Even though there is a long tradition of red-light districts (RLD) being concentrated within the city centre, gentrification policies in many European cities now aim at spatially dispersing the sex market (and its workers) to the fringes of the city. Moving RLDs out of the city centre (or transforming them into more-upscale entertainment provision) calls into question the physical place allotted to sex work in our cities, as well as the moral geography behind these decisions. This article examines urban regeneration processes in two particular European cities – Amsterdam and Zurich – both cities with a long history of progressive drug and sex-work policies where sex work has been part of the visible urban fabric. In the article we look at urban policies and the legal framework, as well as at moral reasoning and discourses around the legitimacy of moving sex-workers away from city centres. We argue that in both cities moral arguments play an important role in the legitimization of the transformation of the RLD which contributes to a new race and gender order that stigmatises sex-workers as a group as if they were all victims of trafficking.