Urban development

Cities generate a large share of output through agglomeration: firms cluster to share suppliers, workers and ideas, and workers cluster for jobs and services. But rapid urbanisation strains housing, transport, water, waste and air quality, and much urban employment is informal. Worked example: if a city of 10 million adds 200,000 people a year (2% growth), it needs roughly 40,000 new homes a year at 5 persons per household — before counting replacement of old stock — showing why housing supply is the binding urban constraint.