The ISOLAx project is an innovative urban regeneration initiative designed to tackle the intertwined issues of housing inadequacy, social fragmentation, and economic decline in Taranto’s historic Old City, an area plagued by vacant buildings and precarious living conditions. The project’s main objective is to establish a viable pathway to rehabilitate underutilized public buildings into inclusive housing for a diverse population. Key innovation drivers include a modular construction system using repurposed maritime containers and an innovative mixed-tenure rental model with cross-subsidization. This approach is expected to deliver approximately forty modular housing units, significantly reduce carbon emissions and construction times, and foster long-term social cohesion. Ultimately, ISOLAx offers a replicable blueprint for sustainable urban living that generates over €2.5 of social value for every euro invested.