Deinstitutionalisation is represented as a major step toward social inclusion through the resettlement of disabled people residing in segregated large-scale institutions into community-based homes. By promoting the right to live in ordinary community residential settings, deinstitutionalisation fundamentally changes both the support services and housing arrangements of former institutional residents. In Australia, as in many western countries, debates on community care have tended to focus on the location and nature of non-housing supports for people leaving dependent care. This focus, however, overlooks the fact that deinstitutionalisation involves a radical rehousing of people in care. This paper explores the character and implications of deinstitutionalisation in Australia as a rehousing process. It is based on a recent national research project that has examined the housing futures of people with intellectual disabilities who have been, or will be, deinstitutionalised. The paper considers the increasingly divergent socio-political perspectives that have emerged in recent discussions about social inclusion, institutional reform and independent living and their implications for housing and community care policies.