When cities started shrinking, governments felt they had to do something. Where the main reason for shrinking was the closing down of traditional industry, economic policies were the first to be introduced: first by subsidising and reorganising existing companies, later by trying to create a more diverse employment structure. Gradually it was noticed that these policies did not always work and subsequently new policies, including social and housing market policies, were introduced. These could build on a framework of social and housing market policies that already was in place. Path dependency theories can lead to a better understanding of what goes on in different countries and cities. In this paper, a literature study into path dependency theories and their application to housing policy studies will result in an attempt to apply this policy framework to shrinking cities. Existing case studies (into the Manchester/Salford Housing Market Renewal Pathfinder and the IBA Emscher Park) will now be viewed in the light of path dependency theory.