Central areas, especially in the major cities of the west, are those parts of urban settlements where the concentration of the entire range of economic, financial, political and cultural activities is the greatest and the most complex. Traditionally they have been the scenes of co-existing housing, artisanal industries, business and many other economic and socio-cultural functions, in which they acted as clearing-houses for the exchange of goods, ideas and knowledge. This co-existence is now threatened. Although industries which in the past caused disruption and damage to the environment are gradually moving out, living and working in central areas can still be a traumatic experience. This is particularly true of the city centres in many industrialized countries, which exhibit environmental degradation. The numerous and highly competitive activities entailing land use overwhelm the limited space and create a situation of overcrowding, functional incompatibility and cultural degradation. Inner city areas have a high level of commercial specialization, a large number of offices and a sizeable daytime population. At the same time, city centres generally remain a sort of ghetto for a permanent, low-income population living in run-down housing and enjoying little in the way of public services and civic amenities. The concentration of the service industries inevitably entails the replacement of traditional housing and shops by office blocks, the provision of basic utilities at the expense of civic amenities and the provision of major access roads which eat up urban space. The ensuing over-concentration of traffic has the inevitable consequences of air pollution, visual obstruction by masses of vehicles and a disproportionate consumption of central spaces for transport needs. Structures of historic origin are often unable to meet modern requirements and, notwithstanding their value, frequently face demolition. Some of the future-oriented activities hitherto dominating central areas tend to abandon the stifled centre and look for more favourable locations. It also uproots the rightful inhabitants , who, finding themselves jobless in the city centres, gradually move to the outskirts and thus hasten the decay of the inner city areas while greatly increasing the demand for utilities in the new locations.
The social disparities existing in central urban areas have a cumulative effect; underemployment and unemployment increase the inequalities and mean that the already under-privileged fall still further behind. Inter-related negative factors begin to operate and they often lead to alienation and violence with, as a consequence, the exodus of those who can afford to leave and their replacement by new arrivals fascinated by the big city. Decaying buildings with no settled occupants become haunts of crime, drug use, violence and fear. As businesses, good schools, and educated people leave, city centre's have the poor, uneducated, undesirable minorities and sick. Housing deteriorates. Schools become less capable of educating as violence increases, funds decrease and the best staff leave. Teachers see themselves as baby sitters or policemen. Social services deteriorate; medical services become more centralized into public hospitals and private practices move to better neighbourhoods; unemployment and welfare agencies become part of the means of oppression; and police services shift emphasis from prevention to restricting crime to defined geographical areas. Private housing becomes substandard as returns on investment drop below zero. Arson for the sake of insurance claims is the most profitable way of recovering investments from property. Residents see no need to maintain rental property as any improvement will not be paid for by the owner and is likely to attract criminals. Public housing is often the location of high rates of crime: women are raped in elevators and drugs pushed in hallways. Access to the political processes becomes more difficult until indifference sets in for the voting population and corruption and cynicism become mechanisms for survival for politicians. The private sector invests less and less. Jobs move further and further away. Transportation is by old junk cars for those who can afford them, luxury automobiles for the criminal and increasingly bad public services for the poor. Shopping for necessities means either paying higher prices for lower quality goods or travelling to distant and frequently alien centres. Criminal investments increase with gambling, prostitution and drugs. The self image of residents and employers becomes either one of a victim of circumstance or one of an outlaw. The absence of controls governing land use is unfortunate in the city centres of many market-economy countries where, in most cases, the incremental value of land flowing from community growth is not made available to the community to finance its further development, but is largely accrued to land speculators.
In 1993 the industrial decline of London was officially recognized by the EEC/EU through inclusion of the city in a £20 billion regional aid programme.
The dilapidation of the inner city is actually the superficial manifestation of a much more general running down of traditional urban functions and institutions. Economic and social development hits hardest where it originates and changing cities are a reflection of changing societies just as the problems that have to be faced in inner city areas are the instant, physical materialization of the problems thrown up by modern society.