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Based on a case study in Halle-Neustadt, this chapter examines the changing configuration of social housing provision in a paradigmatic shrinking city in East Germany.

Social housing is under pressure in East Germany due to three developments. First, ‘social housing’ in Germany has always been a temporary affair such that the number of social housing units is decreasing rapidly all over Germany; this development is particularly pronounced in East Germany where most cities are struck by deindustrialization and poverty, and lack the resources for new social housing subsidies. Second, privatization has led to a reduction of the municipally and cooperatively owned housing stock and a growing relevance of financial investors. Third, most cities in East Germany have experienced severe population losses; this has stimulated ‘rightsizing’ policies and 350,000 housing units have been demolished since 2001. These three developments produce new concentrations of households living in poverty, accelerated downgrading and a crowding out of the poor to the least attractive parts of the city.

The chapter demonstrates how developments in different sectors result in the marginalization of impoverished groups in a low-demand environment. It emphasizes the interplay of planning strategies, housing privatization and changes in welfare provision which have had limited research attention.

This is the first study of the changes of social housing provision in the East German context characterized by deindustrialization, low demand, privatization and financialization.

This article describes a current dilemma of urban planning in cities of the former German Democratic Republic (GDR). The process of demographic shrinking, and the increasing growth of the more privileged to suburbia since the early 1990s had dramatic consequences, especially on cities with large-scale settlements (Großsiedlungen) that once had been built especially for sites based on heavy industries. This paper argues that far from the banal, grey and depressing stigma attached to them at present, some of these housing projects, particularly the one for Leipzig-Grünau represented one of the most enthusiastic experiments to realise societal utopias. The study looks particularly at the role of residents' participation in the success and development of their estate. However, at the moment when buildings are being demolished public participation in determining the fate of their urban environment, seems futile and redundant. These often random and short-sighted demolitions undermine the housing estates' cohesiveness, which in turn helps to dilute the residents' sense of pride and privilege. It seems almost as though population ‘shrinking’ was part of a plan to re-appropriate the city by erasing the ‘unfamiliar’ fabric of a competing ideology. The paper investigates how this process is played out, what form it takes and how the configuration and coherence of the urban fabric is affected by a complicated sequence of chain reactions which degrade the attractiveness of the area to such a degree that demolition appears as the only possible solution. An intentional cultural-political policy of de-familiarisation takes place and demolition is made to appear all but unavoidable.