The Neighbourhoods Worth Saving: Why Culture-Led Urban Renovation Is Climate ActioN

Georgi Draganov and Ani Kodjabasheva

The Blog Series on a Just Climate Transition by the University of Oxford Climate Alumni Network (OxCAN) delves into the complexities and challenges of the issue, while proffering tangible solutions and pathways. In this post, Georgi Draganov and Ani Kodjabasheva, Co-founders of Urban Culture Fund, argue that the European Union’s climate policies will fail their targets unless they successfully address the social fabric of the neighbourhoods they aim to transform, and that culture-led investment can offer a structural alternative to climate gentrification.

Roughly 75% of existing buildings in the European Union (EU) are energy inefficient. Its building stock is responsible for approximately 40% of the Union’s energy consumption and 36% of its CO₂ emissions. Yet the EU’s annual energy renovation rate sits at barely 1%, despite 85% of its buildings having been constructed before 2000 and will still be standing in 2050. The EU’s Renovation Wave strategy – aiming to renovate 35 million buildings by 2030, doubling the current rate – is the right ambition. But it raises a question that the policy framework has been slow to answer: renovation for whom?

The standard approach treats buildings as energy assets. Insulate the walls, replace the boiler, improve the energy performance certificate and the building becomes greener. This is necessary, and it is also incomplete. When a building’s energy performance improves, its market value rises. When market values rise in historically undervalued neighbourhoods, rents follow. And when rents rise faster than local incomes can absorb, the people who live there leave. The building gets greener. The community disappears.

This process now has a name: climate gentrification. Research from Philadelphia, Barcelona, Miami, and Boston has documented how green infrastructure investments – parks, green roofs, energy retrofits – systematically increase property values and displace the low-income communities they were designed to protect. A 2019 study by Anguelovski et al., published in the Proceedings of the National Academy of Sciences, identified this as a distinct form of climate injustice: the populations most vulnerable to climate impacts are also the most likely to be displaced by green climate interventions.

The displacement does not just harm people. It harms the climate. When residents are pushed from walkable, transit-connected urban cores to car-dependent peripheries, transportation emissions rise. The 2022 report of the Intergovernmental Panel on Climate Change projected that concentrating growth near transit in dense, mixed-use developments could reduce emissions by up to 26%. Displacing a community from an urban centre to a suburb does not merely relocate emissions. It multiplies them.

As a renovated neighbourhood becomes desirable, more traditional real estate developers may move in, also increasing the rate of demolitions. That can add yet another carbon cost. Buildings and construction account for roughly 39% of global energy-related CO₂ emissions, with embodied carbon – the emissions locked into materials, manufacturing, transport, and construction – representing a significant share. Reusing a building’s existing foundations and structure can reduce embodied emissions by up to 50% compared to demolishing and rebuilding. Research indicates that extending a building’s lifespan from 50 to 80 years can cut lifecycle carbon emissions to one-third of the current baseline. The greenest building is, almost always, the one already standing – and the standing building, almost always, has people in it. Strip out the people and you have lost the social infrastructure that made the building worth keeping in the first place.

But a building standing empty or standing while its community scatters captures neither the embodied carbon benefit nor the social resilience that makes renovation worthwhile. This is an issue the EU’s current policies have so far been unable to sufficiently address. The standard Renovation Wave framework accounts for thermal performance and energy ratings. It does not account for what holds a neighbourhood together: the cultural ecosystems of local businesses, social networks, traditions, and gathering places that give people a reason to stay, invest in, and maintain the buildings they inhabit.

Earlier in this series, Brendan Halloran argued that climate approaches need to better reflect the systems, including the political economy and governance, that shape climate vulnerabilities, decisions, and outcomes. He noted that the most critical barriers to decarbonisation are not resources or technologies, but the difficulty of designing structural change in complex social environments. The built environment is precisely such a system. A building is not a standalone unit of energy performance. It exists within a neighbourhood, a local economy, a set of relationships. Renovate the building without stabilising those relationships, and you get displacement. Stabilise those relationships without renovating the building, and you get energy poverty. The task is to do both at once.

The EU’s policy architecture has begun to recognise this. The New European Bauhaus (NEB), launched in 2021 under the motto “beautiful, sustainable, together,” promotes pilot projects that address material and social environments together at the neighbourhood scale. NEB has demonstrated, repeatedly, that the model works. What it has not yet done – what no policy initiative alone can do – is solve the financing question. Pilots do not scale themselves. Aligning all the pieces of the puzzle in one neighbourhood is hard; doing it over, and over, and over again across the continent requires capital structured for the job.

This is the goal behind Urban Culture Fund (UCF), a culture-led real estate impact fund designed as a working model for urban regeneration across Europe. UCF is built around the insight that neighbourhoods most worth saving – for their cultural richness, their social diversity, their embodied carbon – are precisely the ones most at risk of being destroyed by their own revival. The fund’s pilot targets a neighbourhood in Sofia, Bulgaria, one of the oldest continuously active market districts in southeastern Europe, where property values sit roughly 40–45% below the city average.

UCF emerges from the work of The Collective Foundation, an NGO with six years of cultural activation experience across Sofia and other European cities, and a two-time New European Bauhaus Prize winner. The Collective has proven what culture-led neighbourhood transformation looks like on the ground. UCF takes that operating know-how and wraps it in an investment structure – so the model can scale beyond what philanthropy and grants alone can fund. Sofia is the first pilot. Europe is the design target.

The EU’s own policy architecture already points in this direction. The Renovation Wave’s Affordable Housing Initiative is explicitly linked to the New European Bauhaus, with a mandate to renovate buildings in 100 districts to improve energy efficiency and liveability. The revised Energy Performance of Buildings Directive, to be transposed into national law by May 2026, requires Member States to target the worst-performing buildings first – buildings disproportionately located in the kind of historically undervalued neighbourhoods where displacement risk is highest.

The policy intent is there. What is still missing is capital structured to operate at the intersection – investment vehicles that treat community retention not as a constraint on returns, but as the mechanism through which durable value is created.

A just climate transition is about ensuring that the communities most in need of renovation are not erased by it. Neighbourhoods that thrive socially are the bedrock of true sustainability.

Georgi Draganov is a co-founder of Urban Culture Fund (UCF), a culture-led real estate impact fund designed to renovate and revitalise historically undervalued urban neighbourhoods across Europe with climate alignment as a core structural principle. UCF builds on six years of community activation work by The Collective Foundation across Sofia and other cities. Georgi is a serial entrepreneur with 15 years’ experience spanning consumer goods production, blockchain technologies, and e-commerce, driven by a persistent conviction that the physical world we inhabit can be made more beautiful, more sustainable, and built to last. He holds a degree in business administration from the University of Portsmouth.

Ani Kodjabasheva is a co-founder of UCF. Ani graduated from the University of Oxford with a MSt in History of Art and Visual Culture in 2013, and completed two further master’s degrees in the history of architecture at Columbia University. She was then instrumental in launching The Collective Foundation and growing it into a leading European voice on sustainable urban transformation through culture. The Collective holds two New European Bauhaus Prizes, a Grand Prix at the European Heritage Awards/Europa Nostra Awards, and the Living with Rivers global label of quality.

Blogs are the opinions of their authors and do not represent the official views of OxCAN.