Supported by federal funds, many eastern German cities have started to address their acute vacant housing problem, and the new strategies attempt to pursue revitalization in especially consistent and comprehensive forms. This article offers evidence that current policies are not meeting their main objectives. Very little is being done in the older, inner‐city neighbourhoods, although these have been given a top political priority in the planning process since they are perceived as one of the greatest economic and cultural assets of eastern Germany. Rather, the policies have been effective only in the large‐scale housing estates, where local administrations and city governments meet ‘big partners’ with resources for action. Further, it is argued that present policy strategies focus too tightly on housing market issues alone. Many housing problems cannot be solved using housing market policy tools alone as vacancy is caused by the general trends of depopulation and deindustrialization in the region.