The neighbourhood GMS in Heerlen-Noord, the Netherlands, is currently struggling to overcome its socio-urban challenges due to the historical context. Placemaking and Urban Living Labs as concepts both offer potentials to address the current socio-urban challenges, by explicitly involving students. In fact, this paper shows that while drawing on both including an inclusive co-creation process and co-designing a local intervention in place, local transformation can be experimented with as aspired by the community. Hence, providing an alternative spatial planning approach for urban contexts with extreme social-cultural conditions. The paper also shows the relevance of ULLs as an infrastructure to accelerate urban transformations as well as facilitate innovation in education that encompasses the four components of the social learning theory by Wenger (1998). As such, it addresses practice more appropriately and enhances student learning through transdisciplinary collaboration among urban stakeholders involved and by connecting education, research methods and questions, and real-life socio-urban challenges.