The Business Case for Rooftop Extension

September 8, 2026

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What is the business case for rooftop extensions?

Thijs Müller, Co-founder of Creative City Solutions, and Didier Mignery, Founder of UpFactor, explain how adding housing on top of existing buildings can address several challenges at once: housing shortages, energy renovation and urban land use.

This episode covers:

When rooftop extensions make economic sense, and the technical, regulatory and financial complexities involved
How revenue from additional homes can help finance energy renovations and upgrades to existing buildings
The advantages of modular timber construction and designing for deconstruction
The episode also looks at the potential scale of rooftop extensions, and the role of regulation, data and stakeholder engagement in making them more viable and scalable.

This is the first episode of the “Rooftop Extension” series.

Video Impression

People

Thijs Müller, Co-founder; Founder at Creative City Solutions
https://www.linkedin.com/in/thijs-m%C3%BCller-23a07489/

Didier Mignery at UpFactor
https://fr.linkedin.com/in/didier-mignery

Patrick Hypscher, Circular Business Strategist, PaaS Expert
https://www.linkedin.com/in/hypscher/

Chapters

00:00:00 Intro
00:02:04 Meet Thijs Müllet
00:07:21 The rooftop potential
00:13:57 How fast rooftop extension can scale
00:15:34 Meet Didier Mignery
00:16:17 The business case for building upward
00:18:40 Scanning cities for hidden rooftop potential
00:22:55 Turning resistance into shared value
00:27:21 What it will take to scale across Europe
00:31:51 Outro

About

Created in 2017, UpFactor is a company specializing in elevation. They detect on a large scale the potential for real estate optimization and overhead land in particular. Developing develop untapped territories to facilitate the creation of new square meters without artificializing the soil.

This is made possible by, UPFACTOR GEOSERVICES, an innovative software to detect the potential for elevation of a given address. Designed and developed internally to conduct large-scale prospective studies, UPFACTOR GEOSERVICES is a geographical information system that uses a database that aggregates all the information necessary to define buildable potentials.

Further Links

https://upfactor.fr
https://creativecitysolutions.com/

Transcript

[00:00:00] Intro

Didier Mignery: The second layer of circularity is designing for construction and for deconstruction too. The materials return their purity, the wood, the metal connectors, the insulation, they are not fused into a mono-monolithic mass of concrete rubble. So the building extension itself hold a high residual material value for the future. We are tracking this material so that fifty or sixty years from now, this module can be adapted, transformed and cleanly disassembled and reused as well.

Jingle: My name is Patrick Hypscher, and this is circularity.fm, the podcast about understanding, building, and managing circular business models.

Patrick Hypscher: Europe needs millions of new homes, and it needs to stop paving over open land. Those two demands look incompatible until you look up. Every flat in a city is a plot that is already zoned, already connected, already served by a road, a school, and a tram stop. We just ignore the third dimension. Rooftop extensions turn that unused layer into housing without a single square meter of new land. Done well, they are also the cleanest way to build. Timber instead of concrete, prefabricated parts, a shell that goes up in weeks while the residents stay in their flats, so why does it still happen one roof at a time? Welcome to Rooftop Extensions, a three-episode series. We look at the case for building on top, social, commercial, ecological. Then at one real project in Dresden, and finally at what it would take to make this a standard procedure rather than a bespoke exception.

[00:02:04] Meet Thijs Müller

Patrick Hypscher: Our guest of today is Thijs. He's the co-founder of Creative City Solutions. Welcome, Thijs.

Thijs Müller: Hi, Patrick. Thanks for having me.

Patrick Hypscher: Thijs, how did you enter that segment of rooftop extension?

Thijs Müller: Yeah, that's a, that's a good question. Uh, I, I started actually, I have a background in construction engineering and fintech. Always was looking for can we make the construction industry, the project development industry, actually more efficient, more innovative. As I was working as a real estate developer, I was approached by a housing association. That housing association, they asked me actually, "Can we, can you arrange for us a retrofit energy label D to an A+ label, uh, energy label?" So a big question. Big question. From there we… I actually started to do some in Excel, some calculations, and I discovered really early, before we started to do like expensive researching for, you know, what is the quality of the roof or of the windows, et cetera, it would be like to 100,000 euros per apartment to do the energy re-retrofit. And so we went back to the homeowner association and we said, "Okay, well, this will be the price if you want to fulfill your ambitions." And then we started talking with them. What if we, because there were two big building blocks next to each other, like big apartment blocks, post-war building blocks. What if we built 10 extra homes of each of them on top, and we sell them on the market, and instead of the profits of new construct homes go to the real estate developer, they flow back into the housing association from which they can finance actually their energy renovation. And that was actually quite a big success. We were able to flow back almost 800,000 euros per apartment, uh, block, uh, back to the, to, to the homeowner association. And in that way, they were able to, to finance everything, actually. That was our starting point for Creative City Solutions. That way, we thought, "Okay, what, what is necessary to, upskill this and systemize this, and use this as one of the solutions for, well, the, the multitude, um, um, challenges we face in the housing market today?" Yeah.

Patrick Hypscher: Okay, wonderful. I mean, so you're pretty familiar with the segment and already mentioned the challenges the housing sector faces. What are they?

Thijs Müller: Yeah. So I think in the Netherlands, but I think that counts for all of Europe, right? See more than one. We- so we always focused on like we have a housing shortage that's like really good in the newspapers. But actually there are way more challenges, right? So we have the housing shortages, we have the energy crisis. We need to decarbonize almost all of our building stock by 2050, at least by the EU regulations, but also if we wanna face the climate crisis. And we see what I call like a, a product market fit. There, there's no product market fit for the current building stock we have. We see a different kind of population looking for their homes, and they simply cannot pay for it. Those three crisises, I think all come a bit together in those housing associations. They wanna renovate their buildings. They don't have the money for it and they're locked in their decision-making process to do so. Yeah.

Patrick Hypscher: Okay. That sounds indeed like a challenging situation. And how can rooftop extension here help to ease this situation?

Thijs Müller: Yeah. So fir-first of all, I think it's good al- to mention like rooftop extension. We call it optoppen, by the way, in the Netherlands. We also did like a big research with, in England and in Spain and France they embraced the word optoppen. I don't know if you guys are familiar with it yet in, in Germany, but let's call it rooftop extension for now. So I don't think rooftop extension is like the final solution for everything, right? It's a part of the solution for the housing crisis, while at the same time doing something for that, uh, energy retrofit, um, problem. Um, and I think rooftop extension can break that deadlock the housing associations are in because they wanna do their energy renovation. They don't have the resources to do so. And in, in this way they can create their own re-resources on their roof actually. And at the same time for municipalities and governments who want to do something for like intensify their neighborhoods, this is a really efficient way, um, without, uh, the need for new greenfields or new infrastructure because the infrastructure is already there. And actually it's, it provides room for new, uh, amenities, right? New coffee shops around the corner because there will be new extra homes with a different kind of population. Um, and in that way it can, it can help, uh, some of those crises.

[00:07:21] The rooftop potential

Patrick Hypscher: One thing is like the theory, it sounds super attractive. The other thing is also the available space. So if we look at, let's say Amsterdam, Netherlands, maybe even Europe or parts of Europe, what's the potential for off-top there, like the actual potential in terms of houses?

Thijs Müller: So actually that's where we started with four years ago.

Patrick Hypscher: Mm-hmm.

Thijs Müller: So we did those two first projects and then we thought, "Okay, how big is this, this potential to, to upskill this, this innovation?" So we first looked in, um, in certain neighborhoods in Amsterdam, and we discovered if there are like 20 apartment blocks, we can already create 300 homes. If you… And then we broadened that scope, and we saw in Amsterdam only like, the easy roofs, like the, the flat roofs, big building blocks, they have an over-dimension, so they can have that extra weight. We can do in Amsterdam almost 8,000 new homes, while at the same time retrofit multiple by four those homes below. And if we look broader, because did our research, we came up with a number of almost 100,000 homes in the Netherlands. Well, there are other research institutes like the TU Delft who say it can be even way higher if we use all the potential of all the roofs, we can go up to 300,000 new homes. But if you look at research from the Economic Institute, for example, they say like the actual potential is way lower, it's not like, the problem is, okay, maybe we have a lot of flat roofs where we can build on top, but you have to fix the permits, the parking, the ground lease, and all those factors combined, and also the housing association, 100% in the Netherlands, have to agree to the proposal. Uh, and those factors, um, that number hugely. So they say maybe 40, 40,000 new homes in the Netherlands this way. And that's for us enough reason to exist to make this possible in the Netherlands. Yeah.

Patrick Hypscher: Yeah. And it's still like even 40,000, it's quite a number considering the benefits you mentioned before. Like, you don't need extra land and to a certain degree also extra infrastructure. Thijs, one final question. You already mentioned the municipalities. For them it's also good instruments. While at the same time, of course, the municipalities and the public authorities, these are the ones who write the regulation, be it about parking or some other quotas. And I guess they also have mixed feelings and have to balance multiple goals. So what are the instruments through which municipalities support off-top them already?

Thijs Müller: So that's where we, what we call the, the optop paradox, rooftop extension paradox. Um, to, to briefly explain, it's, um, like the homeowners who own a building or, uh, housing corporations who own those buildings, they say, "Yeah, we, we want to do that rooftop extension, but the municipality makes it way too complex. We don't know what kind of permits." Uh, the, the, the development costs are super high. Like to, to create 10 new homes is on development upfront cost almost as much as creating 100 homes, for example. Uh, well, at the same time, we discovered that the municipality says, "Yeah, we don't have to make like special regulations for this because nobody, uh, files a permit for this." So that's what we call the paradox, right? Um, so, um, two years ago, we started to talk with municipality in Amsterdam, and we say, "Okay, how can we break this paradox?" We came up with a plan with mid- together with municipality, actually, we got an assignment. So what if we submit a virtual, um, permit for 30 building blocks? Uh, so we, we fixed the parking, we fixed the ground lease because in Amsterdam you have a ground lease quote you only get at the end of the whole process. So in that case your, your business case is like one big black box. Also, what kind of product, what kind of, uh, aesthetic, what kind of materials you can use. And in that way, so we, we didn't do that on our own. We did that together with constructors, architects, uh, planning, um, uh, agencies, and the municipality. Um, and the mayor was involved, and we, we, we laid out actually the blueprint, blueprint for all these homeowners if they want to start. So only if they want to start, they know what way they need to walk. And they know, like most of the risks, uh, they, they can already migrate upfront. And, um, so we, we launched that, uh, that, that pilot, uh, half a year ago, now we see the first homeowners association starting to fill, like, permits following exactly those, those um, th-that framework we created actually for them. Seems to be quite successful. Uh, and at the same time, uh, we created together with the government, uh, the National Rooftop Extension Program. So there's a national program, uh, which actually says, um, that municipalities needs to have a plan like this in place in the coming two years. So they need to facilitate homeowners to create their rooftop extensions. Well, of course, it's super complex, and you need to get ev- all the municipalities involved. But that's the process we are in right now, actually. So Amsterdam is like the flagship. They started, and now all the, well, at least the 10 bigger cities around Amsterdam are following those plans as well. So that's super exciting to see that the government is, rather than reactive, is very proactive in this way to, to help all those different kind of owners in the existing city.

[00:13:51] How fast rooftop extension can scale

Patrick Hypscher: I mean, I'm always amazed by the degree of innovation from the Dutch people, yeah. And I mean, a virtual permit s- sounds super interesting. Now I know why your company is called Creative City Solutions.

Thijs Müller: It does make sense, right?

Patrick Hypscher: Yeah, it does. And I mean, this is a promising outlook, and I'm curious to see how many of these 40,000 flats will become reality in the next… I mean, two years the- there will needs to be a plan, and then it takes some more years to make the development and so on. But I guess in four to five years you probably know where we're standing then.

Thijs Müller: Yeah. I think so too. Like in the Netherlands, I don't know how it is in Germany, for example, but in the Netherlands

Patrick Hypscher: Slower for sure.

Thijs Müller: an average home takes 10 years to complete from first ambition

Patrick Hypscher: Oh, well.

Thijs Müller: construction. And well, the f- the two projects I started with as our pilot projects, we created in four years from ambition to, to plan. And actually we see a lot of projects starting now. So I think the coming two years will be super exciting, to see where this will go and if it is actually, yeah, if we are able to systemize it and then to scale it up. Yeah.

Patrick Hypscher: Yeah. Cool. Now let's look into France how they do it. Thijs, thanks for kicking off this episode and this series, and super excited about your work. Keep going.

Thijs Müller: So much, Patrick. You. Ciao.

[00:15:29] Meet Didier Mignery

Patrick Hypscher: Thijs has shown us the potential. Now, the harder question is, does it pay? Because no roof gets built on unless someone owns the risk and sees a return on it. So let's move from the city map to the balance sheet.

Patrick Hypscher: Our second guest today is an architect, uh, and he's very familiar with rooftop extensions for many, many years already. He founded UpFactor nine years ago to facilitate this transformation. UpFactor joined Polylogis Group, a major French social housing company that manages more than 150,000 homes. Welcome, Didier.

Didier Mignery: Hello.

[00:16:11] The business case for building upward

Patrick Hypscher: Didier, we'd love to hear your perspective from a owner and housing managing company. So what is the business case for rooftop extension?

Didier Mignery: Okay. Thank you for having me. It's a pleasure to be here and talk about a topic that it's me, absolutely critical for the transition to sustainable city. The core business case is very simple. It's about creating real estate value out of thin air, the cost of environmental impact of buying land. In traditional development, land is our highest cost. The rooftop extension, the land already exists, the roof of an existing building. So at a UpFactor, we look at this through a double dividend: financial and environmental. By building upwards you create new square meters in prime high-density location. For the owner you get high value real estate. For the existing co-owner, the sale of the roof rights can fully fund energy retrofits for the rest of the building. New construction finance the ecological transition of the old infrastructure. So it makes total sense in high-density and high-value urban areas, the market value per square meter is high, it easily absorbs the technical complexities of building on top of an occupied structure. It also makes sense when the existing building needs a roof repair or an energy overhaul anyway. So when it does it not make sense? In low-density areas where land is cheap, economics just don't work, if the existing building have severe, severe structural degradation. Yeah. Finally, if local zoning law, like the plan local d'urbanisme in France, are strictly prohibitive. So that's… I think it's the major picture of a business case.

Patrick Hypscher: Okay. So that sounds super interesting, and also thanks for the providing insights you described on a high level of when it makes sense and when it doesn't. So how do I specifically know for me if that makes sense?

[00:18:34] Scanning cities for hidden rooftop potential

Didier Mignery: It's a part of… me it's the first thing, it's to scanning the city, you know. And this is exactly where I created, when I created a UpFactor. Early on, we realized the biggest bottleneck to scaling rooftop extensions was data. Doing feasibility studies building by building manually takes months and costs a fortune. So we developed a proprietary 3D algorithm to- tool called a UpFactor GeoServices. It's a, a 3D, uh, tool and have algorithms scan entire city simultaneously using open data, 3D model buildings, and local zoning regulation. We analyze two main layer. First, the urban and legal layer. Does the local zoning law across allow an increase in height? The second is the geometric layer. What is the actual shape of and footprint of the roof? So by cross-referencing this layer, we can instantly tell a city or a portfolio owner exactly which building have a high potential. We turn a blind spot into a quantify, actionable asset class. The most common challenge is to… is the unknown history of old building. A building construct in Paris or in Lyon in, in nineteen and ninety w- does not come with its original blueprint, you know. And our digital scan gave us an incredibly precise statistical probability. Once a project is flagged as a highly viable by our software, we then step in with targeted physical audit. So it's easier. The goal of our data platform is to ensure you only spend money on physical engineering for buildings that already have ninety-five percent of chance of success. So that's, I think, the, the game changer with this application.

Patrick Hypscher: Okay, wonderful. And when you say success it's basically the commercial opportunity which is like creating an additional space to generate rent.

Didier Mignery: It's an opportunity to with some risk, and think for us, the opportunities are diversifying rapidly. For sure, residential is still the largest market because, uh, uh, penthouse apartments command a premium price per square meter, which drives strong and strong margin especially for social and intermediate housing type markets. However, we see a maji- a massive strategic opportunity today in the public building sector too, like, schools, you know, gymnasiums, and administrative building. Private owner are often afraid of mixing different use in one building, but public actors actually need to create this mix. It no longer makes sense today to design a public facility for a single use. A rooftop extension allow a local authority to add a floor for a nursery, a library, a community spaces or social housing, right where the needs are close to the citizens. The sector must lead by example, maximizing every vertical square meter to create multi-activity hubs. So, it's a good idea, but the risk profile is very different from greenfield development, you know. Your main cost drivers are your structural reinforcement, hoisting materials into dense environment, and managing logistic without interrupting the lives of the building below. But honestly the single greatest risk, it's not technical. Yeah. It's a social and stakeholder resistance.

Patrick Hypscher: And tell me more about this stakeholder resistance. So why do people resist these kind of building developments?

[00:22:49] Turning resistance into shared value

Didier Mignery: If you want to build on the top of an occupied building, the initial reaction of the resident is often noise, dust, scaffolding, and you're making money on your heads. No, thanks. The absolute key to mitigation is the equitable sharing of value. You know, you cannot treat this as a traditional top-down development. At a UpFactor, we facilitated a collaborative model where the financial value and social utility generated by the extension are split transparently. So in the private sector, the developer buys the roof rights, and this capital directly pay for the modernization of the building, an elevator or energy insulation. It's quite simple. The public sector, the financial gain helps fund the global thermal renovation of the school or the city hall underneath. So suddenly, the users and citizens realize that accepting few months of lightweight construction means they are building equipment, equipment is modernized, the city energy bills are redropped, new local services are created with zero extra taxes. When you transform a project into a direct benefit for the community, resistance melts away. So it's not a, a magical tool, but it's quite possible.

Patrick Hypscher: And it sounds a bit like talking to people, talking to stakeholders, listening to their needs, analyzing the situation, and then matching, let's say, the benefits of the rooftop extension and the financial benefits and how this can subsidize to solve problems the current tenants already experience. When we talked about main cost drivers and risks, you also mentioned, uh, other UpFactors especially logistics and also, like, the aesthetics, uh, of the building. So how to mitigate those?

Didier Mignery: You absolutely cannot use traditional construction methods in rooftop extensions. If you try to build a traditional concrete and brick structure on the roof, the weight will require a massive structural reinforcement all the way down to the foundation, which ruins your business case. So is where circular sec-circular economy principle, uh, specifically, specific, specifically, uh, off-site prefabrication, uh, modularity and materials, uh, complete, completely, uh, unlock the business model. At UpFactor, we strongly advocate for timber frame modular system. Wood is lightweight, about five times lighter than concrete, which means you rarely need heavily… heavy structural reinforcement. So because it's modular, extension is engineered and built in a factory offsite. So the module arrive on site fully finished with window insulation preinstalled, for example, a crane lifts them into the roof, and the structural shell can be assembled in a matter of day rather than a month. So radically, uh, lower on-site labor cost, reduce urban disruption so, a-and slash the project timeline. So it's a great benefit for, for people. And that is the second layer of, uh, circularity is designing for for construction and for deconstruction too. Yeah, the materials return their purity, the wood, the metal connectors, the insulation, they are not fused into a mono-monolithic mass of concrete rubble. So this mean the building extension itself hold a high residual material value for the future. We are tracking this material so that fifty or sixty years from now, this module can be adapted, transformed and cleanly disassembled and reused as well. I think it's a complete shift. We no longer consume building material. We store them temporarily in our urban fabric.

[00:27:15] What it will take to scale across Europe

Patrick Hypscher: Yeah. Didier, my last question is about scaling this because right now we are talking in times where like here in Germany a couple of days ago, the temperature went beyond 40 degrees and the next days we get close to that one again. And you mentioned at the beginning one of the main benefits is to use the, let's say, profits from rooftop extension for the energetic renovation of the building. So we, we need to scale it. We need that money. So what needs to happen to scale this?

Didier Mignery: Huh, difficult questions. So I think the physical and digital infrastructure is ready. The real bottleneck holding us back right now is a problem of collective will, a rigid mindset, and lack of qualified actors. The main issue is that there are almost no operators and especially no traditional developer capable to… of working in an occupied building on small scale assets combining AV renovation with innovative construction. For decades, the industry has been programmed for easy volume on empty land by flatten poor concrete. Today, with a very difficult economic context for developer, we could hope would change their model, but the reality is are afraid of the technical and human complexity of rooftop extension. They will not choose complexity by themself unless the market force them to. So let's be realistic. Rooftop extension will not solve the housing crisis alone. It's not magic bullet. By studying what we already have must be our top priority. Uh, we live in a world of limited resources and rising carbon emission. We cannot afford to build like we used to. In fact, rooftop extension is probably, uh, the lowest carbon development possible. Why? Automatically include proximity to urban center. The residents are already connected to existing public transport, job, activities, and leisure. So don't need to build new roads, new infrastructure or new utilities. We use the existing city. And this is exactly where the role of local elected official and city is essential. If mayor and urban planners stop urban sprawl, only allow the transformation of existing building, will not have choice. If rooftop extension becomes the primary legal and viable opportunity to build, the market will adapt naturally, and it will become the standard for everyone. So, to accelerate this moment, we need three things. First, a strong political will local leader to direct building rights only upward on existing structures. So second, regulatory agility to process these complex permits, it's the main thing, I think, and third, we do every day at a UpFactor, um, a change of perspective among large property owners. So they see their roof not as a leaking liability, but as a valuable asset to fund their own ecological transition. Sometimes we say, uh, the is not the limit, you know, and it's the opportunity. We have millions of square meters of unbuilt space right above our heads, so, uh, scaling is no longer, uh, an engineering challenge. It's a political choice and a necessary economic pivot for our industry to learn how to repair and build the city on the top of the city. So it's, uh, a good will, I think.

Patrick Hypscher: Didier, thanks for painting this picture of the future and naming the barriers we need to overcome. I can't wait to see this in reality. Thank you.

Didier Mignery: Thank you so much for having me. It was a wonderful conversation. So thanks a lot.

[00:31:45] Outro

Patrick Hypscher: That was the first episode of our series Rooftop Extensions. Thanks to Thijs Müller and Didier Mignery for opening up the case for building on top. In the next episode, we come down from the city map to a single courtyard in Dresden. Dirk Hengst added a floor to a two-story building while the family kept living in it. Lewin Fricke from TRIQBRIQ explains the block system behind it. Until then, keep pushing for a profitable circular economy. And please don't forget, your most abundant renewable resource is your imagination.