The work towards global sustainable development is growing increasingly complex. Cities and the local urban scale have been acknowledged as important arenas towards sustainability; as they are actors contributing to high climate impacts and contain nebulous circumstances surrounding social orders due to rapid urbanisation. In response to the elaborate difficulties of achieving urban sustainability, Marc Wolfram (2016) conceptualised a framework for urban transformative capacity aimed at analysing and creating capacity for development. By applying relational ontology to a case study of Vallastaden, a newly built neighbourhood in Linköping Sweden this thesis has deepened the understanding of transformative capacity on a local scale. This was accomplished by scrutinising the planning and built environment of Vallastaden in the case study by applying semi-structured interviews, qualitative content analysis and a survey as data collecting methodologies.  The findings of the case study show that Vallastaden has been planned with care by focusing on the human scale and putting emphasis on building meaningful places and aiming to create social sustainability through many shared premises in the neighbourhood. The following six out of ten components of the framework for urban transformative capacity were made visible in the empirical data; (1) transformative leadership, (2) inclusive and multi-form governance, (3) empowered communities of practice, (4) system awareness and memory, (5) reflexivity and social learning and (6) urban sustainability foresight. Furthermore, the most prominent findings display the relations between the agency component (1-3), that the project of Vallastaden contributes to capacity development through social learning and a heterogeneous interdependence of relations between the shared premises and residents.