WHEN a magazine proclaims on its cover that a city is the world’s “coolest”, it is often a sign that it has peaked. Newsweek did it to London in 1996, just as the city was becoming unaffordable for many cool people. Now it is Berlin’s turn. In October Stern, a German magazine, declared the city the coolest, giving special attention to its many great clubs for partying.

The party scene is thriving, drawing tourists from Tel Aviv to Stockholm who fly in for long insomniac weekends. The most famous venue, Berghain, notorious for its arbitrary bouncers, is a world hub for techno music. But true cognoscenti are nostalgic for the rougher, anarchic days just after the Berlin Wall fell, when clubs popped up in abandoned spaces along the former no-man’s-land, always several steps ahead of tedious fire regulations. A new book, “Berlin Wonderland”, documents the “wild years between 1990-96” with black-and-white photographs.

Some Berliners’ nostalgia goes further back. The hottest museum exhibition is about West Berlin as a freedom-loving, libertine and yet parochial island surrounded by East Germany. These days, by contrast, locals are annoyed by throngs of expats and westerners gentrifying formerly edgy neighbourhoods like Prenzlauer Berg.

Berlin is still fascinating. Nowhere are the scars of history—holocaust, war, destruction, division—so visible. And rents and prices remain low. A Facebook post by an Israeli expat in Berlin, called Olim le Berlin (“ascend to Berlin”), has launched a small exodus of Israelis who come for affordable fun and find Germany’s dark past more intriguing than repulsive.

Yet rents have been rising for years, and locals and creative types complain about being priced out (even as they oppose any attempts to build new housing). Worse, much of the city has been made unusable or ungainly because of construction. The most notorious project of all is Berlin’s new airport, originally due to open in 2011 but repeatedly delayed (to 2017 on the latest estimate). It is now the butt of jokes.

Even more telling is a huge building-site in the city centre, where the former castle of the Prussian kings (damaged in the war, razed by the communists) is being rebuilt to house a cultural forum. After years of controversy, most Berliners have decided that it is boring, retrograde and a missed opportunity. And there may be too little money left to make three of the façades look like the old castle, so the edifice could end up disappointing even its fans.

For Berliners with children, schools are the biggest problem. The centre-left Social Democrats who run Berlin’s government have fiddled about with no fewer than 23 school reforms, most of them ideologically tinged to level down rather than foster excellence. Berlin comes last in the school rankings among Germany’s 16 states. Now the government is harassing the international (ie, English-taught) schools with new regulations, which will anger many expats and cosmopolitan locals.

It is symbolically fitting that Klaus Wowereit, the gay and flamboyant Berliner who famously described his city as “poor but sexy”, has just retired after 13 years as mayor, to be replaced by a relatively grey protégé, Michael Müller. After decades of being subsidised by Germany’s richer states, Berlin now balances its budget. It is like an adolescent who has grown up and wants to prove he’s responsible. Hence its bid to host the Olympics in either 2024 or 2028. Within Germany and even Europe it is still hard to find a more exciting city. And yet, as the new nostalgia suggests, Berlin’s best days may already be behind it.