The increased involvement of the private sector in building sustainable communities is often met with skepticism from sustainability experts and academics. Although environmental experts and engineers may wish to focus on the technical design features and green rating of such projects to validate their sustainability, data are sometimes lacking, and social scientists may criticize projects’ social impacts and portray them as greenwashing sustainability. More holistic and evidence-based attempts are needed to understand post-occupancy performance in a way that targets the core obstacles to sustainability. This paper investigates the fundamental challenges of the market model of sustainable neighborhoods by using a qualitative post-occupancy evaluation method. We map core controversies through the lenses of different actors and ask how such challenges can be addressed in future developments. We interviewed 46 actors in The Sustainable City—a 590-unit residential development in Dubai. Through inductive analysis, we mapped five central controversies: The Branding Controversy; The Innovation Controversy; The Behavior Controversy; The Governance Controversy, and The Market Controversy. Such controversies appear fundamentally associated with the performance of privately developed sustainable neighborhoods. We present recommendations to resolve such controversies in future developments, including the clearer communication of goals and behavior expectations to residents, the ongoing education of residents, careful testing of technologies, the necessary steps by developers and local municipalities to promote affordability and equity, and resident representative committees in order to enhance civic agency.