The 21st century has brought fundamental changes in the development of cities, with the spread of ICT and the rise of digitalization. The new technologies are increasingly making their mark on urban planning and policy as well. The question of how contemporary urban planning is adapting to new challenges is particularly relevant as neighborhoods built in previous centuries and decades by traditional planning methods are now increasingly confronted with new public and environmental demands. Despite the bad reputation of Budapest’s 8th district, Józsefváros, based on the socio-economic and urban problems it has continuously faced in the past, the neighborhood has become one of the most dynamically developing urban areas in the last decade. From a planning point of view, an exciting area of the district is Szigony Street and its wider surroundings due to the strongly fragmented, heterogeneous urban fabric. Nevertheless, the only high-rise mass housing estate built in Budapest’s historic inner city in the 1960s and 1970s is located there. Our research used a complex methodology (document, content and database analysis, fieldwork, surveys with professionals, and interviews) to explore the planning history of the area’s development. Ultimately, the aim was to identify the most important outcomes and consequences of traditional and contemporary planning and design and whether modern digital planning can make a meaningful contribution to the development of the neighborhood. Our results show that urban planning and development in Budapest are still essentially based on traditional top-down approaches. Digitalization has a role to play primarily in visualization and contextualization but digitalizing of planning alone will not solve problems and past planning mistakes that affect the urban fabric of a neighborhood.