Information note on urban renewal
Urban renewal
The Danish Act on Urban Renewal and Urban Development, which entered into force on 1 January
2004, serves as a tool for the Danish municipalities to make targeted efforts in urban and housing
policy. To address this objective, the municipalities may make use of four initiatives:




Building renewal
Condemnation
Recreational areas
Area renewal
Box 1. The government’s urban renewal strategy




Urban development is an important instrument in the social housing effort.
Urban development should initiate the development and transformation of troubled cities and urban
areas, to make them attractive for settlement and private investments.
Urban development should improve the housing standard in these areas and thus ensure modern and
good-quality housing.
Urban development is based on voluntarism as well as private initiatives and private co-financing.
In 2011, DKK 250 million was earmarked for urban development. DKK 50 million of the funds
were allocated to area renewal, and the remaining funds were allocated to building renewal, improvement of recreational areas, condemnation, etc.
Building renewal
Building renewal concerns the rebuilding and renovation of dwellings (except for social housing),
the renovation of village halls, and the rebuilding of private business into rental properties. The relevant regulations are found in the Danish Act on Urban Renewal and Urban Development, Parts 35. The regulations serve to create well-functioning housing and housing estates.
Funds for building renewal are allocated to municipalities that wish to subsidise urban renewal projects. Distribution between municipalities is based on objective criteria reflecting the need for building renewal in the individual municipalities. Municipalities which use public funds for urban renewal must contribute an equivalent amount.
The municipalities administrate the subsidy scheme and make the decision to grant subsidies in
each particular case. Prospects of being granted subsidies may differ from municipality to municipality. Expenses are shared equally between the central government and the municipality.
The Act on Urban Renewal and Urban Development allows for grants to:
Private rental housing
 which lacks installations in the form of modern heating, toilet or bath, or
 which was built before 1950 and is considerably run down, or
 for which an energy rating has been drawn up, suggesting scope for improvements.
Subsidies may be provided for maintenance or improvement works, demolition, any work mentioned in the energy rating, and the establishment of small extensions. The subsidy is calculated
based on the total expenses eligible for subsidies. The subsidy will normally cover only a portion of
the total expenses, as the municipality will normally require the owner to cover a portion of the
cost.
Owner-occupied housing and cooperative housing
 which lacks installations in the form of modern heating, toilet or bath, or
 which was built before 1950 and is considerably run down, or
 for which an energy rating has been drawn up, suggesting scope for improvements.
Subsidies may be provided for work on the building envelope, demolition, any work mentioned in
the energy rating, and to remedy condemnable conditions. The subsidy may amount to a maximum
of one fourth of the expenses eligible for subsidies. The size of the subsidy will depend on any principles specified by the municipality, or it will follow a concrete evaluation of the need for support
that must be met in order for the project to be implemented. If the building in question is listed or
preservation-worthy, the subsidy may amount to up to one third of the expenses eligible for subsidies. Subsidies are tax exempted.
Village halls or buildings of similar use
 which are located in villages or rural areas.
2
Subsidies may be granted for work on the building envelope, the establishment of measures to improve accessibility, and to remedy condemnable conditions. The calculation of subsidies is subject
to the same rules as for owner-occupied and cooperative housing.
Vacant business premises
 which are to be rebuilt into rental housing.
Subsidies may be provided for work on the building envelope, demolition, any work mentioned in
the energy rating, and to remedy condemnable conditions. The calculation of subsidies is subject to
the same rules as for owner-occupied and cooperative housing.
Box 2. Results



The number of dwellings lacking one or more installations (toilet, bath or central heating) has
dropped from 324,000 to 138,000 between 1990 and 2010.
This drop is a result of modernizations, conversions of two or more dwellings into one, demolitions
of poor quality dwellings and a targeted urban renewal effort.
Since 1990, approx. 65.000 dwellings have been subject to public sector urban renewal.
Condemnation
If a building or part of a building used for residential and other purposes constitutes a health or fire
hazard for its occupants, the building is considered condemnable.
In accordance with Part 9 of the Act on Urban Renewal and Urban Development, the local council
must inspect properties used for residential or other purposes, if due to their location, fitting-out or
other conditions these buildings constitute a health or fire hazard.
Where the use of a building is assessed to constitute a health or fire hazard, the local council is required to condemn the building, i.e. to prohibit the building or part thereof from being used for residence or other occupancy. Condemnations do not give access to compensation.
Where residence has been prohibited, the local council must allocate another dwelling to the household. All re-housing expenses are shared equally between the central government and the municipality.
At the same time or after a prohibition has been made pursuant to the Act on Urban Renewal and
Urban Development, the local council may order the owner of the building to remedy the condemnable conditions.
Regulations regarding the condemnation of dwellings which constitute a health or fire hazard are
found in the Act on Urban Renewal and Urban Development, Part 9, sections 75-83. The purpose of
the regulations is to ensure that action is taken against hazardous conditions in dwellings.
Recreational areas
Regulations concerning recreational areas are found in the Act on Urban Renewal and Urban Development, Part 6, sections 39-50.
In several of the oldest blocks of Denmark’s housing stock, the recreational areas are still divided
between the individual owners and cooperative societies and are completely unsuitable for recreation and play. Furthermore, many of these recreational areas have no green areas or vegetation.
3
Expenses towards the establishment and furnishing of a simple, common recreational area can under certain conditions be covered by public subsidies within a financial allocation comprising housing unit subsidies and area subsidies.
Area renewal
Under the Act on Urban Renewal and Urban Development, the central government may provide
municipalities grants for the implementation of a decision on area renewal in troubled cities and
estates. Area renewal was implemented in the Act in 2004.
The overall purpose of area renewal is to initiate the development and transformation of towns and
estates with considerable social problems, in order to make them attractive for settlement and
strengthen the basis for private investments.
A total of DKK 50 million a year is earmarked for area renewal. A maximum of DKK 10 million
can be allocated to any one area renewal project, yet the amount granted may not exceed one third
of the total expenses of the municipality relating to the project.
The municipalities may apply for subsidies for area renewal, and these may be used for measures
such as improving roads and public squares, traffic-related measures, as well as social and cultural
efforts. Area renewal projects should be implemented within a time limit of five years. Subsidies
are prioritised (in the order shown) to projects in the following locations:




run-down urban areas in small towns
run-down urban areas in large towns
housing areas with considerable social problems
old business and dock areas
When a municipality has been granted a reservation of funds for an area renewal project, the municipality is required to prepare an urban renewal programme for the area in question. The urban renewal programme must be prepared in cooperation with residents and other parties who may be
affected by the local council’s decision on area renewal. The urban renewal programme forms the
basis for the local council’s decision on area renewal and for the final commitment of the Ministry
for Social Affairs to reimbursing expenses relating to the area renewal.
Box 3. Number of area renewal projects.
Since the passing of the Act in 2004, a total of 101 area renewal projects have been initiated
Some areas in which area renewal projects are being implemented have a further need for renovations of dwellings. In these cases, further subsidies may be granted from the funds for building renewal. By combining area renewal measures with building renewal measures, a combined and
strengthened effort may be achieved, encompassing both an effort of a physical, cultural and social
nature regarding the area, as well as an effort to improve the conditions of the residential buildings.
A combination of these measures contributes to creating a synergy effect beneficial to both the
community and local players.
4