The social mix policy approach has become a common reaction to the multiple-disadvantage increasingly present in public housing estates in western cities. This approach and its social effects on socially-mixed communities have been studied widely; however the physical form or arrangement of models that such communities are formulated around have been largely missing from this discussion. The importance of design principles as well as the barriers to their implementation in mixed-tenure communities has been largely overlooked. We investigate these factors in a case study of the Carlton Public Housing Estate Redevelopment in Melbourne, Australia, using an analysis of in-depth interviews with public housing tenants, private residents and service providers. The findings show how the implementation of design ‘principles’ was contingent on political and economic decisions made by government and private enterprise stakeholders. Perceptions of whether the physical design of the redevelopment contributed to the lack of successful social mix varied between tenants, government officials, private developers and private residents. We conclude that partly due to the way that economic interests compromised the implementation of preferred design principles undertaken in the Carlton Redevelopment Project (Stage 1), neither housing tenure mix nor social interaction has been successfully experienced by public and private residents in the estate.