The logic behind land allocation for residential purposes has undergone a dramatic shift in many states with a colonial legacy in the recent decade, from an ethnonational logic that favors the ethnonational majority to a more liberal-democratic, market-based logic that disregards ethnicity. In Israel, following this shift, a new claim for biased allocation has been voiced by the ethnonational majority, politicians, and administrators, which is based on multiculturalism and recognition. According to this claim, land allocation should serve the communal needs of the majority by limiting the access of minority groups to the majority group's residential areas. In this paper I argue that, despite the decline of ethnonationalism, the discourse of multiculturalism remains a substitute discourse that rationalizes the interests of the majority group, hence contributing to the stratification of societies on the basis of ethnicity. Through an analysis of three case studies of land allocation in Israel, the paper explores the material and cultural weaknesses of a multiculturalism that has been imported from societies with a strong liberal-democratic tradition into societies with a profound ethnonational legacy.