There is a need to develop attractive alternatives to suburban living in order to cater for the increasing number of small households in cities. This paper examines the potential and suitability of tenement housing constructed to the Passivhaus Standard from pre-fabricated cross-laminated timber. There is lack of in-depth understanding of the performance of both massive timber and the Passivhaus Standard in the context of Glasgow. The present work tested the affordability, construction feasibility and environmental performance of a hypothetical Passivhaus Tenement prototype in the context of local climatic, economic and legislative conditions. The prototype is based on the Scottish Building Standards and the Passivhaus Institute guidelines. The Passive House Planning Package (PHPP) and the Standard Assessment Procedure (SAP) were used to test Passivhaus compliance in urban situations and configurations; and to compare the prototype’s energy demands to the following options with identical external dimensions: 1) original tenement, 2) refurbished tenement 3) Scottish Building Standards compliant tenement. The challenges and possibilities of upgrading existing tenements to the Passivhaus standard were assessed. An insight is provided into the potential for adopting the Passivhaus Tenement as an affordable housing model.