Numerous studies have been devoted to documenting the shifting patterns of ethnic segregation in the cities of the Netherlands during the past few decades. But an analysis of residential mobility that would reveal the mechanisms of change has rarely been included. In this paper such household mobility is studied against the background of the current urban restructuring policy. This policy consists of the selective demolition of inexpensive rented housing and the construction of homeowner dwellings in its stead, leading to changes in the social make-up of neighbourhoods. The change is caused by the displacement of ethnic and other low-income households, the result of their decisions how to use the incentives to move offered by the policy. Thus, this paper deals with the question how urban restructuring affects segregation patterns. Ethnic and socioeconomic variables are at the core of the analysis. The outcome is that while the social make-up of neighbourhoods is altered, and low-income households shift in space, the displacement does not contribute to desegregation. Every city has neighbourhoods where low income households are concentrated. A low income might result from unemployment or from having a low-paying job. In many cities, ethnic minority groups are overrepresented among low-income households. Many of the neighbourhoods with a poor population also suffer other social ills: high crime rates, loss of a sense of safety, poor quality of the (social rented) housing stock, derelict public spaces. Such areas are described as deprived, disadvantaged or distressed (Andersson & Musterd 2005; Dekker 2006; Van Kempen et al. 2006).