public and applicants</td></tr><tr><td>Local Public Awareness Campaigns</td><td>Municipal / Regional</td><td>Disseminate info on energy retrofitting, rights, and support</td><td>Low-income and vulnerable residents</td></tr></tbody></table>

## 4.3 Size and role of the market

Spain's retrofitting market operates within a complex framework shaped by a blend of regulatory frameworks, financial mechanisms, and market-based interventions that collectively aim to enhance energy efficiency in buildings. This multi-faceted approach involves a combination of government-driven policies and private sector initiatives, providing a diverse array of tools and mechanisms to support the renovation of existing buildings and the promotion of energy-efficient technologies. Key elements of Spain's retrofitting market include **energy price regulation**, **financial support mechanisms**, and **market-based interventions** that encourage private sector participation and innovation.

In most cases, energy retrofitting works are delivered by **small and medium-sized enterprises (SMEs)**, typically local construction firms, installers, and energy service companies contracted by homeowners or building communities. The retrofit market remains **highly fragmented**, with uneven capacity across regions and no centralized delivery structure. This leads to variability in costs, timelines, and technical quality. While large firms occasionally lead public projects, **most renovation efforts rely on small-scale providers** working under time-limited aid schemes or local tender processes.
The Energy Service Companies (ESCOs) form a material part of the retrofit market in Spain, embedded within a broader €3 billion European ESCO sector generated through performance-based contracts. While Spain does not dominate this space, national assessments note a small but growing network of ESCOs providing retrofit services—particularly in the public sector and multi-unit buildings. However, data transparency on contract volume, firm capacity, and measurable energy outcomes remains limited (UNEP-DTU 2019).

In principle, ESCOs in Spain operate under the Energy Performance Contracting (EPC) model: they conduct energy audits, finance upgrades, and implement renovation works in exchange for a share of energy savings over time. This structure reduces upfront costs for clients while aligning incentives with long-term efficiency gains. Yet in practice, challenges remain—particularly the lack of standardised contract templates, barriers to third-party finance, and weak monitoring and verification systems (European Commission 2020).

A deeper structural barrier lies in Spain's **housing ownership model**, where a large share of the population lives in multi-unit buildings governed by **homeowners' associations (comunidades de propietarios)**. These associations require a majority or qualified vote to approve renovations, making retrofit decisions slow and politically difficult — especially in buildings with mixed tenure, elderly residents, or financial disparities among owners. This collective governance structure discourages timely action and **complicates the business case** for retrofit companies, who face uncertainty in project approvals and payment timelines.

## Energy price regulation

Energy Price Setting and Obligation Schemes play a key role in shaping the economic environment for retrofitting efforts. Spain's electricity market underwent significant reforms aimed at decoupling gas prices from electricity prices, reducing the volatility of energy costs and facilitating the integration of renewable energy sources. This reform became particularly important in 2022 when Spain and Portugal secured approval from the European Commission to cap gas prices at €50/MWh for one year, mitigating the impact of fluctuating gas prices on electricity costs. This intervention helped stabilize the energy market, making it more predictable for both consumers and companies investing in energy efficiency measures, such as retrofitting.

## Energy obligation schemes

Alongside these reforms, Spain has implemented Energy Obligation Schemes, which require energy companies to meet specific energy savings targets. These obligations compel energy providers to invest in or promote energy-saving measures among consumers, including retrofitting residential and commercial buildings. By requiring energy companies to take responsibility for reducing energy consumption, Spain aligns with EU directives that mandate energy savings across various sectors, including the building sector. This creates a financial incentive for companies to engage in retrofitting initiatives that reduce energy use and promote (urban) sustainability.
Market-based interventions

Market-based interventions complement Spain's regulatory framework and financial incentives. One such mechanism is the Energy Efficiency Certificates (EECs) system, which allows energy providers and other obligated parties to meet their energy-saving targets by purchasing certificates representing verified energy savings. This market-based solution offers flexibility in how energy savings are achieved, incentivizing investment in energy-efficient technologies, including those used in building retrofitting. The EEC system promotes transparency and accountability, encouraging businesses to engage in retrofitting projects that generate verifiable energy savings. This market-driven approach is seen as an effective tool for meeting Spain's ambitious energy efficiency targets, contributing to the overall reduction in energy consumption.

In addition, Public-Private Partnerships (PPPs) have been instrumental in financing and implementing large-scale retrofitting projects in Spain. These collaborations allow the public sector to leverage private sector expertise and capital, driving the renovation of large numbers of buildings while ensuring that energy efficiency targets are met. Spain has seen notable successes in PPPs, particularly in the urban regeneration and retrofitting of old residential areas in cities like Madrid and Barcelona. These partnerships enable municipalities to take on ambitious retrofitting projects while mitigating financial risks, ensuring that both energy savings and social objectives, such as affordable housing, are prioritized.

Public-private collaboration in retrofit delivery remains limited, though some **Autonomous Communities and municipalities** have developed platforms or programs that engage private actors. For example, **Barcelona's “One-Stop Shop” (Oficina de la Rehabilitació)** offers residents technical assistance and connects them with certified companies, acting as a bridge between public subsidies and market implementation. These types of intermediaries are more common in wealthier regions with greater administrative capacity. However, Spain still lacks a **national strategy to professionalize or coordinate the retrofit market**, and efforts remain uneven and pilot-based rather than systemic.

Despite the importance of market-based interventions, Spain's retrofitting market is still largely driven by government initiatives and regulatory frameworks. Programs like subsidies, tax incentives, and obligation schemes remain dominant, providing the essential financial support and legal framework needed to stimulate energy efficiency improvements. However, the growing role of ESCOs and the introduction of mechanisms like the EEC system indicate a shift towards greater market involvement in Spain's energy efficiency goals.

4.4 The multi-level governance process

Spain's approach to building energy retrofitting is shaped by a multilevel governance framework that involves coordination between national, regional, and local authorities, as well as a diverse range of stakeholders from both the public and private sectors. This collaborative structure is designed to enhance energy efficiency in buildings, promote sustainability, and address the interconnected issues of housing affordability and environmental performance.
At the national level, the Ministry for the Ecological Transition and the Demographic Challenge (MITECO) is the central body responsible for formulating Spain's national energy policies, including those related to building energy retrofitting. MITECO is tasked with the development of strategic plans, most notably the Integrated National Energy and Climate Plan (NECP) 2021-2030, which outlines clear energy efficiency targets and measures for achieving sustainability goals. The NECP plays a critical role in guiding Spain's energy transition by setting a long-term vision for reducing carbon emissions, improving energy performance in buildings, and integrating renewable energy sources.

Alongside MITECO, the Instituto para la Diversificación y Ahorro de la Energía (IDAE), an agency under the ministry, promotes energy efficiency and renewable energy. IDAE's role in supporting building retrofitting is multifaceted, encompassing the provision of technical assistance, funding programs, and public awareness campaigns. Through its financial programs, IDAE facilitates the implementation of retrofitting projects by **offering grants and low-interest loans to homeowners, businesses, and municipalities**. This technical and financial support is essential in making retrofitting projects more accessible, ensuring that energy efficiency measures are adopted at scale. The agency's role extends beyond funding by raising awareness of the benefits of retrofitting and encouraging the widespread adoption of energy-saving practices.

At the regional level, Spain's 17 autonomous communities exercise significant authority over housing and urban development. These regions adapt national policies to meet local needs and manage the allocation of funding for retrofitting programs. For example, Asturias has introduced specific subsidy programs to enhance building energy efficiency, reflecting the region's unique housing stock and climate conditions. Regional authorities also have the flexibility to design programs that address local priorities, such as improving the energy performance of public buildings or incentivizing the renovation of historical structures to meet modern energy efficiency standards. This level of autonomy ensures that retrofitting efforts are tailored to the particular challenges and opportunities of each region, which can vary greatly across Spain.

At the local level, municipalities are the key actors in the implementation of building retrofitting policies. Local governments are responsible for urban planning, issuing building permits, and enforcing energy efficiency regulations. They also play a crucial role in community engagement, ensuring that residents and local stakeholders are informed about available programs and encouraged to participate in retrofitting initiatives. Municipalities often collaborate with regional and national authorities to execute energy efficiency programs, ensuring that local projects align with broader strategic goals set at the national level. Additionally, local authorities often work with developers, energy service companies (ESCOs), and other private sector entities to facilitate retrofitting projects and ensure that building renovations comply with energy performance standards.

Effective coordination among these different levels of governance is critical to the success of Spain's energy retrofitting policies. However, challenges can arise due to overlapping responsibilities and varying regional capacities. For example, while national policies such as the NECP provide overarching frameworks, the regional and local governments often have to adjust these policies to their specific contexts, which can lead to variations in implementation.
These discrepancies can cause inconsistencies in how retrofitting projects are carried out, as local governments might prioritize different objectives or face difficulties in accessing the necessary funding or resources to meet energy efficiency targets.

Moreover, while energy retrofitting and housing affordability are inherently interconnected, policies aimed at improving building energy performance may inadvertently lead to trade-offs. For example, stringent energy efficiency requirements could drive up the cost of renovations, potentially making retrofitting projects unaffordable for low-income households. This situation is particularly evident in older buildings that require extensive renovations to meet modern energy standards. Balancing energy performance goals with affordability is a significant challenge for local governments, which must weigh the environmental benefits of energy-efficient retrofits against the potential economic strain they could place on residents.

The Energy Service Companies (ESCOs), which provide financing, design, and implementation services, are central to the market-based aspects of retrofitting. By offering performance-based contracts, ESCOs help reduce financial risks for property owners, making energy retrofitting more attractive. Similarly, housing associations and financial institutions facilitate community participation and offer the necessary capital for large-scale renovations, aiming for retrofitting projects to be accessible to homeowners and developers alike.

While autonomous communities in Spain have substantial regulatory autonomy over housing and urban development, they remain highly dependent on national funding and EU grants for large-scale retrofitting programs. This financial dependency can sometimes affect the priorities and implementation capacities of regional authorities. For example, regions that are less economically developed may face challenges in securing sufficient funding to carry out energy retrofitting projects at the scale required. At the same time, the allocation of financial resources from national and EU sources often comes with conditions, such as specific energy-saving targets or sustainability criteria, which must be met to qualify for funding. This dynamic can shape the kinds of retrofitting projects that are prioritized in different regions, depending on local financial capabilities and the availability of external funds.

While vertical coordination between EU, national, and subnational authorities forms the backbone of Spain's retrofit governance, horizontal governance relationships are increasingly critical to implementation. Public-private partnerships (PPPs), particularly in cities like Barcelona and Valencia, facilitate collaboration between municipal authorities, private firms (e.g. construction companies, ESCOs), and community-level actors such as homeowners' associations. These horizontal arrangements enable shared financing, bundled procurement, and localized technical assistance. Likewise, collaboration between civil society organizations and local governments—such as ECODES supporting outreach to vulnerable households— illustrates the growing role of civic actors in bridging policy and practice at the neighborhood scale.

<table><thead><tr><td>Actor</td><td>Type</td><td>Role in Governance</td></tr></thead><tbody><tr><td>European Commission (DG ENER, DG CLIMA)</td><td>Public - EU Level</td><td>Sets binding EU directives and funding frameworks for climate and energy policy</td></tr></tbody></table>
<table><caption>Table ES8. Multi-level Governance Actors (Retrofit)</caption><tr><td>Spanish Ministry for the Ecological Transition (MITECO)</td><td>Public - National Level</td><td>Transposes EU policy into national law and oversees national energy strategy</td></tr><tr><td>IDAE (Institute for the Diversification and Saving of Energy)</td><td>Public Agency - National</td><td>Implements funding programs and technical support schemes (e.g. PREE, NECP)</td></tr><tr><td>Regional Governments (e.g., Catalonia, Madrid)</td><td>Public - Regional Level</td><td>Adapts and deploys national policies at the regional level; manages regional funds</td></tr><tr><td>Municipalities (e.g., Barcelona, Valencia)</td><td>Public - Local Level</td><td>Implements retrofit policies locally; often develops pilot programs and PPPs</td></tr><tr><td>ESCOs (Energy Service Companies)</td><td>Private Sector</td><td>Delivers energy retrofits through performance-based contracts (EPCs)</td></tr><tr><td>Construction Firms and Installers</td><td>Private Sector</td><td>Executes renovation works; key players in the retrofit supply chain</td></tr><tr><td>Financial Institutions (e.g., banks, energy credit programs)</td><td>Private Sector</td><td>Provide loans and co-financing mechanisms for energy renovations</td></tr><tr><td>Homeowners Associations (Communities de Propietarios)</td><td>Semi-public/Collective</td><td>Manage collective decision-making in multi-unit housing retrofits</td></tr><tr><td>NGOs and Civil Society (e.g., ECODES, Fundación Renovables)</td><td>Civil Society</td><td>Advocate for equitable energy access; monitor policy implementation</td></tr></table>

<table><thead><tr><td>Governance Level</td><td>Public Actors</td><td>Horizontal (Collaborative) Actors</td></tr></thead><tbody><tr><td>EU</td><td>European Commission (DG ENER, DG CLIMA)</td><td>—</td></tr></tbody></table>
<table><caption>Table ES9. Multilevel and Horizontal Governance of Retrofitting in Spain</caption>
   <tr>
    <td>
     National
    </td>
    <td>
     MITECO, IDAE
    </td>
    <td>
     —
    </td>
   </tr>
   <tr>
    <td>
     Regional
    </td>
    <td>
     Autonomous Communities (e.g. Catalonia)
    </td>
    <td>
     Regional energy agencies, technical consultants
    </td>
   </tr>
   <tr>
    <td>
     Local
    </td>
    <td>
     Municipalities (e.g. Barcelona, Valencia)
    </td>
    <td>
     ESCOs, construction firms, homeowner associations, NGOs
    </td>
   </tr>
  </table>

4.5 Achievements, assessments, and challenges

Spain's building retrofitting initiatives have yielded notable achievements in enhancing energy efficiency and improving housing quality. However, these efforts have also introduced significant challenges, particularly concerning housing inequalities. While retrofitting policies have contributed to the country's broader sustainability and energy goals, they have also raised concerns about affordability, displacement, and unequal access to the benefits of energy-efficient housing. Below is a detailed analysis of the measured and potential impacts of retrofitting policies on housing inequalities.

Retrofitting has led to significant reductions in energy consumption and greenhouse gas emissions. For example, energy renovations in Spanish buildings have been shown to decrease energy consumption by as much as 52% (Serrano-Lanzarote et al. 2017), depending on the specific climate zone and the scope of the renovations. This reduction in energy use contributes not only to Spain's climate goals but also helps residents lower their utility bills. For lower-income households, this can have a particularly beneficial effect, reducing the financial burden of high energy costs and improving their overall quality of life.

One of the most tangible benefits of retrofitting is the improvement in housing quality. Upgraded insulation, modernized heating systems, and improved ventilation significantly elevate living standards. These changes contribute to better indoor comfort, healthier living environments, and better overall health outcomes for residents. For example, energy-efficient renovations in public housing have resulted in more consistent indoor temperatures, reduced mold issues, and better air quality. These upgrades are especially beneficial for vulnerable populations, such as the elderly or those with respiratory conditions, by ensuring that their homes are healthier and more comfortable.

The retrofitting sector has also generated significant economic activity, particularly in construction and related industries. By investing in the renovation of existing buildings, the retrofitting market has created employment opportunities in areas like construction, manufacturing, and energy services. These job opportunities contribute to local economic growth and help reduce unemployment, particularly in areas where retrofitting projects are concentrated. For example, large-scale retrofitting programs in cities like Seville and Madrid
have contributed to job creation in the construction sector, supporting not only skilled labor but also the local economy through increased demand for materials and services.

However, one of the most pressing concerns related to energy-efficient renovations is the potential for gentrification and 'renovictions' (renovation-induced evictions). As buildings are retrofitted and energy efficiency is improved, property values can rise, leading to increased rents. In some cases, this results in the displacement of low-income residents who can no longer afford to live in these newly renovated areas (Bouzarovski et al. 2018). This process exacerbates housing inequalities, as wealthier residents are able to benefit from the improved infrastructure and amenities, while long-time residents are forced out due to rising costs. For instance, in neighborhoods in Madrid and Barcelona where retrofitting has taken place, rising rents have driven lower-income residents to seek housing in more peripheral and less developed areas, contributing to increased socio-economic segregation.

While subsidies and financial incentives for energy-efficient renovations exist, many low-income households struggle to access the necessary financing for retrofitting projects. Although there are programs in place to support renovations, these may not be sufficient to cover the full cost of retrofitting for those with limited financial resources. Additionally, the bureaucratic hurdles associated with accessing such funding can be prohibitive, leaving many low-income residents unable to participate in these programs. This issue limits the ability of disadvantaged communities to benefit from the energy savings and improved living conditions that retrofitting can provide, thereby reinforcing existing inequalities.

Spain's 17 autonomous communities have significant autonomy over the implementation of retrofitting programs, which has led to regional disparities in the availability and scope of these initiatives. While some regions, such as Catalonia and the Basque Country, have made significant progress in rolling out energy efficiency programs, other regions have lagged behind due to a combination of limited funding, political will, and regional priorities. These disparities in retrofitting efforts can lead to geographic inequalities, where some areas benefit from the environmental and economic advantages of retrofitting, while others remain stuck with outdated and inefficient housing.

As the demand for energy-efficient homes grows, there is a risk of creating housing shortages in urban areas. Retrofitted buildings, particularly those in desirable locations, can become scarce commodities as demand outstrips supply, further driving up prices. In high-demand cities like Madrid and Barcelona, this can lead to increased competition for energy-efficient housing, making it more difficult for low-income households to access these improved living spaces. Moreover, while retrofitting increases the quality of housing, the higher costs associated with energy-efficient homes can reduce affordability for vulnerable populations, particularly in the face of urban housing shortages.

All in all, while Spain's retrofitting policies have led to significant progress in energy efficiency, housing quality, and economic stimulus, they also present challenges that must be addressed to avoid exacerbating housing inequalities. Issues such as gentrification, access to funding, regional disparities, and housing shortages highlight the need for more targeted measures to ensure equitable access to the benefits of retrofitting. Moving forward, policies must prioritize social equity by ensuring that the most vulnerable populations benefit from energy-efficient
housing, that funding mechanisms are accessible to low-income households, and that the risk of displacement due to rising rents is mitigated. Additionally, greater coordination across regions and levels of government is essential to ensure that the benefits of retrofitting are distributed more evenly across Spain. By addressing these challenges, Spain can continue to advance its energy efficiency goals while promoting a more inclusive and equitable urban development model.

Access to retrofitting programs in Spain remains uneven across both tenure and income lines. Most incentives — such as PREE — are directed at homeowners or homeowner associations, making it difficult for renters to benefit from improvements to their buildings, reflected initiatives such as the Alianza por una rehabilitación de viviendas sin dejar a nadie atrás (the alliance for the rehabilitation of houses without leaving anyone behind) (Ecodes 2023). As the Ministerio de Vivienda y Agenda Urbana (MIVAU), covering the Efficiency Aid Program for Individual Dwellings within the Recovery Plan (PRTR), states, programs are geared towards homeowners wherein applicants must handle documentation, which can be a barrier for lower-income or elderly households (MIVAU 2024).

Additionally, low-income households often cannot afford the co-financing share required by most retrofit aid programs. Under the national **framework PREE**, subsidies cover only **35% to 45%** of eligible costs, depending on the type of intervention and the efficiency gains achieved. This means that households must contribute between **55% and 65% of the total investment**, often upfront and without guaranteed financing support. For families without access to credit or savings, these requirements represent a substantial barrier to participation in renovation schemes aimed at energy efficiency improvements (IDAE 2024).

Finally, regional differences in administrative capacity and technical readiness lead to unequal access to EU and national retrofit funds. While the overall funding framework is national, each **Comunidad Autónoma** is responsible for implementing its own programs, resulting in **uneven rates of fund absorption**. Wealthier and more administratively capable regions—such as **Catalonia and Madrid**—tend to absorb a larger share of resources, while less developed or rural areas face barriers in matching funds, processing applications, or launching technical assistance. This has created a fragmented retrofit landscape that reinforces existing territorial inequalities (European Commission 2023; IDAE 2023).

<table><thead><tr><td>Impact area</td><td>Measured potential</td><td>or Description/evidence</td></tr></thead><tbody><tr><td>Access by tenure</td><td>Measured</td><td>Retrofit programs primarily target owner-occupied and condominium housing, excluding renters who depend on landlord participation (MIVAU 2024; Interview with NGO representative).</td></tr><tr><td>Affordability of co-financing</td><td>Measured</td><td>Low-income households struggle with required personal investment (often >50% of total cost), limiting their ability to participate in national schemes such as PREE (IDAE 2023; Policy Lab 2025).</td></tr></tbody></table>
<table><caption>Table ES10. Measured and Potential Impacts on Housing Equality (Retrofit)</caption>
   <tr>
    <td>
     Territorial disparities
    </td>
    <td>
     Measured
    </td>
    <td>
     Uneven administrative capacity across regions results in unequal absorption of retrofit funds, disadvantaging rural and lower-income regions (EC 2023; Interview with regional authority).
    </td>
   </tr>
   <tr>
    <td>
     Energy cost burden
    </td>
    <td>
     Measured
    </td>
    <td>
     Energy retrofits lower utility costs long-term, but upfront costs limit access to these savings for vulnerable populations (Interview with local energy agency).
    </td>
   </tr>
   <tr>
    <td>
     Administrative barriers
    </td>
    <td>
     Measured
    </td>
    <td>
     Complex application processes create obstacles for elderly, non-digital users, and immigrants (MIVAU 2024; Field interviews).
    </td>
   </tr>
   <tr>
    <td>
     Opportunities for neighborhood regeneration
    </td>
    <td>
     Potential
    </td>
    <td>
     If well-targeted, retrofitting can be combined with area-based regeneration, particularly in degraded or mono-functional urban neighborhoods (Policy Lab 2025).
    </td>
   </tr>
  </table>

5 Nature-Based Solutions

This section examines Spain's evolving approach to Nature-Based Solutions (NBS), shaped
by a mix of EU policy influence, national legal frameworks, and municipal innovation. Although
"NBS" is not a common term in Spanish law or planning, related concepts such as green
infrastructure, ecological urbanism, and climate adaptation are increasingly embedded in
urban policy. The analysis highlights key milestones, including the 2015 Natural Heritage and
Biodiversity Law and the 2021 ENIVCRE strategy, and explores the diverse implementation
landscape—from EU-funded LIFE projects to city-led green roof programs. Attention is given
to governance structures, the role of NGOs and platforms like FEMP, and funding inequalities
across regions. While NBS projects deliver clear environmental and social benefits, the section
also flags risks of environmental gentrification and uneven access to green amenities.

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

While the term “nature-based solutions” (NBS) has gained traction in EU-level discourse, it is rarely used explicitly in Spanish national or municipal policy. Instead, related terms such as “green infrastructure,” “sustainable urban development,” and “ecological restoration” are more common. In this section, NBS is used as an analytical lens to group and assess a diverse set of interventions that deliver environmental and social co-benefits through nature-based means. Spain’s approach to nature-based solutions (NBS) has evolved through a series of national policies and the transposition of European Union (EU) directives. Below is a timeline highlighting key milestones, actors, documents, and the influence of EU interventions on Spain’s policy development in this area.
<figure><img src="image_89.png" /><figcaption>Figure ES2. Timeline illustrating key policies and regulations in Spain (bottom) and EU (upper) affecting Nature-based Solutions (in green).</figcaption></figure>

<table><thead><tr><td>YEAR</td><td>MILESTONE/EVENT</td><td>ACTORS</td><td>KEY DOCUMENT (short name if possible)</td><td>RELEVANCE TO NBS</td></tr></thead><tbody><tr><td>1992</td><td>Habitat Directive</td><td>EU</td><td>92/43/EEC</td><td>Introduces Natura 2000, supporting habitat preservation crucial for NBS development.</td></tr><tr><td>1992</td><td>Spain ratifies the UN Convention on Biological Diversity</td><td>Spanish Government</td><td></td><td>Aligns Spain with global biodiversity goals, integrating NBS as a biodiversity strategy.</td></tr><tr><td>1999</td><td>The Spanish Strategy for the Conservation and Sustainable Use of Biodiversity</td><td>Spanish Government</td><td></td><td>Outlines national biodiversity conservation, indirectly promoting NBS applications.</td></tr><tr><td>2006</td><td>Biodiversity Action Plan</td><td>EU</td><td></td><td>EU-level biodiversity plan encouraging member states to adopt NBS for ecosystem services.</td></tr><tr><td>2006</td><td>National Plan for Adaptation to Climate Change 2006-2020</td><td>Spanish Government</td><td></td><td>Emphasizes adaptation measures like NBS to address climate impacts.</td></tr><tr><td>2007</td><td>Law on Natural Heritage and Biodiversity</td><td>Spanish Government</td><td>Law 42/2007</td><td>Framework law integrating NBS as tools for biodiversity and natural heritage conservation.</td></tr></tbody></table>
<table>
   <tr>
    <td>2010</td>
    <td>Royal Decree on flood risk assessment and management</td>
    <td>Spanish Government</td>
    <td></td>
    <td>Encourages use of NBS like wetlands and floodplains for managing flood risks.</td>
   </tr>
   <tr>
    <td>2011</td>
    <td>EU Biodiversity Strategy for 2020</td>
    <td>EU</td>
    <td></td>
    <td>Promotes NBS to halt biodiversity loss and improve ecosystem services.</td>
   </tr>
   <tr>
    <td>2011</td>
    <td>Spanish Strategy for Urban and Local Sustainability</td>
    <td>Spanish Government</td>
    <td></td>
    <td>Includes NBS as part of urban sustainability efforts, particularly in green urban planning.</td>
   </tr>
   <tr>
    <td>2011</td>
    <td>Strategic Plan for Natural Heritage and Biodiversity 2011-2017</td>
    <td>Spanish Government</td>
    <td></td>
    <td>Incorporates NBS into strategies for conserving biodiversity and enhancing ecological networks.</td>
   </tr>
   <tr>
    <td>2015</td>
    <td>Modification of the law on Natural Heritage and Biodiversity</td>
    <td>Spanish Government</td>
    <td>Law 33/2015</td>
    <td>Updates legal framework, strengthening NBS relevance in biodiversity protection.</td>
   </tr>
   <tr>
    <td>2016</td>
    <td>Climate Change Adaptation Strategy for the Spanish Coast</td>
    <td>Spanish Government</td>
    <td></td>
    <td>Highlights NBS such as dunes and wetlands for coastal resilience.</td>
   </tr>
   <tr>
    <td>2019</td>
    <td>Spanish Urban Agenda 2030</td>
    <td>Spanish Government</td>
    <td></td>
    <td>Advocates for green urban infrastructure and NBS to enhance urban sustainability.</td>
   </tr>
   <tr>
    <td>2020</td>
    <td>EU Biodiversity Strategy for 2030</td>
    <td>EU</td>
    <td></td>
    <td>Prioritizes NBS as central to restoring ecosystems and increasing biodiversity.</td>
   </tr>
   <tr>
    <td>2020</td>
    <td>Government's Declaration on the climate and environmental emergency</td>
    <td>Spanish Government</td>
    <td></td>
    <td>Commits to integrating NBS to address climate challenges and enhance resilience.</td>
   </tr>
   <tr>
    <td>2021</td>
    <td>National Climate Change Adaptation Plan 2021-2030</td>
    <td>Spanish Government</td>
    <td></td>
    <td>Expands on NBS as a tool for addressing climate risks and promoting resilience.</td>
   </tr>
   <tr>
    <td>2021</td>
    <td>Spain's Climate Change and Energy Transition Act 7/2021</td>
    <td>Spanish Government</td>
    <td>Act 7/2021</td>
    <td>Establishes binding targets for emissions and highlights NBS as part of climate solutions.</td>
   </tr>
   <tr>
    <td>2021</td>
    <td>National Strategy for Greenery Infrastructure and Ecological Connectivity and Restoration (ENIVCRE)</td>
    <td>Spanish Government</td>
    <td></td>
    <td>Defines strategic goals for implementing NBS to improve ecological connectivity and restore degraded ecosystems.</td>
   </tr>
   <tr>
    <td>2021</td>
    <td>Recovery Plan, Transformation and Resilience</td>
    <td>Spanish Government</td>
    <td></td>
    <td>A key instrument for the development of European funds under the Next Generation EU recovery plan.</td>
   </tr>
   <tr>
    <td>2022</td>
    <td>Strategic Health and Environment Plan 2026</td>
    <td>Spanish Government</td>
    <td></td>
    <td>Focuses on integrating health and environmental considerations, including NBS to improve urban</td>
   </tr>
  </table>
<table><caption>Table ES11. Table summarizing EU regulations transposed at national level (NbS)</caption><tr><td>2023</td><td>Strategic Plan for Natural Heritage and Biodiversity 2023-2030</td><td>Spanish Government</td><td>resilience and public health outcomes.<br/>Sets comprehensive goals for conserving biodiversity and enhancing natural heritage, explicitly incorporating NBS for ecological restoration and connectivity.</td></tr><tr><td>2024</td><td>Nature Restoration Law approval</td><td>EU</td><td>Establishes legally binding targets for ecosystem restoration across the EU, promoting widespread adoption of NBS to address climate and biodiversity crises.</td></tr></table>

The EU has been a driver in shaping Spain's policies related to the development of NBS, guiding and influencing national strategies and frameworks. NBS and related terms like green infrastructure (GI) pop up in many of the national environmental policies. They are more frequently explicitly mentioned in guidance documents and non-binding strategies, as compared to binding laws and regulations (Davis et al., 2018). However, an exception is the Spanish Law 33/2015 on Natural Heritage and Biodiversity (Ley del Patrimonio Natural y de la Biodiversidad), which requires mandatory GI strategies both on the national level and for the autonomous regions of Spain (Jefatura del Estado (Gobierno de España), 2015). The National Strategy for Greenery Infrastructure and Ecological Connectivity and Restoration (ENIVCRE) came into force in 2021, significantly impacting regional GI deployment, although many regions had already developed their own strategies beforehand.

After Law 33/2015 mandated the development of GI strategies at both the national and autonomous community levels, the National Strategy for Green Infrastructure, Ecological Connectivity, and Restoration (ENIVCRE) came into force in 2021, requiring regions to develop their own strategies within a maximum period of three years, based on the national strategy. Some autonomous communities developed their own GI strategies before 2021, such as Madrid, Valencia and Catalonia.

In terms of assessment, the implementation of the strategy is divided into work programs. Annual monitoring and reporting are conducted on the current work program, along with triennial evaluation reports for each Work Program until 2050. Additionally, a review of the national strategy is carried out in 2023, as well as mid-term evaluations in 2030 and 2040, and a final evaluation report in 2050 (Ministerio para la Transición Ecológica y el Reto Demográfico, 2021).

The economic downturn following the 2008 financial crisis negatively affected municipalities willingness to invest into NBS (Dorst et al., 2022). This highlights the importance of EU funds for Spain to implement NBS.
A study from 2021 highlights that urban NBS development cases in Spain were marked by relatively limited experience with citizen engagement, although notable differences were observed between cities and city districts. One explanation was the low level of environmental awareness among the public, which often leads to unrealistic expectations regarding the functions and benefits of green spaces (Dorst et al., 2022). Another aspect of low public engagement or participation in such programs or interventions, might be connected to how new green or blue spaces tied to biodiversity, environmental regeneration, health promotion or nature conservation, might be erasing past uses and the identity of places. In other words, the social and cultural aspects of places deemed as suitable for the implementation of NBS might not be considered early on in the process of implementation, with consequences on how residents and social groups engage in such projects.

## 5.2 The implementation process

Spain's implementation of NBS policies has involved a multifaceted approach, with a balanced distribution between legislative measures, financial incentives, and supportive programs. In terms of legislation, the country has implemented environmental and spatial planning regulations to promote NBS, while financial tools have included public procurement of land. Additionally, inter-municipal exchange platforms and educational programs supported the mainstreaming of the protection and creation of NBS (Van Der Jagt et al., 2023). This process has been characterized by various tools, timelines, beneficiaries, territorial considerations, deadlines, and assessment mechanisms, while also not free of socio-political frictions, experiments, controversies, and conflicts. Below is an overview of these aspect of policy implementation around NBS.

### Legislative measures

By transposing EU directives, Spain has enacted national laws to strengthen the role of NBS in regional and urban planning. Law 33/2015, which amended Law 42/2007, incorporated the concept of GI into the Spanish legal system (FEMP, 2019). Law 33/2015 on Natural Heritage and Biodiversity (Ley del Patrimonio Natural y de la Biodiversidad) establishes the foundational legal framework for the conservation, sustainable use, enhancement, and restoration of natural heritage and biodiversity. This law includes tools to promote knowledge and planning of natural heritage and biodiversity, such as the State Strategy for Green Infrastructure, Ecological Connectivity, and Restoration, which requires the autonomous regions of Spain to develop NBS strategies and integrate NBS initiatives within their competencies (Sekulova et al., 2020).

### Financial Support Mechanisms

A 2021 report highlights the absence of a dedicated national budget for NBS in Spain (Dorst et al., 2022). Instead, NBS development relies primarily on local and EU funding sources. Spain has benefited significantly from EU programs including the LIFE and Horizon program and European Regional Development Funds. These programs include specific allocations for NBS, biodiversity conservation, and climate adaptation measures (Fundacion Biodiversidad, 2025b).
Programs like the award of grants by the Biodiversity Foundation (Fundación Biodiversidad)167 were established for projects that contribute to implementing the National Climate Change Adaptation Plan 2021-2030. In the new financing period of 2021-2027, the Biodiversity Foundation (Fundación Biodiversidad) plays at national level, the role of an intermediate body for the European Regional Development Fund (ERDF) with the aim of contributing to the National Strategy for Green Infrastructure, Connectivity and Ecological Restoration (IVCRE), the National Plan for Adaptation to Climate Change, and other important policies to be materialized with transformative interventions in the territory. Its mission includes enacting interventions related to knowledge generation around biodiversity, the promotion of bioeconomy, protecting the marine environment and fomenting sustainability and NBS in urban environments (Fundación Biodiversidad, 2025c).

The foundation is managing two calls for grants directed to municipalities for the renaturalization and resilience of cities within the framework of the Recovery, Transformation and Resilience Plan, financed by the European Union – Next Generation EU. A total of 120 million euros will be allocated in the coming years (Fundación Biodiversidad, 2025b). The grant was distributed between different projects initiated by municipalities with over 50 000 inhabitants across Spain (Fundación Biodiversidad, 2025a). Another call for grants focuses on the restoration of river ecosystems and flood risk reduction in Spanish urban environments, with a commitment to include NBS, amounting to 75 million euros (Fundación Biodiversidad, 2025c).

In some cases, cities were more innovative and proactive in implementing NBS independently of policies and incentives at the national level, which in turn might have led to regional disparities along lines of city size and available budget (Dorst et al., 2022). Many city governments have launched their own subsidy programs to promote NBS. For instance, the Municipality of Barcelona started a program in 2017 to support the establishment of new green roofs in the city. In the second call of the program the competition's ten winning projects received a 75% subsidy on the cost, with a limit of €100,000 per roof. The selected projects included features such as self-sufficient urban allotments, rainwater collection, installations for renewable energy generation, a composting area for organic waste, and the inclusion of relaxation and leisure areas (Ajuntament de Barcelona, 2020).

Supportive Programs and Structures

The first inter-municipal exchange platform promoting NBS in Spain has been the "Local Government Network + Biodiversity", established in 2006. It represents a federation operating under the guidance of the Spanish Federation of Municipalities and Provinces (FEMP), with the aim of adopting and influencing policies, as well as co-developing knowledge related to biodiversity, ecological connectivity, and the restoration of nature in (peri-)urban areas. FEMP has a membership of around 300 municipalities (Red Biodiversidad, 2025; Van Der Jagt et al., 2023). In 2019 the federation developed the "Guide of Municipal Green

<footnote n="167">167 The Biodiversity Foundation (Fundación Biodiversidad) is a public foundation founded in 1998, operates under MITECO (Ministry for Ecological Transition and the Demographic Challenge), with the mission to contribute to reversing biodiversity loss. The foundation is responsible for distributing related EU and national grants and provides financial support.</footnote>
**Infrastructure” handbook** in collaboration with the Association of Green Infrastructure Management Companies (ASEJA) and the Spanish Association of Public Parks and Gardens (AEPJP) (FEMP, 2019). The federation was also a key contributor to the development of the "National Strategy for Green Infrastructure, Connectivity and Ecological Restoration" (Red Biodiversidad, 2025; Van Der Jagt et al., 2023).

In 2019 the **Nature-Based Solutions Working Group (GT-SbN)** was established, co-financed by MITECO (Ministry for the Ecological Transition and the Demographic Challenge) and coordinated by the Conama Foundation (a Spanish, independent, non-profit foundation that promotes open dialogue to foster sustainable development in Spain and Latin America) and the IUCN (International Union for Conservation of Nature) Mediterranean Cooperation Centre. Originating from a session at the 14th National Environmental Congress in 2018, this multidisciplinary group includes professionals from various fields, such as research, governance, and the private sector. The working group aims to promote awareness of the importance and benefits of NBS, foster a network for exchanging knowledge and information on NBS and identify replicable examples of NBS with measurable impacts to encourage their wider adoption. The GT-SbN has also launched an online platform, the **Observatory of NBS in Spain**, which provides tools, bibliographic resources, success stories, and a catalog of innovative projects to support professionals in the field (Fundacion Conama, n.d.; Sekulova et al., 2020).

Although nature-based solutions in Spain are often deployed through municipal urban planning strategies, their design and implementation generally do not explicitly differentiate by tenure (e.g., owner-occupied vs. rental vs. social housing). Publicly led initiatives, such as green corridors, urban gardens, or superblocks, may span across diverse tenure contexts, but tenure is rarely a formal criterion in site selection or investment planning.

Interviews and the policy lab suggested that tenure can indirectly shape the outcomes of NbS. For example, green infrastructure introduced in neighborhoods with high levels of rental housing or socio-economic vulnerability—such as Sant Martí in Barcelona—has sometimes been associated with gentrification pressures. As one planner in Barcelona noted: "Even if the greening is public, the value goes up and that pushes people out—we've seen that in Poblenou and Sant Martí." In contrast, public or cooperative housing projects have more capacity to retain residents and manage public space equitably, enabling a more stable integration of NbS without displacement. One housing official emphasized: "We could do more green interventions in social housing, but it requires coordination. Right now it's mostly happening around market-led regeneration."

While there are isolated examples of NbS in social housing contexts (e.g., roof gardens or shaded courtyards), a systematic tenure-sensitive approach remains absent from most NbS planning in Spain.

<table><thead><tr><td>ELEMENT</td><td>DESCRIPTION</td></tr></thead><tbody><tr><td>Legislative measures</td><td>Law 33/2015 on Natural Heritage and Biodiversity (Ley del Patrimonio Natural y de la Biodiversidad)</td></tr><tr><td>Financial Support</td><td>Award of grants by the Biodiversity Foundation (distribution of ERDF), EU programs (Horizon, Life, Next Generation EU), local subsidy programs</td></tr></tbody></table>
<table><caption>Table ES12. Implementation Process (NbS)</caption>
   <tr>
    <td>
     Supportive programs
    </td>
    <td>
     Local Government Network +Biodiversity, “Guide of Municipal Green Infrastructure” handbook, Nature-Based Solutions Working Group (GT-SbN), “Observatory of NBS in Spain” online platform
    </td>
   </tr>
   <tr>
    <td>
     Time horizon
    </td>
    <td>
     The ENIVCRE requires regions to develop their strategies within three years from approval based on the national strategy
    </td>
   </tr>
   <tr>
    <td>
     Assessment mechanisms
    </td>
    <td>
     Annual monitoring reporting and triennial evaluate reports of the ENIVCRE
    </td>
   </tr>
   <tr>
    <td>
     Challenges and controversies
    </td>
    <td>
     Financial constraints post-2008 crisis, Lack of public environmental awareness and public engagement
    </td>
   </tr>
  </table>

5.3 Size and role of the market

The market for urban NBS development in Spain is expanding, driven by a combination of regulatory frameworks, urban resilience strategies, and the demand for sustainable urban planning. While precise market size figures are not readily available, the role of NBS is gaining prominence.

Although there is an absence of a dedicated national budget for NBS in Spain, large cities like Barcelona and Madrid have been leaders in funding GI projects, integrating them into broader urban development and climate plans (Dorst et al., 2022). For instance, Barcelona's „Nature Plan" and Madrid's „Madrid+Natural" framework have allocated significant municipal resources to expand urban greenery (Ajuntament de Barcelona, 2021; Ayuntamiento de Madrid, 2019). Large public investments in NBS were made in the city of Vitoria-Gasteiz, which was awarded the title of European Green Capital in 2012, partly due to its green belt project (Ayuntamiento de Vitoria-Gasteiz, 2022). Similarly, the city of Valencia received the same award in 2024 for its commitment to restoring natural ecosystems, improving air quality, and providing well-distributed urban green spaces within walking distance for residents (European Commission, 2024).

There is an increasing role for private investments, particularly in real estate developments that incorporate green roofs, green walls, and sustainable urban drainage systems (SUDS) to enhance property value and meet regulatory requirements. Although a study from 2021 highlights the perceived low market demand for NBS further dampened private sector interests; even NBS mainstreaming was not thought to be feasible without private sector contributions because of limited public sector capacity. The limited role of the private sector is explained with the profit- and result- oriented mindset of real estate developments and the perception of NBS as technically risky regarding costs and reputation. The study also highlights that urban NBS are competing with commercial building development in peri-urban areas (Dorst et al., 2022).

Spain significantly relies on EU funding mechanisms to carry out NBS, including the LIFE program, Horizon, the European Regional Development Funds and the Next Generation EU funds that support NBS projects as part of broader goals for sustainable and climate-resilient urban planning (Fundacion Biodiversidad, 2025b).
5.4 The multi-level governance process

Spain's approach to fostering NBS is characterized by a multilevel governance framework involving national, regional, and local authorities, as well as various stakeholders from the public and private sectors. NBS policies in Spain follow a top-down flow, starting at the EU level, where directives and strategies provide overarching frameworks. These are then transposed into national legislation, as laws and policies such as the ENIVCRE. From there, responsibilities and frameworks are passed down to the autonomous communities, which are required to develop their own strategies in alignment with national guidelines. Finally, on the local level provinces, metropolitan areas and municipalities implement these policies through tailored projects and initiatives, ensuring that the broader goals of the EU and national strategies are adapted to local contexts and needs.

At the level of central government, The Ministry for the Ecological Transition and the Demographic Challenge (MITECO) is the primary body responsible for formulating national environmental policies, including those related to NBS. It develops strategic plans, such as the “Spanish Strategy for the Conservation and Sustainable Use of Biological Diversity” and the ENIVCRE. Fundación Biodiversidad is an agency under MITECO, which promotes the conservation, restoration, and sustainable use of biodiversity through funding programs, building alliances and public awareness campaigns.

Spain's 17 autonomous communities have significant authority over urban development. They adapt national policies to regional contexts, manage funding allocations, and implement regional programs to promote NBS. From 2021 every Autonomous Community is required to develop their own GI strategy, however some of them have already developed such a strategy, like Catalonia with the Catalonia Green Infrastructure Program (PIVC) 2017-2021 (Generalitat de Catalunya, 2017).

Provincial Governments (Deputacio) play a coordination role between autonomous
communities and municipalities. They provide technical and financial support to smaller
municipalities that may lack resources to independently implement NBS. Deputations facilitate
regional-level collaboration and ensure that urban greening efforts align with broader regional
goals.

Metropolitan areas, which encompass multiple municipalities, coordinate urban development strategies across municipal boundaries. They ensure that NBS initiatives are integrated into broader metropolitan-scale planning. For example, the Metropolitan Area of Barcelona develops the Metropolitan Urban Master Plan in which (re)naturalization plays an important role (AMB, 2025).

Local municipal governments are responsible for urban planning and building permits. They play a crucial role in implementing NBS projects, enforcing building codes, and facilitating community engagement. For example, the city of Barcelona set a goal to develop 10,67 ha of green areas every year, partly by reclaiming public spaces in dense urban neighbourhoods (Ajuntament de Barcelona, 2021). The city Vitoria-Gasteiz, one of the leading cities in Spain in urban greening, created its GI strategy in 2012 and implemented several NBS projects over time (Climate ADAPT, 2018).
The "Local Government Network + Biodiversity" intermunicipal exchange platform was established in 2006 under the guidance of the Spanish Federation of Municipalities and Provinces (FEMP) and developed the "Guide of Municipal Green Infrastructure" handbook and contributed to the development of the ENIVCRE. The Association of Green Infrastructure Management Companies (ASEJA) and the Spanish Association of Public Parks and Gardens (AEPJP) are Spanish organizations working towards the promotion of NBS (FEMP, 2019). The Conama Foundation, a Spanish NGO that promotes sustainable development in Spain and Latin America, and the IUCN Mediterranean Cooperation Centre are two key non-governmental actors engaged in policy work, advocating for NBS, and coordinating the NBS Working Group (GT-SbN) (Fundacion Conama, n.d.; Sekulova et al., 2020).

A scientific paper from 2021 studying the barriers working against NBS in Spain points out that the main barriers, related to underlying structural conditions in Spain, were for example the limited communication between parties in government and certain lack of flexibility by departmental organizations linked to bureaucracy. The uncertainty and lack of capacity was underlined within local governments to take the lead in sustainability innovations. Although the research highlighted that in many cases the city level was more innovative than the state that time (Dorst et al., 2022). Another study stressed that the national government was seen as lagging behind in providing policy-based support for NBS, especially when compared to certain cities (Van Der Jagt et al., 2023). This changed in 2021 when the ENIVCRE came into force.

<table><thead><tr><td>ACTOR</td><td>TYPE</td><td>LEVEL</td><td>ROLE</td><td>IMPACT</td></tr></thead><tbody><tr><td>Minister (MITECO)</td><td>Public</td><td>National</td><td>Develops national environmental policies and strategic plans.</td><td>Sets overarching goals and frameworks for NBS.</td></tr><tr><td>Biodiversity Foundation</td><td>Public</td><td>National</td><td>Distribution of public funds from the national to the local level.</td><td>Implementation of NBS.</td></tr><tr><td>Autonomous Communities</td><td>Public</td><td>Regional</td><td>Adapt and implement national policies; manage regional programs.</td><td>Ensure policies are tailored to regional contexts.</td></tr><tr><td>Provincial Government (Deputacio)</td><td>Public</td><td>Regional</td><td>Facilitate cooperation between municipalities and manage regional-level services.</td><td>Bridge regional and local efforts for consistent NBS implementation.</td></tr><tr><td>Metropolitan Areas</td><td>Public</td><td>Regional/ Local</td><td>Coordinate urban development strategies across municipalities.</td><td>Integrate NBS into broader metropolitan strategies, ensuring regional cohesion.</td></tr><tr><td>Municipalities</td><td>Public</td><td>Local</td><td>Oversee urban planning, building permits, and local initiatives. NBS in urban areas are mainly initiated by the local municipalities.</td><td>Directly engage with communities and enforce regulations.</td></tr><tr><td>Conama</td><td>NGO</td><td>National</td><td>Conama is a Spanish, Initiator of the GT-SbN, the national</td><td></td></tr></tbody></table>
<table><caption>Table ES13. Key Actors and their Roles (NbS)</caption><tr><td></td><td></td><td></td><td>independent, non-profit foundation that promotes open dialogue to foster sustainable development in Spain and Latin America.</td><td>Nature-based Solutions Working Group</td></tr><tr><td>Non-governmental and Civil Society Organizations</td><td>Non-profit</td><td>National/Regional/Local</td><td>NGOs and networks such as the Local Government Network +Biodiversity, the Association of Green Infrastructure Management Companies (ASEJA) and the Spanish Association of Parks and Public Gardens (AEPJP) advocate for NBS practices and community initiatives.</td><td>Raise awareness and influence policy development.</td></tr><tr><td>Private real-estate developers</td><td>Private</td><td>National/Regional/Local</td><td>Invest in green amenities within real estate developments.</td><td>Drive market-based NBS projects.</td></tr></table>

## 5.5 Achievements, assessments, and challenges

Spain's policy initiatives regarding NBS have contributed to a shift over the last decade, scaling up the implementation of NBS from pilot phase to more broad application on the local level (IUCN, 2019). However, these efforts have also introduced challenges, particularly concerning housing inequalities. Below is an analysis of the measured and potential impacts of NBS on housing inequalities, accompanied by a summary table.

The implementation of NBS in Spanish cities led to the mitigation of urban heat island effect by cooling the environment through shading and evaporation. In recent years, the city of Barcelona implemented a Climate Shelter Program aimed at enhancing climate adaptation. As part of this initiative, NBS like greening, creating chade, green roofs and green walls were developed in many schoolyards (Ajuntament de Barcelona, 2025). NBS projects demonstrated a positive effect on the transition to sustainable stormwater management (SUDS) through reducing surface-runoff and the increase of biodiversity by providing habitats for various urban species, for example in Vitoria-Gasteiz (Climate ADAPT, 2018). NBS in Spain also positively affected the improvement of urban air quality and protected coastal areas. For instance, hybrid dunes in the Barcelona Metropolitan Area protected urban areas from coastal erosion and extreme events (OPERAs, n.d.). However, irrigation and maintenance of green areas are costly in the dry Mediterranean climate.
New green spaces contribute to the improvement of physical and mental health by encouraging active lifestyles, they reduce stress and improve well being by providing access to nature. Urban gardens play an important role in creating spaces for community interaction, fostering stronger social ties and resilience (Camerin & Longato, 2024). For example the city of Barcelona in 2012 started an environmental stewardship program which allows citizens to participate in the creation and maintenance of urban green areas (Ajuntament de Barcelona, n.d.).

The construction and maintenance of new urban green areas requires increasing public investment and employing more workforce which generates employment opportunities and stimulates economic activity (Barseghyan et al., 2023). It also (re)creates areas previously considered degraded or of low aesthetic and recreational value, indirectly boosting the local economy.

However, urban greening can drive up property values and rents, potentially displacing low-income residents. Environmental gentrification is already evident in major cities like Barcelona, which pursue ambitious urban greening policies while facing significant pressure in the property market and a shortage of affordable housing. This process exacerbates housing inequalities by making neighborhoods increasingly unaffordable and/or unwelcoming for long-term residents, either by causing displacement due to increasing rental prices, or by slowly changing the social and business fabric of neighborhoods (Anguelovski et al., 2018).

A 2021 report highlights the absence of a dedicated national budget for NBS in Spain. Instead, NBS development relies primarily on local and EU funding sources (Dorst et al., 2022). Variations in regional policies and funding availability can result in unequal implementation of NBS implementation, with some areas advancing more rapidly than others, for example the municipalities of Vitoria-Gasteiz and Barcelona. At city level, also, low budgets for NBS implementation might mean that more high-income, white and politically powerful neighborhoods are prioritized over others that are more marginalized and ethnically diverse.

Spain's progress in integrating NBS reflects a dynamic interplay between EU directives, national frameworks, and local innovation. At the national level, the enactment of Law 33/2015 marked a significant milestone, requiring the development of national and regional GI strategies. However, many municipalities had already begun developing GI strategies and implementing NBS well before the national GI strategy was introduced in 2021. Despite the absence of a dedicated national budget for NBS, cities such as Barcelona, Madrid, Vitoria-Gasteiz, and Valencia have led urban greening efforts through substantial municipal investments and innovative projects. Spain has heavily relied on EU funds, programs like LIFE, Horizon, ERDF, and Next Generation EU provided crucial financial support to advance these initiatives. The multi-level governance of NBS faces notable challenges, including limited stakeholder communication, bureaucratic inefficiencies, and capacity gaps at the local level. However, innovative cities have often taken the lead, setting ambitious goals and implementing strategies despite these structural barriers. NBS initiatives have yielded many benefits, including urban heat mitigation, enhanced biodiversity, improved air quality, and contributions to climate resilience. Socially, these projects have fostered community engagement, reduced
stress, and promoted public health. However, the implementation of NBS has also highlighted
challenges, particularly concerning housing inequalities. Green gentrification has emerged as
a pressing issue in larger cities, where urban greening efforts often increase property values.

<table><caption>Table ES14. Table Measured and Potential Impacts on Housing Equality (NbS)</caption>
   <thead>
    <tr>
     <td>
      Impact area
     </td>
     <td>
      Measured or potential
     </td>
     <td>
      Description/evidence
     </td>
    </tr>
   </thead>
   <tbody>
    <tr>
     <td>
      Access to green infrastructure
     </td>
     <td>
      Measured
     </td>
     <td>
      Low-income and marginalized communities often lack equitable access to new NbS (e.g., green corridors, urban gardens) which are concentrated in central, high-visibility zones (Eggimann 2022; Interview with CSO).
     </td>
    </tr>
    <tr>
     <td>
      Green gentrification
     </td>
     <td>
      Measured
     </td>
     <td>
      NbS projects in central areas (e.g., Barcelona Superblocks) have increased surrounding housing costs and displaced vulnerable groups (Anguelovski et al., 2023).
     </td>
    </tr>
    <tr>
     <td>
      Uneven implementation
     </td>
     <td>
      Measured
     </td>
     <td>
      Municipal capacity affects NbS rollout; large cities implement more extensive projects than small towns or peri-urban areas (Barcelona, Vitoria-Gasteiz vs. rural municipalities).
     </td>
    </tr>
    <tr>
     <td>
      Disconnection from housing strategy
     </td>
     <td>
      Measured
     </td>
     <td>
      NbS often introduced through environmental planning with little integration with housing affordability policies (Interview with urban planner).
     </td>
    </tr>
    <tr>
     <td>
      Potential for participatory governance
     </td>
     <td>
      Potential
     </td>
     <td>
      Community-led greening initiatives offer avenues for more inclusive outcomes, particularly in smaller-scale interventions (Policy Lab notes).
     </td>
    </tr>
    <tr>
     <td>
      Co-benefits for health and climate
     </td>
     <td>
      Potential
     </td>
     <td>
      Well-targeted NbS improve microclimates, reduce urban heat islands, and support mental health—benefits that could reduce inequality if equitably distributed (Ghosh et al. 2024).
     </td>
    </tr>
   </tbody>
  </table>

6 Densification

This section explores how urban densification has been regulated in Spain over the past two
decades, particularly in the context of climate transition, housing access, and spatial planning
reform. While densification is not always an explicit goal, it is often advanced through
instruments such as zoning updates, infill incentives, and urban regeneration programs.
Spanish cities operate within a multi-tiered legal and planning framework, with regional
governments defining land use regimes and municipalities translating them into local
development plans. The analysis examines how different actors deploy densification logics,
the territorial asymmetries in implementation, and the emerging tensions between
environmental efficiency and social equity.

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

Densification policies in Spain have evolved as part of a broader strategy to address urban sprawl, improve housing availability, and promote sustainable land use. The drive toward compact urban development has been influenced by European Union (EU) frameworks, national urban development goals, and the need to mitigate environmental degradation caused by dispersed urbanization. Spain's approach integrates legislation, planning instruments, and financial measures that prioritize efficiency in land use and infrastructure.

<figure><img src="image_90.png" /><figcaption>Figure ES3. Timeline illustrating key policies and regulations in Spain (bottom) and EU (upper) affecting urban densification (in blue)</figcaption></figure>

<table>
   <thead>
    <tr>
     <td>
      YEAR
     </td>
     <td>
      MILESTONE / EVENT
     </td>
     <td>
      ACTORS
     </td>
     <td>
      KEY DOCUMENTS
     </td>
     <td>
      EU INFLUENCE
     </td>
    </tr>
   </thead>
   <tbody>
    <tr>
     <td>
      2002
     </td>
     <td>
      Adoption of the Energy Performance of Buildings Directive (EPBD) 2002/91/EC
     </td>
     <td>
      EU
     </td>
     <td>
      EPBD 2002/91/ec
     </td>
     <td>
      Initiated EU-wide standards for building energy performance
     </td>
    </tr>
    <tr>
     <td>
      2006
     </td>
     <td>
      Implementation of the Technical Building Code (Código Técnico de la Edificación - CTE)
     </td>
     <td>
      Spanish Government
     </td>
     <td>
      Royal decree 314/2006
     </td>
     <td>
      Transposed EPBD 2002/91/EC into national law, setting energy efficiency standards for new and renovated buildings.
     </td>
    </tr>
    <tr>
     <td>
      2010
     </td>
     <td>
      Recast of the EPBD (Directive 2010/31/EU)
     </td>
     <td>
      EU
     </td>
     <td>
      EPBD 2010/31/EU
     </td>
     <td>
      Strengthened requirements for nearly zero-energy buildings and cost-optimal levels.
     </td>
    </tr>
   </tbody>
  </table>
<table><caption>Table ES15. Table summarizing EU regulations transposed at national level (Densification)</caption>
   <tr>
    <td>
     2013
    </td>
    <td>
     Transposition of the Energy Efficiency Directive (EED) 2012/27/EU
    </td>
    <td>
     Spanish government
    </td>
    <td>
     Law 15/2013
    </td>
    <td>
     Established measures to achieve energy savings across sectors, including buildings.
    </td>
   </tr>
   <tr>
    <td>
     2014
    </td>
    <td>
     Submission of the National Energy Efficiency Action Plan 2014-2020
    </td>
    <td>
     Spanish government
    </td>
    <td>
     National Energy Efficiency Action Plan 2014-2020
    </td>
    <td>
     Outlined strategies to meet EU energy efficiency targets, focusing on building renovations.
    </td>
   </tr>
   <tr>
    <td>
     2018
    </td>
    <td>
     Amendment of the EPBD (Directive 2018/844/EU)
    </td>
    <td>
     EU
    </td>
    <td>
     EPBD 2018/844/EU
    </td>
    <td>
     Emphasized long-term renovation strategies and smart technologies in buildings.
    </td>
   </tr>
   <tr>
    <td>
     2020
    </td>
    <td>
     Approval of the Integrated National Energy and Climate Plan (NECP) 2021-2030
    </td>
    <td>
     Spanish government
    </td>
    <td>
     NECP 2021-2030
    </td>
    <td>
     Set national targets for energy efficiency and building renovations in line with EU goals.
    </td>
   </tr>
   <tr>
    <td>
     2021
    </td>
    <td>
     Enactment of the Climate Change and Energy Transition Law
    </td>
    <td>
     Spanish Government
    </td>
    <td>
     Law 7/2021
    </td>
    <td>
     Aimed for carbon neutrality by 2050, with specific measures for building energy efficiency.
    </td>
   </tr>
   <tr>
    <td>
     2023
    </td>
    <td>
     Publication of the revised Energy Efficiency Directive (EU) 2023/1791)
    </td>
    <td>
     EU
    </td>
    <td>
     EED 2023/1791
    </td>
    <td>
     Raised the EU's energy efficiency target, requiring member states to achieve an additional 11.7% reduction in energy consumption by 2030.
    </td>
   </tr>
   <tr>
    <td>
     2024
    </td>
    <td>
     Spain's updated National Energy and Climate Plan
    </td>
    <td>
     Spanish Government
    </td>
    <td>
     Updated NECP 2024
    </td>
    <td>
     Increased targets for green hydrogen production and energy storage, reflecting ongoing commitment to EU energy efficiency objectives.
    </td>
   </tr>
  </table>

The evolution of densification strategies in Spain reflects a gradual alignment with sustainable urban planning principles and broader European Union (EU) frameworks. Each milestone represents a critical step in shaping the country's approach to land use, urban development, and climate resilience.

Before the year 2000, several key laws and regulations shaped urban development and densification in Spain. The **Ley del Suelo** (Land Law) of 1956 was one of the first comprehensive land-use laws in the country. It established a framework for urban development and land classification, introducing the concept of zoning and defining land categories such as urban, developable, and non-developable. Though the law indirectly supported densification by encouraging the development of urban land within city boundaries and restricting development in non-urban areas, its enforcement was inconsistent, and urban sprawl continued to occur unchecked.

In 1975, the **Ley General de Ordenación Urbana (General Urban Planning Law)** replaced the 1956 law. This new legislation provided a more structured approach to urban planning, focusing on the preparation of municipal urban plans (known as Plan General de Ordenación