Public housing is one of few sources of low-income rental housing in inner-city Melbourne, Australia. Most of this housing is easily identifiable high-rise estates. Some of these estates have become established centres of heroin dealing and drug use. This has had significant consequences: applicants reject offers of housing on the estates; tenants apply for transfers; and housing officers face workplace occupational health and safety issues. In sum, the presence of the drug trade is undermining the provision of affordable, well-located public housing. This paper contributes to discussions that seek to restore the value of this common resource. It does so by drawing on qualitative interviews and focus groups conducted with heroin users who live in and/or use public housing. The experience of these individuals gives insight into the current relationship between the illicit drug trade and public housing, as well as some understanding of the resilience of the illicit drug trade. The paper looks at measures that have been implemented to address this problem, before questioning whether there is room for an innovative, regulatory response to illicit drug use.