This study addresses the significance of residential integration for racial groups. It questions the meaning of multiculturalism and further the meaning of residential integration as a term used by scholars in association to multi-ethnic and multi-cultural communities. There are various viewpoints and assumptions among scholars that racial segregation is a social problem and therefore it can be solved through residential integration of racial minorities. This study will argue that there are disconnections of the assumed link between racial segregation and poverty. It also argues that residential integration, as a tool to provide equality and socio-economic resources for racial minorities is not a solution to the complexities of past racial discrimination. This study concludes, that residential integration fails to address the assumed goals of intermixing different racial groups because social, political and economic advantages cannot be accomplished merely through physical integration.