Frank Gehry’s building has been much praised, but how has the museum really changed the area and are there too many cities trying to copy?

The thing about the Bilbao effect is that it is a myth. You could just as well call it the Sydney Opera House effect, the Pompidou effect, or dozens of other effects. Bilbao wasn’t the first city to be transformed by a self-consciously iconic building and it won’t be the last.

The idea of the Bilbao effect is a massive oversimplification. Bilbao was already undergoing a period of radical change. It had a new metro system with sleek stations designed by Foster & Partners and two superb new library buildings. The city was completely rethinking its public spaces and a sophisticated contemporary culinary culture was emerging. The Guggenheim was the olive in the martini – highly visible – but not the main event.

The tendency to attribute too much to a single building has become the architect’s golden ticket. Every cultural institution now has to make claims to regenerate the city, to transform a derelict dockland, to bring glory where before there was only (as Trump might say) carnage, as if architecture were alchemy.  The burden has proved too much for architecture to bear. In trying to achieve too much, architects can forget the most important things. In the obsession with creating a form that is easily instagrammable, an architecture that acts as instant urban logo, the detail is lost. Architecture is not sculpture; it is not the creation of an extravagant form of rebranding. Rather, if it is to have a real and lasting value, it needs to be woven carefully into the complex fabric and grain of the city and to understand the way people move through the street. The simplistic desire of city boosters to express their uniqueness through a skyline leads, paradoxically, to a generic city of standalone objects in which the yearning for difference blurs into a mush of half-remembered familiarity. Singapore looks like Taipei, which looks like Dubai, Dallas, Doha, or the Docklands.

None of this means that the Bilbao effect is over. Cultural institutions and city grandees now require all architecture to do more than just function or contribute to a developing cityscape. Architecture now needs to be starchitecture, full-on spectacle. As I write, a London developer is revealing plans for a Docklands megastructure by Santiago Calatrava, the architect who almost bankrupted Valencia through an overbuilt cultural blockbuster. Is that what London needs?

The Bilbao effect was a misnomer for a misconception, yet it is deeply engrained in urban thinking. Sophisticated cities have realised it was a scam all along; the others can’t resist throwing good money after bad in a doomed bid for uniqueness in a homogenised cultural and architectural landscape.

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As for economic impact, the type of investment encouraged by Bilbao’s regeneration projects is inherently unstable (tourism and retail) and also highly speculative (the real estate sector). Moreover, the patterns of employment created in urban redevelopment projects tend to be highly polarised. They are characterised by a relatively small number of highly paid managerial jobs and a far larger number of low-paid, unskilled jobs in the service industry.

As for social issues, recent figures on the rise of inequality and poverty in the city make it impossible to consider the Bilbao model a success. For example, severe poverty has increased in Bilbao since 2000 by 33 per cent and today affects 11.5 per cent of Bilbao households, a figure that is twice the average for the Basque Country as a whole. Moreover, the number of households receiving income assistance has increased by 38 per cent since 2002. The downtown bias of the regeneration projects, with the centre being upgraded at the expense of the city’s poorer areas, has exacerbated socio-spatial disparities in the city and raises the risk of Bilbao being seen as a ‘dual city’, i.e. the idea of the two Bilbaos: the ‘new’ one represented by the renovated, spectacular downtown, and the ‘old’ by the depressed neighbourhoods on the periphery.

And regarding issues of local democracy and public involvement, Bilbao’s urban regeneration projects have been characterised by a lack of public debate and participation, and the Bilbao model of urban governance has been accused of imposing barriers to public involvement in decision-making.