In Budapest, one third of the population lives in large prefabricated housing estates. Therefore, this Modern heritage of the Communist period is one of the key issues of sustainable urban development. The majority of scientifi c studies on mass housing focus on economic and social aspects, so this research intends to approach the subject from the built-up environment. Taking the people's needs and Budapest's specifi c situation in relation to the challenges of sustainability as a starting point, the paper attempts to use the back-casting method based on social, economic and environmental trends. Defi ning a theoretically desirable future for this dominant type of urban housing, the analysis works backwards to understand their principal historic turning points. What are the values of large prefabricated housing estates? What were they, and what could they be? How can this modern and open urban form be sustained? What elements of the existing built environment will disappear, and what can be adapted in the transition process? By introducing three different scales -city, neighborhood and building, along with their subcategories -it is possible to recognize the effects of changing socio-economic conditions upon the built context and indicate problem-oriented, locally-minded interventions.Keywords: housing estates, urban renewal, Budapest, sustainable urban neighborhood, assessment indicators, urban history One of the biggest transformations of urban social fabric in Central and Eastern Europe (CEE) came about through the construction of large prefabricated housing estates. In Hungary, the mass housing policy utilizing prefabricated technology was initiated with the help of the fi rst fi fteen-year housing policy 1961-75 and the second fi ve-year-plan development project 1961 -65 (Körner 2006. In the politically and economically divided Europe of that time, professional refl ection on modern housing and planning solutions remained absolutely international. France, the United Kingdom, Scandinavian countries and the Soviet Union were principal reference points for the Hungarian stakeholders. Following guidelines fi rst from the International Congresses of Modern Architecture (CIAM), which operated between 1928-59 (for example, the La Sarraz Declaration from 1928, and the Athens Charter from 1933), then recommendations by Team 10, as the