THE huge, red-fronted Mailbox building just off Birmingham's city centre was built in the 1970s as the country's largest mail-sorting office. It was also probably one of the ugliest buildings anywhere in the world. Today, however, after a facelift, it is one of the most desirable addresses in the Midlands. Harvey Nichols and Armani have just moved in to this multi-use development, and all the 144 apartments on the upper floors have been snapped up for prices of up to £350,000 ($500,000).

Britain's second city used to be a byword for urban blight. After the planners got to work on Birmingham in the 1960s, its centre was a grim confusion of concrete and flyovers. By the time the recession of the early 1980s had done its bit, there was not much life left in it at all.

But in the late 1980s, an enterprising council started to reverse the trend with a mixture of public and private money. Since then, the city centre has been transformed. Money is still pouring in, with the glossy new Bull Ring shopping centre due to open next year. But in Birmingham, as in many similar cities, there is a cost to the inner-city revival.

The British doughnut, a lump of indifferent carbohydrate with jam in the middle, describes rich inner-city development surrounded by acres of gloom

Whilst the centre has prospered, those parts of the city that planners call the “inner suburbs” have crumbled, leaving many stranded in the no-man's land between the booming centre and the plush outer suburbs. Planners call this the “doughnut effect”, which confusingly describes the opposite phenomenon to the “donut effect” that American planners talk of. The American donut, a sugary ring with an empty centre, is a fine metaphor for the rich suburbs around a collapsed inner city. The British doughnut, a lump of indifferent carbohydrate with jam in the middle, describes rich inner-city development surrounded by acres of gloom.

The ideas behind inner-city regeneration are partly to blame. They were based on the principles of the Urban Village movement that emerged from America in the early 1990s, whereby the segregation of urban areas into retail, industrial and living areas was abandoned, and cities reverted to mixed-use development.

The Jewellery Quarter in the centre of Birmingham, for instance, used to be home to 70,000 jobs. Now only 6,000 remain, but developers have gentrified the old canal-side warehouses and built plazas decorated with coffee shops. This combination has attracted both homebuyers and new businesses to the area. Corporate headquarters have moved in and a new law college has opened. Other city-centre “quarters” such as Brindleyplace have also prospered after getting the gentrification treatment.

Over 3,000 new housing units have been built in the centre of Birmingham. This has even led to the novel phenomenon of “reverse commuting”, whereby the city centre's new residents travel to jobs in new, high-tech companies on greenfield sites on the edge of the city.

But, as Robert Shaw, the policy officer of the Town and Country Planning Association (TCPA), argues, “the suburbs have been left behind in the rush to improve the inner-city areas.” In many inner suburbs, the infrastructure is failing and the services are moving out. Many of these areas in Birmingham are now identified as “food deserts”: food retailers have moved out, either to up-market shops in the city centre or to out-of-town supermarkets. Differences in house prices tell the story. A Birmingham estate agent is selling three-bedroom terraced houses in the inner suburb of Selly Oak for £90,000 and two-bedroom apartments in Brindleyplace for upwards of £200,000.

Birmingham is not the only city facing up to the plight of its suburbs. The TCPA has just finished co-writing a report on the problem for the Greater London Assembly. It looks at previously prosperous areas such as Surbiton, Barnet and Colliers Wood. In Birmingham, the city council is already trying to apply the lessons of its city-centre regeneration to some of the suburbs. Northfield is set to get £17m of public and private money. Selly Oak and Erdington are also due for such treatment.

But whether the people who actually live in these areas will relish the city-centre treatment remains to be seen. City-centre regeneration relied on “higher density” plans, getting more people and businesses into the same area. For many residents, this offends the whole spirit of the suburbs, which were, after all, designed as a refuge from the bustle of city life; but these days they're looking a little too quiet.