The world’s most livable cities have been ranked on the basis of their residents’ living conditions. A functioning residential area is essential for the downtown areas of historical cities as they initially developed as places for people to live. Despite the overall growth of urban economics and city populations, many internationally recognized historical and cultural cities are at the forefront of the fastest shrinking cities in Europe. This highlights a fundamental problem in the current planning and management of historical cities: the physical preservation of historical residential buildings has practically been ensured, but this has not ensured their further use for habitation. This paper presents the results of a case study of the Historical Center of Riga (HCR) and aims to identify problems regarding well-known, but still less explored phenomenon of the “loss of liveability” within the historical center of the city. The available literature on the problem of urban shrinkage and statistical data was studied in this case study, and a survey on the satisfaction of the residents residing in the Historical Center of Riga was analyzed.