Abstract Social Housing Retrofit offers positive social, financial and health improvements for low-income populations. However, the stakeholders in such projects might have conflicting needs and interests, thus hampering the retrofitting process. Living labs can play a vital role in supporting mediation amongst stakeholders and thus help alleviate such challenges. Living Labs (LLs) are user-centred initiatives for the development of innovative solutions in real-life contexts through a collaborative process. User involvement is vital in the LLs’ innovation process. This paper describes the setup of a Social Housing Retrofit LL from a methodological perspective. Existing literature reporting LLs often lacks clarity on its description of the LLs underlying methodological approach. The main contribution of the paper is to depict the living lab as a method based on the social housing retrofit context. The proposed solution i.e., the LL methodological approach, is described at a detailed level, including its main activities, and expected outcomes. The approach can bring together residents and other stakeholders, leveraging knowledge sharing, collaboration, and co-creation through their involvement in the retrofit process. The solution is evaluated in contrast to existing literature, and it should be implemented in the future throughout the development of an ongoing research project U-VITAL.