Based on a study of social housing allocation practices in a French housing estate, combining archives, interviews and statistics, this article looks at the class and racial categorisations that guide the practices of street level workers and their segregating effects. It first shows that these practices are a source of discrimination for the most precarious groups within the working class, namely for single women with children and for racialised minorities. By paying attention to the scale of observation, this article emphasises above all that rental management logics, which give a premium to the local integration of tenants, can lead to the transformation of certain racialised minorities’ disadvantage (particularly for those of North African origin) into a resource for accessing the most valued housing in the local space. In doing so, this paper suggests that the racialisation of housing policy is not only based on the mobilisation of culturalist schemes attributing behaviours to certain social groups, but that it can also refer to other logics in which racial assignment, mixed with religious identification, is associated with a form of local respectability. By conferring an indigenous capital on stable but racialised groups within the working class, these housing policies thus offer opportunities for residential upward mobility at a local level. However, combined with the discriminatory mechanisms also described in the literature, they also tend to reinforce racial segregation at level of the metropolis.