||Urban development in general and the housing market in Eastern Germany in particular have experienced unprecedented changes since the reunification of the two German states in 1990: Significant structural economic and demographic shifts led to a downturn of the entire urban development process in many towns and cities. Initially, historical housing stock in the inner city centres suffered most from high vacancy rates. As a kind of second wave of these developments, suburban and large industrial housing estates were affected by the consequences of widespread economic and employment problems and a subsequent population decline due to migration and lower birth rates. In addition, the close-down of essential public infrastructure and other public services became inevitable in many places and contributed to the tense situation (BMVBW, 2000). The City of Erfurt, federal capital of Thuringia, has also been challenged by these developments and their spatial implications in various ways (Allin, 2001). In 1999, for example, the mean vacancy rate in all large housing estates in Erfurt was at 14.5% and – without further action taken – projected to rise up to 44% in 2020. So far, a number of strategic policies have been set up in order to address the problem. Due to comprehensive measures of demolition targeted at unneeded housing stock within the urban area, vacancy rates in the nine urban districts with large housing estates have dropped significantly to 8% in 2005 (Werkstatt Stadt, 2011). Over the last couple of years, the city also managed to stabilise its demographic and economic development. This success is partly due to Erfurt’s particular situation being the capital of the federal state and, thus, covering a number of central services and important administrative functions, which helped to sustain the local economy (Erfurt, 2011). More than 20 years after the reunification of Germany, a closer look at how the City of Erfurt has changed its approaches and tactics in terms of coping with city shrinkage and a declining housing market reveals a variety of interesting aspects. Erfurt is still confronted with the consequences of an on-going population decline and, accordingly, the need for re-adjusting local strategies in a very flexible and responsive manner. Further changes as well as more or less insecure and instable urban development conditions have to be anticipated as major trends in the wider city-region. The present paper aims at challenging the existing portfolio of housing market strategies and urban redevelopment policies in the City of Erfurt and, in particular, focuses on an in-depth investigation of the overall suitability, prioritisation and integration of specific objectives and measures targeted to provide a sound basis for sustainable urban development and (re-)balancing the city-wide housing market in Erfurt in the longer term.