Booming Swiss cities are a relatively new phenomenon. Against their current prosperity, it’s quickly forgotten many were in steady decline until the early 1990s, when the wealthier middle class, young families and high-income earners in particular all up sticks for the suburbs and beyond. That left the poor, the elderly, the unemployed and foreigners as cities’ predominant inhabitants.
Such “suburbanization” was commonplace elsewhere too. Almost invariably, whether in Europe or the US, the led to a loss of urban purchasing power and tax receipts. Swiss cities were further disadvantaged by the difficult macroeconomic circumstances following the implosion of the early 1990s real estate bubble.
Urban misery was evident in two ways: squatting and open drug consumption in places like Zurich’s Platzspitz area. Suburbanization process was particularly marked in Basel: whereas the population of Basel-Stadt (one of Switzerland’s four “half” cantons) shrank by 44,000 between 1970 and 2000, outlying Basel-Landschaft (its sister half canton) grew by 60,000. Commuter flows increased correspondingly. The consequences of this “urban exodus” were falling real city estate prices, rising urban budget deficits and increasing traffic problems.
The turnaround began in the mid-1990s and resulted in an urban boom that has continued to this day. Similar developments have been seen beyond Switzerland’s borders. Such “reurbanization” was even more intense in other industrialized countries, notably the US.
The Fall and Rise of US Cities
The decline of many US cities started after World War II. Initially relatively slow , it accelerated with wider car ownership and cheap fuel. Prospering middle classes moved to the suburbs, taking retailers in their wake. Suburbanization deprived urban centers of population, purchasing power and tax revenue. Many were hit by a downward spiral of crime, declining real estate prices and neglect. Even today, Detroit is a symbol of this “donut effect”: a carved-out urban centre surrounded by the “sugary” ring of suburbs.
The renaissance of US cities started at the end of the 1980s. “CEO mayors”, like Rudolph Giuliani in New York and Richard Daley in Chicago played a major role. The latter was re-elected five times. These charismatic politicians led their cities with a mixture of vision and a firm hand. They restructured the finances, transformed the administration and invested in public infrastructure. They also worked with private real estate developers to revitalize urban wastelands. Essentially their successful fight against crime and courageous reforms of the public school system created the conditions for the return of the middle classes. They aggressively promoted their achievements and strengthened the upward momentum further. In the late 1990s and early 2000s, many US cities experienced a new boom as homes for the “creative class”, centres for a new urban lifestyle and locations for innovative companies.