Research on the residential and housing differences of urban populations in post‐second world war Central and Eastern Europe has a tradition extending back to the 1960s. Most studies have focused on the Polish, Czech and Hungarian (large) cities using aggregatelevel data and testing simultaneously the impact of a few factors on residential and housing differences. This research clarifies the housing differences in the late Soviet era of Tartu (the second largest city in Estonia). Using the individual‐level data of the 1989 Soviet census and multivariate methods, the article demonstrates that several factors (age, education, occupation, employment sector, ethnic origin, place of origin) shape the individual’s housing and living conditions in the late Soviet period in Tartu. On the one hand, the results support the importance of the policy of different institutions (state, enterprises) in shaping people’s living conditions; on the other hand, they also point to people’s resources and desires as the cause.