Balanced between a chair on the floor and a dresser stuck to the ceiling, Jordi Ariza Gallego looks around the top room of his club. This Alice-in-Wonderland exhibit is “backstage”; next door is a barber. Below, people are eating in an Indonesian restaurant. The crowded ground floor is showing one-minute erotic films from the Dutch publisher of Butt magazine.

“It’s like a house party, and everyone can visit a different floor,” said the curator behind this arts-cum-party foundation. “I love it that it’s so confusing!”

This is the kind of wild, niche nightlife that echoes Amsterdam’s dirty but arty scene of the 1980s and 90s. Then, clubs like RoXY and iT put the city’s nightlife on the map, with a vibrant dance culture (fuelled by MDMA) that married music, performance and art.

But today, Ariza Gallego’s Sexyland World, which rents its dancefloor for €80 (£67) a night and includes an outside bar and art gallery in a shipping container, is literally at the city fringes, a ferry ride from the centre.

As property prices approach those of London, worried promoters, DJs, artists and bureaucrats launched a project to build a €12m Institute for Night Culture (Inc) on the central Halvemaansteeg, Dutch for half-moon alley.

Deputy mayor Touria Meliani briefed the council that the public-private initiative, to open in 2027, would programme progressive culture.

“The night has often been a safe haven for outsiders and dissenters and nowadays has grown into a place for everyone,” she said. “Night is the childhood of culture – a time of incubation and growth, essential for the maturation of ideas.”

The Dutch capital has moved the oversight of clubs from its justice department to its culture department, and launched an official nightlife promotion agenda. And it is not the only city that is worried about its nightlife. Last week, the UK’s Night Time Industries Association warned that UK clubs could be extinct by 2029.

Back in Amsterdam, promoter Sven Bijma of queer Club Raum believes costs and regulations are strangling the place. “The city has changed so much. I call it a neoliberal hellhole,” he said at the Inc launch. “Young ­people are driven out after they graduate. Artists move out to Berlin. There’s not much here to stay for.”

This money-driven capital is creating a monoculture where up-and-coming creatives have fewer chances to try things and fail, said architect David Mulder van der Vegt, who designed the Inc building. “Nightlife is the canary in the coalmine: once your nightlife starts to slow down, it says something about cultural production as a whole and creativity in the city,” he said.

There are concerns that the pandemic was damaging, especially for minorities. Official city figures show that seven in 10 Amsterdam residents now go out to dance events, museums and films compared with eight in 10 before Covid. “Nightlife is a safe haven for a lot of people who feel like they’re rejected by society by daylight – a sort of Jekyll and Hyde thing,” said Dutch DJ Joost van Bellen. “If you go to a certain club, it’s your club – you know you’re safe if you’re trans or gay or flamboyant, or somebody who’s just different. Nightlife is a refuge.”

Meanwhile an expensive city can have issues with complaining neighbours, said Ariza Gallego, whose club was previously based at an old ship wharf. “In the final stages at our old location, we got a lot of complaints [over] the light we produce,” he said. “There is not [always] a fair interaction between the businesses, the cultural institutions and the neighbourhood.”

He found another space, but some promoters do not, said Timo Koren, assistant professor in cultural studies at the University of Amsterdam, because of a “white conception of safety”, where a majority black crowd is seen as more dangerous.

So can a public institute really revive the scene? Some warn about looking back with misplaced nostalgia. And drugs researcher Ruben van Beek of Trimbos Institute says that some of today’s rules are there “to safeguard people from getting hurt due to drug use, alcohol use or transgressive behaviour”.

Calling for “freedom, tolerance and equality”, Van Bellen has no doubt on what’s needed: “It’s crazy that a country like ours is now ruled by extreme-right parties. Dance music should bring people together.”