In Estonia, as in many Central and Eastern European (CEE) countries, the housing reforms conducted after the collapse of state socialism have been characterised by a wholesale withdrawal of the state from housing provision (ownership, maintenance and allocation of housing) and an increase in homeownership. In the housing market that has emerged, the possibilities for households to access better housing, keep their present unit or improve their housing quality depend on their incomes. Since income inequalities have also become substantial (Mikhalov 2000), published research on post-socialist cities (e.g. Sailer-Fliege 1999; Sýkora 1999; Pichler-Milanovich 2001) unanimously agrees that one aspect of the transition is increasing residential differentiation, i.e. more unequal distribution of social groups within a city (as well as within an urban region).