Housing allocation principles stipulate who and under what conditions one can obtain housing. Although housing policies should be considered an integral part of welfare states, they differ from other welfare components due to their dual nature—being both a public good and a private market commodity. This article has a specific focus on the subnational level, exploring aspects that intentionally or unintentionally challenge fair housing allocation and work to exclude the settlement of vulnerable groups. We focus specifically on four dimensions in 1) explicit exclusionary policy aspects, 2) economic aspects, 3) social dumping, and 4) regulatory ambiguity.