This paper explores the impact of housing reforms on public rented housing in Eastern Europe, using Latvia and Ukraine as case studies. The focus on public housing is important, since in both countries municipalities and state institutions are the major social landlords. Rent structures are not sensitive to demand or quality of housing services and allocation decisions rely on bureaucratic processes. The study evaluates changes in ownership, rent and allocation policies in the two countries to determine the extent to which public housing has moved away from a ‘command’ system to a more market sensitive model. The limited success of housing reforms, particularly in Ukraine, has critical implications for the financial sustainability of the sector. Drawing on comparative work on social rented housing provision in Western Europe, the paper argues that in transition economies where the sector is large, reforms need to focus on rent policies that ensure cost recovery for services with targeted ‘in cash’ support for low income households. By contrast, in countries where the sector is small, reforms need to define its social character and role in the provision of ‘in kind’ subsidy.