This article uses a social justice framework to problematize national and local policies in housing and education which propose to reduce poverty and improve educational performance of low-income students through mixed-income strategies. Drawing on research on Chicago, the article argues mixed-income strategies are part of the neoliberal restructuring of cities which has at its nexus capital accumulation and racial containment and exclusion through gentrification, de-democratization and privatization of public institutions, and displacement of low-income people of color. The ideological basis for these policies lies in racialized cultural deficit theories that negate the cultural and intellectual strengths and undermine the self-determination of low-income communities of color. Neoliberal mixed-income policies are unlikely to reduce inequality in education and housing. They fail to address root causes of poverty and unequal opportunity to learn and may exacerbate spatial exclusion and marginalization of people of color in urban areas. Building on Nancy Fraser's model for social justice, the article concludes with suggestions toward a framework for just housing and education policy centered on economic redistribution (economic restructuring), cultural recognition (cultural transformation), and parity of political representation. (Contains 8 notes.)