Based on a comparative survey of shanty towns and "social housing" complexes in the Metropolitan Region of Santiago, we characterize the decision to live in campamentos (shanty towns) as combining two, usually mutually exclusive, goals: an improvement in location within the city, and access to more formal housing. The fact that campamentos persist in spite of the massive production of state-subsidized dwellings, and that most of their residents are above the poverty line, support this contention. Campamentos do not fit the common idea of groups of poor households who have occupied land illegally as the only residential alternative and as the means of securing ownership of a formal "social housing" unit. This situation, unexpected by many, represents a challenge to current housing policies which tend to agglomerate social housing in the urban periphery, forming vast socially homogeneous or segregated urban districts where a ghetto phenomenon becomes embedded.