Just watching Bicycledutch's latest:
It's a tour round the centre of his home town. It's almost the definition of "narrow historic streets", with lots of shops / destinations. As he points out there actually isn't much "cycle infra" and when it's there it's outdated "advisory cycle lanes". However tons of people are walking about. Lots of those probably got there by bike.
Is it the culture? Because it's flat? Not that many hilly town centres - OK, Durham, parts of Edinburgh...
Just notice: you can hear people, not cars.
Pedestrianised areas, one way streets (for vehicles), LOTS of vehicle filters including several rising bollards and bus gates. Also note there are plenty of parked cars but these are in marked spaces or in bays. Very few blocking bike lanes or footway.
I wouldn't have chosen to cycle on Kerkstraat myself:
... far too many people walking. However the world doesn't end.
This is most definitely something many places in the UK - especially historic places with tourism - could do pretty cheaply, no? It doesn't seem to be killing local businesses, rather the reverse.
Choices and priorities.
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