They did that in the 60s-70s with a part of Malmö, an area called Lugnet. That area was improved because of the gentrification that followed. The people who used to live in Lugnet (mostly working class) moved out to newly built areas further out from the city center (Rosengård for example). Those areas are problematic today.
The “newly built” areas that you refer to are probably not something to be proud of, right?
I’ve only been to Rosengard twice, and it felt just as awful as the old projects outside stockholm.
This is going to cost a lot of money/resources to fix and I’d rather we spend money fixing the bugs in our society than build prisons and lock people up for decades. In the end the latter will not fix the underlying issues and instead work to segregate and compound issues further.