Urban shrinkage has become a common pathway (not only) in post-socialist cities, which represents new challenges for traditionally growth-oriented spatial planning. Though in the post-socialist area, the situation is even worse due to prevailing weak planning culture and resulting uncoordinated development. The case of the city of Ostrava illustrates how the problem of (in)efficient infrastructure operation, and maintenance, in already fragmented urban structure is exacerbated by the growing size of urban area (through low-intensity land-use) in combination with declining size of population (due to high rate of outmigration). Shrinkage, however, is, on the intra-urban level, spatially differentiated. Population, paradoxically, most intensively declines in the least financially demanding land-uses and grows in the most expensive land-uses for public administration. As population and urban structure development prove to have strong inertia, this land-use development constitutes a great challenge for a city’s future sustainability. The main objective of the paper is to explore the nexus between change in population density patterns in relation to urban shrinkage, and sustainability of public finance.