This chapter focuses on the consequences of restitution for urban and housing development. It argues that restitution has important implications for the housing provision system, since it is one mechanism for transformation of the 'communist' property system into a 'market-based' one. In East Germany a comprehensive legal framework for restitution was established at the beginning of the 1990s with the Property Law where the primacy of 'restitution rather than compensation' was set up. Restitution is predominantly legitimized on functional as well as on moral grounds and therefore poses questions about the legitimacy of property rights and the direction of the privatization process itself. Restitution should address the injustice of expropriation and confiscation of private property by returning it to its legal owners. The evolving public discourse has centered on the functional as well as the moral aspects of restitution policy.