The exploratory study Smarte Modernisierung Terrassenhaussiedlung – SONTE has the goal to develop a general guideline for assessing the modernization possibilities of participatory inventory designed residential buildings. The Terrassenhaussiedlung Graz-St. Peter serves as a development and test bed at the same time. The development of the guideline is shown exemplarily and objectified for transmission to other residential buildings. The focus is a comprehensive, holistic approach including ecological and social sustainability. The Terrassenhaussiedlung in Graz-St. Peter is the largest and internationally best-known housing estate of Styria. At the same time, it is the largest owner-management unit in Austria with more than 500 apartments and more than 1,500 residents. After 40 years of use, the issue of modernization in terms of energy and sustainability must be assessed. The progressive nature of constructing the Terrassenhaussiedlung carries a high potential for an integrated modernization concept. The innovative approach of participatory involvement of residents in the development of social housing is unique. By using modern participation techniques, the existing community will be re-enabled to connect with key stakeholders and intensively involve them in the drafting of the modernization concept. As relevant fields of action, the focus is on the building and energy, green and open spaces, urban mobility as well as information and communication. Thereby, the necessary consideration of the settlement as a whole system in terms of energy, structural and social issues is possible. Due to the strong interaction and networking of the different areas, the optimization of the individual solution is achieved.