The small towns of North-Eastern Germany suffered great losses in historic buildings and economic dynamics during the Second World War and the subsequent decades of communist rule. Since 1990, these communities have suffered a major decrease in the number of inhabitants, resulting in a large number of buildings being empty. To adjust the urban structure to twenty-first century standards and regain economic vitality, both regional and local governments are supporting urban renewal projects. Sites inside medieval town centres are under pressure to amalgamate and be recreated as large-scale developer architecture or to fall into ultimate decay. As part of the study of medieval urban structures, a study of the site of the former Holy Spirit Hospice (Heiligengeist-Quarter) of Woldegk has been carried out. This paper shows how contextualization and a re-definition of the site, based on historic narratives developed by morphological research, inspired authorities and stakeholders to initiate a narrative-based development of the site. It demonstrates that urban renewal, based on historic narratives, creates wide public support for contemporary redevelopment in small urban communities. It further shows how morphological research is contributing to the establishment of relevant narratives.