The European Commission drives greener, more inclusive and attractive neighbourhoods

Since 2021, the European Commission has been driving the New European Bauhaus (NEB), an initiative that aims to “bring the European Green Deal closer to people” by transforming the built environment, combining sustainability, social inclusion and aesthetics. In 2025, this vision takes on a more structured form through the NEB Facility, a new instrument that funds urban regeneration and community innovation projects under the Horizon Europe programme, with an annual budget of €120 million until 2027.

For organisations offering innovative solutions in these areas, the NEB Facility provides funding opportunities to scale up their impact. Through Kaila – the smart platform developed by Zabala Innovation that enables users to search for funding, analyse the latest innovation trends, monitor competitors and find partners – it’s possible to track this and other initiatives with precision.

The NEB Facility was born following public consultations with Member States and on-the-ground stakeholders in 2024 and was formally approved in March of last year. Its structure has two strands: one focused on research and innovation, aimed at generating new solutions for urban regeneration, and another on rollout, which channels resources from other European programmes to implement those solutions on the ground.

The initiative is part of the European Green Deal strategy, which aims to reduce emissions by 55% by 2030 and achieve climate neutrality by 2050. The NEB Facility, however, adds a cultural and social dimension to these objectives: urban design and regeneration can restore ecosystems, foster citizens’ sense of belonging and improve quality of life. Izaskun de Allende, Head of the Social innovation Knowledge area at Zabala Innovation, highlights that “the EU now prioritises projects that combine ecology, social inclusion and a culture of citizen participation in neighbourhoods,” adding that “this approach transforms regeneration into a tool for community cohesion.”

Housing urgency

In this way, the first thematic focus of the NEB Facility explores the relationship between the green transition, social inclusion and local democracy. The second promotes circular and regenerative approaches to the built environment, while the third supports innovative business models to ensure the economic sustainability of such interventions. All calls under these three strands will close on 12 November.

Institutional backing has grown stronger in recent months. In December 2024, Brussels appointed Dan Jørgensen as the first European Commissioner with specific responsibilities for Housing, alongside his Energy portfolio. Just a few months later, in March 2025, the European Commission, together with the European Parliament, held a Conference on Affordable Housing. During the event, it was stressed that ensuring fair access to decent, energy-efficient housing is “an urgent concern that requires both public and private investment.” Commissioner Jørgensen was clear: “We need a European plan for affordable housing and must unlock both public and private investment in this area.”

The data is equally compelling. According to Eurostat, between 2010 and the fourth quarter of 2023, house prices rose by 47%, and rents by 18%. In this context, more than 10% of urban households spend over 40% of their income on housing costs. This situation is fuelling political pressure: in December 2024, the mayors of Amsterdam, Barcelona, Bologna, Budapest, Leipzig, Lisbon, Lyon, Milan, Paris and Rome signed a letter demanding “immediate solutions” and direct access to EU funding.

Holistic sustainability

These developments mark a moment of consolidation for a human-centred sustainable urban regeneration model. According to De Allende, “carrying out energy efficiency and urban regeneration projects without involving citizens is no longer an option; it has been proven that fostering a culture of civic participation and ensuring no one is left behind give projects identity and roots.” She adds: “The NEB Facility offers an opportunity to combine public funding and social innovation to ensure these more active, vibrant and resilient neighbourhoods exist and endure.”

Projects submitted to this initiative will need to be ambitious in scope. Over its four years of existence, “the NEB has gradually created an ecosystem that is gaining increasing visibility, providing tools and valuable resources for all actors looking to lead or participate in future projects under its label,” De Allende stresses.

Among these initiatives is the NEB Community, comprising official partners and friends, the NEB Lab, and the community platform. In addition, tools are available for organisations, investors and individuals wishing to drive NEB projects, ensuring they align with the initiative’s principles.

Once the application deadline has passed, the European Commission will select those proposals that best combine innovation, impact and community participation.

In this way, the EU is backing urban regeneration on four fronts—reconnecting with nature, fostering a sense of belonging, prioritising vulnerable groups, and creating long-term circular solutions—simultaneously, with robust financial models to ensure sustainability. In this sense, “the NEB Facility is a pioneering instrument that positions neighbourhoods as microcosms of the transition towards a more sustainable, inclusive and culturally rooted Europe,” concludes De Allende.