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Housing studies in Chile have focused on unequal access and segregation. Less attention has been given to subsidy selection system policies and its consequences. This article reviews chilean housing subsidy policies, levels of focalisation and its effects on spatial and social configuration in neighbourhoods, between 1980 and 1997. When higher levels of focalisation are identified, there is a lower social organisation, diminished rooting in housing complexes and fewer expectations for change. This entails further deterioration of urban space and difficulties towards implementing improvements. Therefore, focalized housing subsidies deteriorate social and spatial articulation of the neighbourhoods. [ABSTRACT FROM AUTHOR]