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Distressed urban areas suffer, by definition, from a number of serious problems. It is often assumed that all relevant stakeholders agree about the character of these problems and the right policy solutions. Reality, however, is more complex. In this paper we investigate how local stakeholders and residents in a Dutch post-WWII neighborhood perceive urban problems and solutions. The findings show the very opposite perceptions about reality and about effective solutions in distressed neighborhoods held by local managers and residents. The main conclusion is that a power-driven narrative of problematic post-WWII neighborhoods within a neoliberal strategic urban agenda has led to a power-driven urban governance arrangement to the exclusion of residents.