Based on a long tradition of municipal land purchases, today 70–80 percent of housing development in Stockholm takes place on land allocated by the city. To densify the urban core, several larger developments are being realised on brownfield land. Norra Djurgårdsstaden is one of the most attractive development areas and ambitions regarding environmental sustainability and design are high. The Stockholm municipal plan states that affordable housing and social mix are important public goals. Land policy is mentioned as one of the main instruments to realise these goals. Simultaneously, Swedish housing policy emphasises ‘good housing for all’ and does not prioritise lower income households. Affordable housing is defined as rental housing irrespective of rent level. Recently, critic has arisen that Norra Djurgårdsstaden is only accessible to higher income households in contrast to city policy goals. This chapter attempts to explain incentives of the city to avoid fulfilling its own policy goals, linking this paradox to planning and land policy on the one hand and housing and fiscal policy on the other hand, showing how varied public interests are difficult to balance. Several other Swedish municipalities face the same difficulties in using land policy to meet affordable housing and social mix goals.