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Kathy and John are all set to buy their dream home on a new housing estate. They can just about afford the mortgage - but there is one major snag: The local authority is demanding that they sign a legal contract not to own a car.

An environmentalist's fantasy and outrageous infringement of civil liberties, or the inevitable shape of things to come?Last month Bremen, Germany, became the first city in the world to experiment with a car-free residential area. The city council, which built the housing estate, has persuaded 250 families to forgo private cars, although a shared pool of 30 vehicles will be provided for emergencies.

The $1.8 million saved by not using land for parking spaces has meant lower rents and more garden space for residents.

Other major cities, including Amsterdam and Berlin, are now planning car-free housing developments for up to 2,000 people.

Car access to town centers has been drastically curbed in many parts of Europe to cut congestion and improve conditions for shoppers and workers. The traffic is being driven out by a mixture of pedestrianization and hefty parking charges.

Despite their much-publicizsed love of flashy cars, Italians have banned them during daytime from the inner streets of several historic city centers, including Florence and Milan.

Drivers entering Oslo, Norway, pay a heavy toll. Oxford, England'ss park-and-ride system has greatly reduced the jams that blighted its historic city center. Amsterdam is soon to ban virtually all daytime traffic from its central streets.

Nobody contests the manifest environmental benefits of removing cars from busy streets.

In Britain, which lags well behind most wealthy European nations in restricting car use, the problems of failing to do so are all too obvious. Inner-city suburbs are plagued by parking; doctors are increasingly voicing concern that the sufferings of asthmatics are aggravated by exhaust emissions.

The arguments most commonly employed against town-center car bans are that businesses would suffer, civil liberties would be infringed and women could be placed more at risk if forced to use public transport at night.

When pedestrianization programs were introduced in America and Europe in the 1970s, there were dire warnings from retailers and car manufacturers that the commercial hearts of great cities would collapse. A similar outcry has accompanied the traffic curbs of the late '80s and '90s. Yet all the evidence shows that the opposite has happened.

Many retailers are recognizing the attraction of car-free streets for shoppers.