Housing estates represents a distinctive type of built environment with several specificities that stem from original modernistic concept and the system of mass housing production. These specificities reflect on technical standard as well as overall organization of urban environment, its legibility and social implications. The paper presents the results of comprehensive research project „Housing estates, what‘s next?“; and its application in experimental case study: masterplan for transformation of Housing Estate Spořilov in north Bohemian town Jilemnice in the Czech Republic. In the first part, general issues of housing estates, their underlying causes and specific effects of both spatial and social nature are identified. The second part indicates possible strategy that would take into account characteristic issues and limits of their possible transformation illustrated on case study project. Proposed approach builds a general spatial and organizational framework for gradual transformation into a legible urban environment, which creates basis for multiple small scale interventions. The set of tools for such interventions was developed during the research and was applied in the context of Spořilov. This process fosters continuity of overall management and flexibility in means of a long-term development. The complex nature makes housing estate transformation highly demanding in terms of management and communicative processes. Community consensus on general transformation framework of future development is necessary for general social sustainability of the area as well as for the project feasibility.