Nearly 40 years after the first wave of Ethiopian immigration to Israel, the country’s Ethiopian population still suffers from significant socioeconomic disadvantage: Many of its members live in highly homogeneous poor neighborhoods, which expose them to a variety of negative externalities. This study is the first to examine empirically the impact of Israel’s policy of absorption and spatial distribution on the formation of homogeneous ghettos of Ethiopians, and the contribution of the government’s major housing assistance programs for Ethiopians to solving or exacerbating this problem. The study, structured into four main stages, embraces a mixed-methods research approach drawing on diverse theoretical and methodological frameworks. In the first stage, we use descriptive statistics to introduce the current characteristics of the Ethiopian population in Israel and compare them with those of other marginalized social groups. In the second stage, we analyze the government’s various housingassistance programs for the Ethiopian population, focusing on three flagship programs. The third stage analyzes the spatial outcomes of the primary housing-assistance program, which remains active to date. Lastly, through in-depth interviews with policymakers and Ethiopian leaders, we delve into the underlying considerations that lay behind the policy decisions made. The research findings indicate that Ethiopians experience social and economic disadvantages, yet their spatial situation seems to be better than that of other disadvantaged groups, because a significant part of this population apparently enjoys the advantages of living in the center of the country. The findings further show that while the various government housing-assistance programs have elevated homeownership rates among Ethiopians, they have not prevent the formation and proliferation of spatial concentrations of poverty. Nor have they ever provided both the means and the knowledge needed to enable Ethiopians households to enhance their quality of life by moving out of these neighborhoods. To truly address the problem of homogeneous concentrations of poverty, a holistic but tailor-made housing policy is essential. This policy should not simply mirroring the national housing policy, which focuses almost exclusively on homeownership, but rather incorporate diverse policy measures for different populations. A good and just housing policy must take into account the existing spatial dynamic and the core–periphery relations and ensure an environment that provides quality employment and education opportunities alongside social networks that the residents can leverage to increase their social, economic, and cultural capital. Otherwise, the government housing-assistance programs will continue to be mere lip service and too little, too late.