In European countries property development has to take place within the frames of public planning regulations. The character and strenght of the public regulation may vary considerably from country to country, but generally they must be considered as a tool to pursue the spatial development policies of the planning authority. Traditionally, functional and aesthetic matters have been the core focus of spatial planning and tools have been developed to manage this challenge. However, spatial planning faces a much broader range of challenges including the ability to facilitate growth and sustainability. Furthermore these policy areas have to be integrated in such a way that the outcome is a relatively clear information to the landowners, how they are supposed and/or allowed to develop their property. In most countries the responsibility for the spatial planning is decentralized to local and regional political authorities and the facilitation of growth in the local or regional economy is given a key priority on the political agenda. Economic development strategies and spatial planning are linked together: this calls for a coordination with some specific tools and mechanisms. Furthermore, the overall development has to take place in a sustainable way. Speaking of sustainable development in the field of spatial planning means to solve the relationships between environment, development and economic growth by superseding the specific approaches with more integrated methods. The EU policy is stressing the environmental considerations in a very concrete way by virtue of the EIA- and SEA-directives, demanding that projects, programs and plans have to be subject to environmental assessments. The SEA-directive is putting this demand directly on the individual planning authorities so the provision of all local and regional plans have to conform to the procedures prescribed. Meeting the extended challenges is obviously a task for the planning authorities and with it the public sector. However, it will also influence the private sector as the demands and policies inevitably will affect the planning regulations and the interplay between public and private actors. Based on Danish and Italian experiences the paper aims to explore the main challenges in urban development and to provide a conceptual framework for these challenges, mainly from a sustainable land use management point of view. Next, the paper aims to outline the strengths and weaknesses of the two countries' planning systems facing these challenges. Finally, the paper will try to identify necessary urban development tools to implement sustainable spatial strategies and to facilitate the interplay between the land owners and the authorities.