The fight against urban sprawl has become an international motto for planners. However, recent urban policies promoting "smart growth" and "new urbanism" are the subject of growing criticism from various scientific disciplines. This paper goes beyond the debate for or against sprawl to examine the political and social issues behind anti-sprawl policies. We show how and why urban compaction can be perceived as a burden or a resource, depending on the different sub-metropolitan territories concerned. These issues are discussed in the case of the second largest metropolitan area in France, the region of Lyon. The paper analyses how the national legislation on urban sprawl and the "compact city" is implemented in the very diverse territories within Lyon's metropolis and how some of those territories use it to their advantage. It reveals that the resulting compromises are deceptive and raise spatial justice issues. It also shows how compaction or densification are negotiated in the suburbs to preserve the status quo in wealthy municipalities.