"In January 2005, the ODPM unveiled its Five-Year Plans for housing and for neighbourhood revitalisation in two companion documents, Sustainable Communities: Homes for All and Sustainable Communities: People Places and Prosperity. Key objectives in the second include: ""Faster progress to narrow the gap between the best and worst off to make sure opportunity and choice are for all, including a new more radical approach to renewal in a small number of very disadvantaged areas with the aim to create neighbourhoods with a more sustainable mix of tenures and incomes and address the problems of worklessness, skills, crime, poor environments and poor health."" This paper considers the problems associated with developing mixed communities. Even if everyone agrees that mixed communities are desirable as a way of reducing poverty and improving social justice, there are very good reasons why it is difficult to achieve this goal. In this paper, the results from a recently estimated model of the English local authorities and wards are presented. The model demonstrates how processes of economic segregation emerge, concentrating on the interrelationships between local housing markets and migration. From the model, a set of controversial policy proposals is put forward that attempt to maximise the probability of success in developing mixed communities. Instruments of Spatial Planning Policy for Modernizing Economic Structure. "