Abstract: From its commencement in 2002, the redevelopment of the Kensington public housing estate in inner Melbourne was seen as as “a test bed for future inner city housing management” (DHS, 2002). The ‘Kensington model’ involves a public-private finance mix in which the state demolishes old public housing, contracts a developer to design and construct new public housing, and sells part of the estate to the developer for private housing. It delivers a housing mix in which the public and private units are intended to be indistinguishable, and introduces social mix onto the estate. The Kensington model formed the basis of the redevelopment of the inner Melbourne Carlton estate in 2008, and is currently informing master planning processes for the nearby Fitzroy, Richmond and Prahran estates. In 2011, researchers from the University of Melbourne were invited by the Victorian government to evaluate the Kensington model for its value for money for the taxpayer and advise on the merits of its application to other estates. They reported in mid-2012 that the model was not good value for money and advised that it should not be reproduced in the same arrangement. Instead they recommended a range of alternative financing arrangements including partnerships with not-for-profits and utilisation of a public land agency. More than a year later the report had not been released. This paper discusses the role of social mix in rationalising public-private financing arrangements, and reflects on the application of this model to other Australian inner city housing estates.