The research in this paper explores the institutional changes in the housing system during the period of market transition in Bulgaria, which follow suit with the greater societal transformations. The societal changes are linked theoretically with Polanyi's understanding of the transition from a non-market to a market society. His argument helps in establishing the institutional context of the macroeconomic changes in the past decade. The article then focuses on the changing sources of housing inequality. It is argued that there are two urban regimes of housing inequality: the regime of controlled uniformity during the period of socialism and the regime of primitive diversity during the period of market transition. The two regimes are produced mainly through the changing role of the state.