This study proposes an analysis of Latin American metropolises through the lens of a relatively recent phenomenon in Chile: the ethnification of social housing complexes. The analysis is illustrative of the multifaceted dimensions of indigeneity in urban contexts, particularly considering the prevalent neoliberal conditions of mass production of social housing, which is often subsidised by the state, in numerous Latin American countries. This study draws on two ethnographic investigations of the same housing complex, “Villa Bicentenario ii” in Cerro Navia (Metropolitan Region of Santiago, Chile). It aims to examine how the production of indigenous social housing complexes can be understood as the expression of three concurrent themes: the normative and strategic adequacy of a housing policy, the role of indigenous communities in the production of space, and the negotiation of ethnicity in the context of urbanisation. This policy is enacted under a new multicultural approach. Ethnicity is employed as a negotiation resource against a housing policy that homogenises the production of space on the outskirts of large cities. Furthermore, the re-articulation and spatial projection that displaced indigenous peoples develop in urban areas extends beyond the sphere of housing and the nation-state.