This paper explores the spatial and residential impact of social-mix and urban renewal policies in large French social housing estates. Tenure diversification is one of the drivers of a privatization process that is leading to an increase in private housing, especially home ownership developments. The wholesale urban restructuring of the modernist conception of high-rise buildings and open public spaces of the 1960s provides another vector. Analyzing the implementation of these two national strategies at large housing estate micro level—partly at La Duchère housing complex in Lyon—sheds light on how the design and location of new housing developments results in fragmentation of “residences” and space. To a certain extent, these social-mix policies exacerbate internal socio-residential differentiation by simply “displacing the stigma”. What is new is rescaling at the level of small “residences” and gating of housing more than the segmentation process itself, which already existed in large housing estates. At the micro-level of large housing estates, this challenges the standardization of urban and social practices through design, the “residualization” of social housing and public space as well as the public management of fragmented space. In a broader context, these changes show how the recent shift in the French social housing model has been embodied in spatial reconfiguration.