Kobe City has announced its decision to purchase shares worth 280 million yen in Kobe Electric Railway, positioning itself as a major shareholder and aiming to enhance its influence over the company's operations. This initiative is part of a broader strategy to partner with the private railway to rejuvenate suburban residential areas, which have been declining and contributing to population decreases. The city has noted that the ongoing financial struggles of the rail line are concerning as they could affect residents' transportation options.

Kobe Electric Railway, established in 1926, maintains a significant rail network covering 69.6 kilometers across four cities including Kobe, Sanda, Miki, and Ono. The line is particularly vital within Kobe, serving as a crucial transportation link from Shin-Kaidai to the northern and western districts. The city plans to use proceeds from selling shares in another company as funding for this investment, which would make it one of the top four or five shareholders in Kobe Electric Railway for the first time.

The city has recognized the decay of its suburbs as a factor in population decline and has prioritized revitalization efforts. A concerted push has been made towards renovating areas around railway stations to enhance local attractiveness and viability. The initial budget proposal for the 2026 fiscal year includes funds for the redevelopment of areas surrounding key stations on the Kobe Electric Railway, like Suzurandai and Okaba, with additional efforts to entice the company into improving railway facilities and overall connectivity in the suburbs.