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During a period of some 26 years (1980 to 2006), more than five hundred thousand social housing units were built in Chile. This mass production effectively reduced the accumulated housing deficit and was the result of a housing finance mechanism - a state subsidy awarded directly to construction companies -, a model which has been widely replicated in other countries in Latin America. This article responds to the question of how a successful policy came to be a failure in terms of housing and urban issues. After more than thirty years, it has become clear that social housing policy in Chile was not exactly so: it was merely a policy to finance the construction of cheaply-made housing units at a low-cost. The policy that resolved the former problem of those without housing (los sin techo) created the new problem of those with housing (los con techo). Due to this situation, we review the history of this housing subsidy, the different types of housing complexes that were produced, their location, and the problems around coexistence that have arisen in these complexes. [ABSTRACT FROM AUTHOR]