The European Union’s housing sector is a major contributor to energy consumption and emissions, making deep renovation essential for achieving energy efficiency and circular economy goals. However, 85% of EU buildings were constructed before 2001, and large-scale retrofitting faces barriers such as high costs, fragmented policies, and stakeholder misalignment. Bologna exemplifies these challenges due to aging buildings, socio-economic disparities, and inconsistent policies. This study employs a qualitative approach, integrating secondary data analysis and a Systems Thinking framework to examine deep renovation barriers. A Causal Loop Diagram (CLD) analysis identifies reinforcing market mechanisms and constraints such as high costs and policy instability. A Multi-Dimensional Matrix links these barriers to targeted interventions, including financial incentives, regulatory stability, and circular material adoption. By embedding circular economy principles, stable financing, and stakeholder coordination, this research presents a scalable policy framework to accelerate deep renovation across the EU, supporting climate targets, resource efficiency, and energy equity.