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The Danish social housing sector is currently being restructured by national strategies that seek to combat so-called “parallel societies”. These strategies entail especially two things: (1) tearing down and/or privatising social housing in marginalized and vulnerable neighbourhoods and (2) repressive strategies of governance which focus on ethnic minorities, restricting their choices of schools, kindergartens and interactions with social services. Based on mixed empirical materials in the form of policy documents and qualitative data from several localities in Denmark, the purpose of our paper is to critically explore and analyse these policies, focusing on how local community workers and residents react. Our argument is that despite strong attempts to enforce top-down repressive and discriminatory policies, the “ghetto” continually “strikes back” in a double-sense: Firstly, the Danish policies meant to combat “ghettoization” and “parallel societies” re-create these as statistical (and governable) categories, and secondly, local housing organizations, community workers and residents engage in a struggle from below where they employ tactics to resist the most repressive elements of these urban policies. We show through empirical examples how this struggle from below generate resistance in three forms: they rework classifications and understandings of the neighbourhood, attempt to generate resilience and increase coping of marginalised groups facing recent tendencies to a more punitive state, and mediate and translate in active forms of resistance of residents rewriting scripts of citizenship. We argue that these forms of resistance attempt to change state space production from within.