The spectacular growth of gated communities around Latin America’s largest cities has been widely noted. In Buenos Aires, after the upgrade of the northern highway in the 1990s, the number of gated communities along the road more than tripled, reaching 500 by the year 2001. Yet, the geographic distribution of these communities was uneven, with the majority concentrated in municipalities with the highest percentage of poor households. Why, given similar land prices, land availability, access to infrastructure and distance to the city’s core, did developers build gated communities in the poorest municipalities? This article argues that the decentralization of planning controls contributed to these patterns of distribution. While wealthier municipalities used this prerogative to enforce tighter controls on land use, the less affluent ones relied on their capacity to modify planning codes to lure real estate developers. Unlike well‐serviced municipalities, who perceived the gated communities’ privatization of services as a potential danger to their fiscal tax base, the municipalities that lacked urban services in most of their territory saw gated communities as a fast and inexpensive way of increasing local economic activities in less productive lands. As a consequence, after decentralization of planning capacities, the development of gated communities clustered in less affluent municipalities, hence deepening the social polarization in these jurisdictions.