Today, more than half the world’s population lives in cities—a figure expected to grow by 2.4 billion by 2050. Cities are at the heart of humanity’s future, but they are also ground zero for some of our biggest challenges: climate change, social inequality, and economic fragility. To house the growing urban population and achieve the U.N.’s Sustainable Development Goals (SDGs) while leading the fight against climate change, cities must embrace transformative, sustainable urban development.
The rapid expansion of urban areas is no longer just a trend—it’s a crisis. Unplanned urban sprawl, fueled primarily by mounting housing needs and the growth of informal settlements that house more than 1.1 billion people, amplifies climate risks. Buildings, housing, and construction are responsible for up to 40% of greenhouse gas emissions.
As outlined in U.N.-Habitat’s World Cities Report 2024, more than 2 billion urban residents are projected to experience significant temperature increases by 2040, with over a third of city dwellers living in areas where mean annual temperatures exceed 29°C. Over the past few decades, green areas in our cities, vital for mitigating heat and fostering well-being, have been shrinking from 19.5% of urban land in 1990 to just 13.9% in 2020. Climate-related disasters, like floods, cyclones, and droughts, have increased. They accounted for 91% of major disasters between 1998 and 2017. Often, it is the most vulnerable communities and people in informal settlements who are affected the most.
But it’s not just an environmental issue. Cities are grappling with deepening social and economic divides. Annual economic losses from increased natural disasters could surpass $1 trillion by mid-century, according to the World Cities Report projections.
The current global housing crisis affects more than 2.8 billion people worldwide. At the same time, investment in social housing has declined, with most regions allocating less than 0.5% of GDP. Internal displacement—driven by conflict and natural disasters—is adding pressure to the current housing needs. A recent report by the Internal Displacement Monitoring Center reveals that the number of internally displaced people in Africa has tripled to 35 million over the past 15 years, with 60% seeking refuge in already strained urban areas.
But it is important to realize that cities are not just the source of challenges—they are also the solution. The key lies in rethinking urban policies, social and ecological functions of land, legislation, and financing to prioritize housing and basic services as catalysts for climate action and sustainable development. The link between affordable housing, well-planned and equitable cities, and sustainable development must be made explicit.
First, it is important to optimize land use for ecological, economic, and social benefits. This approach to land issues will reduce emissions, improve accessibility, and unlock the untapped potential of urban areas. A critical task is to boost local economic development through the transformation of informal settlements and their integration into the urban fabric, especially considering the relevance of the informal economy to GDP in the Global South. For example, according to the International Labour Organization, 98.5% of Niger’s labor force was informally employed in 2021. In the Democratic Republic of the Congo, the figure was 97.5%. Informality dominates land rights and property issues, too. Only 6.6% of Angola’s urban households are registered to pay property taxes. As a result, the income from property taxes contributed only 0.26% of the state budget in 2023, according to the World Bank data referenced in the Centre for Affordable Housing Finance in Africa 2024 Yearbook.
Second, we should focus on housing and ensure the use of sustainable construction materials while developing local markets. Housing and construction serve dual purposes: creating jobs, stimulating the economy, and making housing more sustainable and environmentally friendly. By incorporating sustainable building materials such as recycled steel, bamboo, and energy-efficient insulation, we can reduce the environmental footprint of new and retrofitted homes.
Third, basic services like clean energy, water, sanitation, and transportation must be seamlessly integrated into urban planning, ensuring appropriate infrastructure investment. These services are crucial not only for the well-being of residents but also for mitigating and adapting to climate change, ensuring that cities are both resilient and sustainable for future generations.
Local and regional governments are at the frontline of these transformations. They bridge global ambitions with ground-level action, connecting infrastructure, services, and people, and serving as the foundation of the SDGs. This includes working with and for the most vulnerable communities in informal settlements and designing strategies that maximize the use of the built environment while aligning with consumer preferences and demographics.
But we cannot complete this SDG house without a roof. Housing is the roof that holds the structure together. Rapid urban growth is happening in Africa and Asia, and cities in these regions will need to take care of and shelter the growing populations. Investments in housing programs and infrastructure must be seen as an opportunity to create economies of scale, as well as expand consumer and tax bases. According to the U.S. National Association of Home Builders, the construction of 100 affordable homes creates 161 local jobs in the first year alone and brings $11.7 million in local income.
The path forward is clear: unified efforts where social, urban, and climate goals intersect on a foundation of local action under the roof of adequate housing.
And our guiding principle is simple: take care of people, and they will take care of the planet.
