This paper aims to disrupt the dominant ‘segregation as negative’ narrative, by exploring hopeful experiences and perceptions of ethnic residential concentration. Drawing on fieldwork in an ethnically mixed, working-class inner-city neighbourhood, we critically reflect on recent debates around ethnic segregation, particularly hegemonic and ‘official’ policy discourses that position ethnic concentration as incompatible with social solidarity. Narratives from residents’ in-depth interviews in Liverpool 8 problematise this association, offering alternative interpretations of ethnic concentration. Historically, Black and other racially minoritised communities were spatially confined to this area through endemic structural racism. This accentuated existing class, religious and racial inequalities, leading to the stigmatisation and marginalisation of neighbourhood and community. Neighbourhood challenges to racism help both shape and reinforce allegiance and belonging to the neighbourhood of Liverpool 8. Out of structural discrimination and spatial confinement, a unique identity with place has been forged. This has strengthened perceptions of social solidarity amongst residents and led to a neighbourhood belonging ‘through difference’, not despite the multiple disadvantages residents faced, but, in many ways, because of them. Our findings underscore the value of contextualising the circumstances under which ethnic concentration is (re)created – to appreciate the nuances of its consequences, and how communities respond to them.