In the era of transition to a low-carbon economy, optimal use of the developmental resources within urban regions expresses the need to limit suburbanization and increase the energy efficiency. Solutions are sought as an alternative for the suburban housing estates embodying the image high-quality life in the American Dream style. Aspects of the urban innovation, serving the public sector as a tool for improvement of the quality in residential environment, are considered in the article. Selected examples (mainly German) are described with reference to 1) the changes in the standards of housing development, 2) large-scale renewal programs for residential areas, 3) development and dissemination of urban design (the technique). The interaction between scientific research and the implementation sphere, remaining in the hands of local governments, is important here. Synergy, at a local level, is of key importance in at least four aspects in urban development: 1) solving complex, atypical problems, 2) the public sector being a strong (independent) partner, 3) adaptation of foreign concepts, from other planning systems/cultures and morphologically different urban structures, 4) strengthening the position in relations with the EU.