Economic conditions have improved during the past decade in many North American and European CBDs, primarily because of an unprecedented pace of office construction. Downtowns that were generally considered dead and beyond help as recently as the 1970s are now filled with both local residents and tourists, even during evenings and weekends when offices are closed. The new downtown 6ffices, shops, and recreation facilities provide cities with additional tax revenues that can be used to maintain essential services.
The underclass The atmosphere of animation and prosperity found in many CBDs does not extend to the surrounding residential areas. With the exception of a handful of renovated neighborhoods, the zone in transition is inhabited by large numbers of persons who are frequently referred to as a permanent underclass. These inner-city residents are increasingly trapped in an unending cycle of economic and social problems and are not able to share in the revival of the CBDs.
The underclass suffers from relatively high rates of unemployment, alcoholism, drug addiction, illiteracy, juvenile delinquency, and crime. For them, schools have deteriorated, and affordable housing is increasingly difficult to find. Neighborhoods lack adequate police protection, fire services, and shops, as well as hospitals, clinics, and other health-care facilities.
Future prospects are especially bleak for the underclass because they are increasingly unable to compete for jobs. Inner-city residents lack the technical skills needed to obtain most jobs, because fewer than half complete high school. The gap between the skills typically demanded by employers and the training of inner-city residents is getting much larger. In the past, people with limited education could become factory workers or filing clerks, but today these jobs require knowledge of computing and handling electronics. Meanwhile, inner-city residents don't even have access to the remaining low-skilled jobs, such as janitors and fast-food servers, which are increasingly located in the suburbs.
Fiscal problems. The concentration of low-income minority residents in the central cities has produced financial problems. Despite higher taxes generated by new CBD projects, central cities face a growing gap between the cost of needed services and the availability of funds to pay for them. The percentage of people below the poverty level living in U. S. central cities increased during the 1980s and is more than twice as high as in the suburbs. Since 1950, overall population has declined by more than 40 percent in the central cities of Buffalo, Cleveland, Detroit, and St. Louis, and by more than one-fourth in a number of' other cities. The number of tax-paying middle-class families and industries has invariably declined by higher percentages in these cities.
A city has two choices to close the gap between the cost of services and the amount of available taxes. One alternative is to raise taxes, a move that could drive remaining wealthier people and industries from the city. The other alternative is to reduce services by closing libraries, eliminating some public-transit routes, collecting trash less frequently, and delaying replacement of outdated school equipment. Aside from the hardship imposed on those laid off from work, cutbacks in public services could also encourage middle-class residents and industries to move from the city.
To avoid this dilemma, cities have increasingly sought funds from the state and federal governments. The federal government increased its share of contribution to city budgets from 1 percent in the 1950s to 25 percent in the early 1980s. Since the early 1980s, though, the federal government has substantially reduced its contributions to local governments. State governments and private corporations have increased financial assistance to cities to offset partially the loss of federal

A. a greater concentration of middle-class residents in central cities
B. a sharp decline of the life quality in central cities
C. a boom in setting up factories and offices in central cities
D. a rapid development of public transportation