Suburbanisation: Brussels losing its wealthiest residents and businesses to periphery, says study

Brussels – once the economic heart of Belgium – is seeing its prosperity go to the suburbs, according to new research by UCLouvain university economics professor Vincent Vandenberghe.

He said that Belgian cities such as Antwerp, Liege, Charleroi, Gent and Namur, especially the capital, Brussels, are not only losing their wealthier inhabitants, but also their companies.

This phenomenon is accompanied by a lower employment rate in cities, despite a younger population, and a high concentration of people with an immigrant background. This dynamic contrasts sharply with that observed in most European countries and the United States, where large cities generally remain richer than their surrounding districts.

Vandenberghe said that because the most affluent residents move to the outskirts and surrounding towns, the major cities’ tax revenues fall dramatically.

One reason for this is that they are often replaced by people with a migratory background and lower salaries. In 1977, the income of Brussels inhabitants was 10% more than in the Flemish Rand (periphery) but, in 2021, it was 24.9% lower.

At the same time, Brussels also lost many companies that, logically, wanted to be closer to their employees and customers. Between 2014 and 2021, the capital lost 810 companies (a net figure: start-ups minus departures). This is the equivalent of some 29,218 jobs or a turnover of almost €12 billion.

Belgium’s situation is markedly different to the rest of Europe. Brussels is the only capital where the centre is significantly less wealthy than the surrounding municipalities.

Moreover, property to buy and rent in the city centre is not as expensive as in many Brussels communes, particularly south of the centre, including Ixelles, Uccle, Woluwe-Saint-Pierre and Woluwe-Saint-Lambert.

Vandenberghe offers several reasons to explain this phenomenon. Firstly, tax policies favour car use and commuters. He also notes the lack of a strategy to “disperse migrant populations”, meaning they are concentrated in city centres.

The economics professor also suggests that the federalisation of Belgium may have eroded the capital’s economic and political weight. He further highlights the industrial legacy that, for example in Brussels along the canal, has left often unattractive neighbourhoods with cheap housing, although the city is making efforts to change this.

In view of the current situation, the study proposes ways to balance out the wealth between big cities and the suburbs.

“There are two possible strategic directions,” the report states. The first is: “Reinforcing territorial solidarity: through financial transfers, strengthening dedicated funds, or extending the tax base of major cities to their outskirts through mergers.”

Notably the Rand (Flemish periphery) benefits from increased tax revenues, while middle class commuters continue to use the infrastructure and services in larger cities such as Brussels, in particular, as well as Liège and Antwerp.

In short, commuters from Flemish and Walloon municipalities come and work for Brussels-based businesses, but the Brussels region receives little in return.

The second solution is to “revitalise major urban centres: by attracting new residents and businesses, and by improving the living conditions and incomes of existing residents”. This requires, among other things, targeted education and employment policies, as well as massive investment in urban amenities (transport, green spaces, cultural and digital infrastructure).

“At the same time, we must attract new residents and businesses to the big cities and contribute to the enrichment of the existing residents’ environment,” said Vandenberghe.

With the trend of "suburbanisation" - the growth of suburban areas and the expansion of urban populations into the surrounding areas - continuing, the report concludes: “We urgently need an ambitious, coherent and integrated urban policy, otherwise territorial inequalities and socio-economic imbalances are likely to continue to grow.”