Net zero neighbourhoods: Innovative investment at the local level to transform urban living

This article, published by the Local Government Innovation Unit (LGIU) and authored by Daniel Glassman, an LGIU Associate, presents an interview with Rufus Grantham, Global Head of Retrofit and Built Environment at Bankers without Boundaries. It explores the concept of “net‑zero neighbourhoods,” a pan‑European initiative aiming to retrofit existing housing stock through blended private‑public financing to achieve climate targets across 100 European cities by 2030.

Grantham’s career transition from two decades in finance to sustainability began after a 2019 redundancy from Royal Bank Canada. Joining the not‑for‑profit Bankers without Boundaries, he became involved in the EU‑funded Healthy Clean Cities project (now Net Zero Cities). The initiative identified that 30‑40 % of urban emissions stem from the built environment, with council housing accounting for under 10 % of that stock, highlighting the need for large‑scale, place‑based retrofitting beyond individual homeowner actions.

The interview outlines a financing model that aggregates retrofit projects at the street or neighbourhood level to attract long‑term, low‑risk capital from pension funds. A proposed 40‑year debt product could mobilise trillions of pounds across Europe. By bundling thousands of properties, economies of scale can reduce installation costs—for example, a heat‑pump manufacturer reported 8 hours of production versus 28 hours of sales and installation per unit, suggesting significant savings when scaled.

Retrofitting at neighbourhood scale enables additional infrastructure such as green spaces, EV‑charging stations, and bike storage. The approach also offers social and economic advantages: job creation, reinvestment of savings into local economies, and potential productivity gains. The article cites the UK’s housing retrofit cost estimate of roughly £300 bn, arguing that the true requirement may exceed £1 trn, reinforcing the necessity of innovative financing.

Grantham’s team has secured consultancy contracts with UK local authorities, contributing to the City Investment Report and a 250‑page green‑book business case. They have engaged with the 3Ci consortium (London and 11 core cities) to propose place‑based investment structures. Demonstrator projects are under discussion in the West Midlands, Manchester, Bristol, and several London boroughs, including Hounslow.

Key obstacles include the complexity of the financing model, limited public‑sector capacity, and the need for coordinated funding pots. Local governments face austerity‑driven budget constraints, often relying on a single officer to manage multiple initiatives. The article stresses that successful deployment will require competition‑based funding streams, stable political leadership, and devolution of resources to empower local agencies.

The interview underscores that the net‑zero neighbourhood model is adaptable across diverse European contexts, despite variations in property values and income levels. By standardising retrofit costs per square metre and aggregating projects, the approach seeks to avoid regressive outcomes and attract institutional investors irrespective of local market disparities.

Overall, the resource provides a fact‑based roadmap for scaling sustainable housing retrofits through blended finance, stakeholder collaboration, and place‑based planning. It emphasizes that while funding remains the primary hurdle, the precedent of large‑scale energy transitions—such as the 1970s shift from town gas to natural gas—demonstrates the feasibility of rapid, collective action in the housing sector.