Understanding Capital Market Dynamics For Increased Investment In New European Bauhaus Projects In Neighbourhoods

Revitalising neighbourhoods for communities to come together is about ensuring the right conditions. Innovative funding and new business models can provide the necessary framework and incentives to rethink how solutions and projects are designed, planned, executed, and invested in for the structural and systemic transformation of neighbourhoods^[1] in line with New European Bauhaus (NEB) values^[1] and working principles^[1]. Demonstrating the socioeconomic, environmental, financial, aesthetic^[4] and cultural value creation of NEB-aligned solutions and projects can incentivise stakeholders in the built environment^[1] and its related ecosystems (e.g. construction^[1], banking, insurance, social economy, and real estate) to invest and participate in the circular^[1], inclusive^[1], affordable, accessible, sustainable^[1] and culturally significant revitalisation of neighbourhoods. New business and innovative funding models are thus crucial to encourage long-term and life-cycle thinking in the built environment while enhancing its long-term, sustainable competitiveness.

This Destination will address three of the Commission political guidelines 2024-2029, namely:

1. A new plan for Europe’s sustainable prosperity and competitiveness
2. Supporting people, strengthening our societies and our social model
3. Sustaining our quality of life: Food security, water and nature

This Destination supports the NEB Facility’s overarching aim to drive the implementation of the European Green Deal on the ground. Its focus on circular economy principles, biodiversity, responsible and sufficient use of natural resources, and sustainable competitiveness contributes to the Clean Industrial Deal^[10], EU Circular Economy Action Plan^[11], new Circular Economy Act^[12], Zero Pollution Action Plan^[13], EU Biodiversity Strategy^[14], and European Climate Adaptation Plan^[15]. This Destination also seeks to engage local stakeholders and the local social economy in neighbourhood transformation while addressing community^[1] challenges and needs as well as better understanding and leveraging appropriate market dynamics. It thereby offers potential contributions to the EU Startup and Scaleup Strategy^[17]. By focusing on the reuse of the existing building stock, the provision of key social infrastructures^[1] and services, and addressing homelessness^[1] at neighbourhood level, it also contributes to the EU Renovation Wave^[20] and potentially contributes to the European Affordable Housing Plan^[21].

In work programme 2026-2027, this Destination contributes to the following overarching expected impacts set out in the Horizon Europe strategic plan 2025-2027:

8. Realising the full potential of cultural heritage, arts, and cultural and creative sectors

9. Strengthening social and economic resilience and sustainability

15. Achieving global leadership in climate-neutral, circular and digitized industrial and digital value chains

In addition, proposals for topics under this Destination should set out a credible pathway to contributing to the development of innovative funding and new business models for the transformation of neighbourhoods, and more specifically to one or several of the following impacts:

1. Better understanding of the contextual local conditions that drive or hinder sustainable neighbourhood developments and the uptake of NEB-aligned solutions and projects, such as capital and real estate market dynamics and socioeconomic, cultural, demographic, and climatic changes.
2. Anticipation and consideration of future needs, functions and inhabitants (including more-than-human^[1] perspectives) of neighbourhoods and their developments towards the future.
3. Demonstrated socioeconomic, financial, environmental, cultural, and aesthetic value of NEB-aligned solutions and projects driving the revitalisation of the built environment in neighbourhoods.
4. Increased investment in the transformation of neighbourhoods in line with NEB through alternative, innovative, and community-based investment and ownership approaches^[23].
5. Community and place-based approaches that adopt a systemic perspective and use co-creation^[1] approaches with diverse local stakeholders, including marginalised or underrepresented groups or those in a vulnerable situation, and contribute to addressing pressing community challenges and needs such as homelessness and housing.
6. ⁠Circular manufacturing, renovation, and reuse approaches in the built environment contribute to the sufficient use of resources and space.

When possible and relevant, actions are strongly recommended to collaborate with and build on the results of past and ongoing research projects, including regional, national or European funded projects, to ensure consistency and continuity in research.

[1] See definition in the Glossary section of the NEB part of the HE WP26-27.

[2] See definition in the Glossary section of the NEB part of the HE WP26-27.

[3] See definition in the Glossary section of the NEB part of the HE WP26-27.

[4] See definition of "beautiful” in the Glossary section of the NEB part of the HE WP26-27.

[5] See definition in the Glossary section of the NEB part of the HE WP26-27.

[6] See definition in the Glossary section of the NEB part of the HE WP26-27.

[7] See definition in the Glossary section of the NEB part of the HE WP26-27.

[8] See definition in the Glossary section of the NEB part of the HE WP26-27.

[9] See definition in the Glossary section of the NEB part of the HE WP26-27.

[10] European Commission, ’Clean Industrial Deal’, accessed 5 August 2025, https://commission.europa.eu/topics/eu-competitiveness/clean-industrial-deal_en

[11] European Commission, ’Circular Economy Action Plan’, accessed 5 August 2025, https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en

[12] Under development and with expected adoption by the end of 2025.

[13] European Commission, ’Zero Pollution Action Plan’, accessed 5 August 2025, https://environment.ec.europa.eu/strategy/zero-pollution-action-plan_en

[14] European Commission, ’Biodiversity Strategy 2030’, accessed 5 August 2025, https://environment.ec.europa.eu/strategy/biodiversity-strategy-2030_en

[15] European Commission, ’EU Adaptation Strategy’, accessed 5 August 2025, https://climate.ec.europa.eu/eu-action/adaptation-climate-change/eu-adaptation-strategy_en

[16] See definition in the Glossary section of the NEB part of the HE WP26-27.

[17] European Commission, ’EU Startup and Scaleup Strategy’, accessed 5 August 2025, https://research-and-innovation.ec.europa.eu/strategy/strategy-research-and-innovation/jobs-and-economy/eu-startup-and-scaleup-strategy_en

[18] See definition in the Glossary section of the NEB part of the HE WP26-27.

[19] See definition in the Glossary section of the NEB part of the HE WP26-27.

[20] European Commission, ’Renovation Wave’, accessed 5 August 2025, https://energy.ec.europa.eu/topics/energy-efficiency/energy-performance-buildings/renovation-wave_en

[21] European Commission, ’European Affordable Housing Plan’, accessed 5 August 2025, https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14670-European-Affordable-Housing-Plan_en

[22] See definition in the Glossary section of the NEB part of the HE WP26-27.

[23] See the NEB Investment Guidelines for more information. European Commission, ’NEB Investment Guidelines’, New European Bauhaus, accessed 5 August 2025, https://new-european-bauhaus.europa.eu/tools-and-resources/neb-investment-guidelines_en . Sections of particular relevance for applicants to consider include: 1. Introduction; 2. Mapping the NEB; 4.4 Project risks; 5. Making the NEB case; and 6. Conclusions.

[24] See definition in the Glossary section of the NEB part of the HE WP26-27.

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