The aim of the study is to investigate the current state of awareness of urban shrinkage inLiepājaby the key actors involved in the planning process. Last couple of hundred years have brought many transformations in urbanity that was always accompanied by the growth of the population and expansion of the city. However, the new patterns of urban development emerged in the last decades all over the globe, causing cities to lose the inhabitants resulting in urban shrinkage.Liepāja, the third largest city inLatvia, has lost a quarter of its population in last two decades and the trend continues. The long-term municipal planning document is being presented during this research in a light of which the research question is asked: “What is the current state of awareness of urban shrinkage inLiepājaby the key actors?” Utilising Flyvbjerg’s phronetic form of inquiry in combination with case study and repeated semi-structured interviews, the dominant planning views related to urban shrinkage are sought and analysed. The research identifies three underlying causalities that shape the decisions in planning and leave formidable consequences for the future of the city. The causalities identified and discussed in this paper are (1) the planning legacy; (2) the misconception; and (3) the political sensitivity of the urban shrinkage.