Cities are the main creators of economic wealth, generating on average 75 per cent of a country’s Gross Domestic Product (GDP). Most industries and businesses are located in or within immediate vicinity of urban areas, providing city residents with jobs. At the same time, cities need to finance their urban developments and invest in basic services and infrastructure. Running a city is a costly undertaking which requires constant investments, especially if it wants to stay competitive at regional, national, and international levels.
Because most employment opportunities are within urban areas, cities attract large parts of a country’s job seeking population. This is especially true in developing countries, where almost all economic activities take place in cities, causing rapid rural-to-urban migration. Today, over 50 per cent of the world’s population is urban dwellers, with this figure expected to rise to over 65 per cent by 2030.
In developing countries, a massive and haphazard influx of people seeking a better economic future pours into urban centers, and often fuels the creation and expansion of informal human settlements, as conventional housing options are out of financial reach. Lack of regulations and housing finance solutions only aggravates the issues of slum growth.
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