Heritage-sensitive decarbonisation requires governance approaches that reconcile technical feasibility, cultural preservation, and collective decision-making. This study investigates how Living Labs (LLs) can facilitate the formation of negotiated decarbonisation pathways and inform adaptive policy frameworks such as regulatory sandboxes. The research applies a qualitative case study of the Terrassenhaussiedlung (THS) in Graz, Austria—a modernist housing estate and demonstration site within the Horizon Europe DeCO2 (decarbonisation in buildings) project. Data were derived from twelve workshops, document analysis, and field observations conducted during the LL’s establishment phase. Findings were coded thematically and mapped onto the Dynamic Decarbonisation Framework (DDF). Five interlinked process mechanisms were identified: (1) knowledge negotiation, translating technical and legal concepts into resident-relevant terms; (2) productive tensions, driving innovation through conflict resolution; (3) governance, enabling legitimate collective decisions via sociocratic methods; (4) barriers and enablers, integrating temporal, financial, and regulatory dimensions; and (5) learning and reflexivity, ensuring continuity and adaptation. Heritage-sensitive decarbonisation advances through iterative alignment across technological, social, and policy domains. The study refines the DDF by demonstrating how LLs inform and can potentially form complementary, adaptive governance mechanisms linking technological feasibility, social legitimacy, and regulatory learning.
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