In recent times, despite the importance of historic urban quarters in the sustenance of ancient cultural heritage, planned modernization of urban areas usually neglects these culturally sensitive areas. Resulting in relocations and perceived dissatisfaction of its residents, this reported negligence is partly the result of a dearth of research exploring the multi-dimensional evaluation framework for assessing the long-term environmental, economic, social, and cultural aspects of residential satisfaction in historic urban quarters. Hence, the aspirations, needs, demands, and desires of the residents of historic urban quarters are not readily known to policy makers; neither is these needs, desires and expectations are well established in the residential satisfaction literature. The essence of residential satisfaction research is not merely to report the current living situation in a given residential environment, but also to pinpoint which facets the municipal governments must enhance to improve homeownership and rental rates, amongst others. Most of the studies on residential satisfaction merely focused on the social sustainability dimension, therefore, not acknowledging the salient roles, environmental, and economic concerns play in boosting the satisfaction levels of residents of historic urban quarters. Thus, this study aims to fill this gap between theory and application of the sustainability concept in addressing practical problems of relocations and perceived dissatisfaction amid residents of urban culturally sensitive areas. It fills this gap by assessing the perceptions of residents and non-residents on the importance of the determinants of residential satisfaction in a historic urban quarter. Regarding this, a comprehensive list of 32 potential sustainability performance factors (SPF) was determined through an extensive review of related literature, based on which a questionnaire administered to 245 households residing in the historic urban quarters of the Walled City, Famagusta, North Cyprus. Also, 167 households residing outside of the quarters, to assess their perception of the criticality of the identified factors, as well as examine the agreement levels in the opinions of the two participant groups. Using principal component analysis (PCA), the 32 different factors were narrowed down to eight. The study findings show that “Cost of housing” and “Suitable Management rules” are the most critical factors with relatively high overall scoring. Findings reveal that residents’ perceptions differ significantly based on participants’ ethnicity, while there is no significant difference based on the profile of residents/social class. This study argues that clearly understanding the criticality of the factors impacting satisfaction in housing and the residential environment is crucial for planning sustainable regeneration and revitalization programs in any HUQ. The findings of this study would be useful to housing policy decision-makers, urban planners, and municipalities to understand better the residents’ needs that could aid the sustenance of historic urban quarters. The authors suggest the adoption of the framework developed by this study as an analytical, research, and assessment tool in future housing satisfaction studies in different contexts.