In Europe, urban peripheries that host public housing estates are often inhabited by a diverse population, including many migrants. In those places, far-right parties enjoy growing electoral support. This paper asks, Can expansionary public housing policies boost the electoral support of far-right parties in diverse communities? I exploit the staggered roll-out of a French public housing policy to show that residents of municipalities with large pre-policy immigration shares vote more for the National Front in response to public housing expansion. The opposite happens in municipalities with low pre-policy exposure to immigration. The paper investigates three candidate mechanisms; compositional changes, material grievances, and latent group conflict. Separate empirical analyses of sociodemographic, housing, and newspaper data suggest that the third mechanism may drive the results. The paper further discusses the theoretical and practical implications of these findings for understanding the challenges of adapting the welfare state to increasingly diverse societies.