With the global wave of deindustrialization, post-industrial territories have seen local organizations supporting the preservation of industrial heritage. In several cases, these initiatives have met resistance from developers or state-led urban regeneration projects. Using the former textile neighbourhood of Bellavista-Tomé (Chile) as a case study, this paper analyses the combined effect of the site's morphology and agency of social actors, on the process of changing land use. The methodology used the notion of morphological regions to analyse the neighbourhood's urban morphology between 1970 and 2019, along with the discourse analysis of semi-structured interviews and secondary data to identify the agency of social actors. The conclusions indicate that, within the neoliberal urban development framework in Chile, the local government has played an ambivalent role regarding the preservation of the industrial fabric. This ambivalence has been greatly influenced by the intrinsic suitability of certain morphological regions for real estate development. The resulting problem threatens the preservation of industrial built legacy and the possibility of promoting urban development while maintaining the local social and cultural identity.