This dissertation explores partnership-based urban residential development processes which aim towards achieving greater sustainability. Urban development is a complex phenomenon and involves a multitude of participants. Also, sustainability is a complex concept. The problem field, combining the two, is a real-life challenge which the research approaches with a pragmatic view. The primary investigation method of the study has been a multiple case study using both an action research case study approach and observatory case study approach. The study suggests that Public-Private-People Partnership, a framework developed during the research, is a social innovation that improves the viability of technical and economical solutions in urban development, and it is these solutions that contribute to greater sustainability, especially low-carbon solutions that are considered a most urgent sustainability issue within the built environment. During the research, examples of these solutions were a viable development-wide geothermal energy solution and economical scenarios which enabled low-carbon refurbishments by redevelopment. The evidence has been gathered from two complementary residential development cases in the Helsinki region, Finland. The data includes both qualitative and quantitative data. As the carbon challenge and the operating environment in urban development are rather similar in western market economies, the findings can be generalized elsewhere. Theoretically, the study places the urban development process between urban planning and property development theories and introduces urban development as an open social system according to systems theory. This allows research to examine not only the parties present in urban development but also the relationships between them and the sustainability aims. The research suggests that a concept of customership emerged in the research that can be useful in explaining the relationships between Public, Private, and People parties. Besides the findings, the study presents an emerging theory for considering urban development. The theory holds that Public, Private, and People parties enter urban development processes under different rationalities in order to reach their own various targets.