<p>Buildings account for about one third of greenhouse gas emissions in Germany, but the sector faces enormous decarbonization challenges. Because the sector’s governance has often been neglected, this paper focuses on politico-administrative actors and their challenges in advancing climate and energy-related building modernization in small and medium-sized municipalities where many public buildings require modernization. Drawing on participant observation and co-production with local politicians and street-level bureaucrats from twelve municipalities in the federal State of Hessen in Germany, we develop a new typology of actors in building modernization and unpack a range of challenges whose precise characteristics tend to differ by municipality size. Importantly, most practitioners highlighted governance issues rather than the better-known technical challenges of building modernization. Solutions likely involve tailor-made approaches that fit individual contexts; while important, the challenges cannot be reduced to a lack of money and personnel alone.</p>