This paper presents a case study using calibrated numerical models to evaluate the thermal impacts and long-term sustainability of intensive geothermal use on a neighborhood scale. The subsurface heat transport model is configured with site-specific parameters and validated against monitoring data from a typical urban living quarter in Germany. Based on the simulated ground temperature profile, the heat pump performance is approximated. In addition, the effects of groundwater flow on the thermal interaction and economical operation of the shallow geothermal systems are examined. The results indicate limited thermal impacts as the groundwater temperature will maintain above 3.2 °C and that the area undergone severe temperature drop is less than 1% size of the neighborhood. Since the estimated seasonal coefficients of performance (SCOPs) are at least 3.8, the sustainability of the shallow geothermal applications is confirmed economically. Nevertheless, financial disadvantages up to 92 € year^-1 are anticipated due to gradual efficiency losses of the heat pump, which are meant for the owners of downstream installations. In addition, uncertainties in groundwater flow rate are also analyzed. For the negligible advection case, simulation results suggest that some systems can only operate sustainably for eight years. Conclusions are drawn regarding the general feasibility of neighborhood-scale shallow geothermal utilization and the importance of hydrogeological site investigations during the planning phase of such projects.