What is Urbanization? Why is it Important to Understand?

Urbanization is the process by which more and more people leave rural areas to live in urban areas. It’s important to understand as this is happening throughout all major cities in the U.S., especially through the Sun Belt region. This shifting trend changes the way people live and how cities and economies thrive. It’s more than a shifting downtown skyline. It’s the core of how a city or urban area thrives.

 

Change can seem slow. A new building rises, one floor at a time. A new subdivision breaks ground with two homes, and then four. A new transit line is planned, and years pass. What it all adds up o can be hard to see.

A Decade of Urban Transformation, Seen From Above by Emily Badger and Quoctrung Bui

 

What Causes Urbanization?

As global trends have changed, affecting the way people live and work, people have changed the way they live to succeed, thrive, and prosper. The CEO of a Fortune 500 Company wouldn’t choose to live in Sealy, TX over River Oaks in Houston, TX. It takes time, but this change happens over decades as more development creates improved opportunities for the population. And overall, people will move to where the jobs are. There are more and improved commercial opportunities and returns in an urban area compared to a rural area. Nine of the 20 counties in the U.S. that have experience the most development this decade are in Texas, per the NY Times article A Decade of Urban Transformation, Seen From Above.

 

Benefits and Challenges of Urbanization

We know there is cause and effect for everything under the sun, and urbanization is no exception. With urbanization, there are challenges each city will face. Such as overcrowding and housing problems, unemployment, traffic congestion (ask any Houstonian about this one), an uptick of urban crime and more. There are also benefits of urbanization, such as urban growth generates revenue that funds infrastructure projects, which in turn improves lives all around. A great example of this is the Texas Medical Center. Urbanization has generated revenue to fund this medical sector, which in turn has improved research and the lives of people all over Texas (not just Houston).

 

Investing in Urban Areas. Don’t Bet Against It.

The emergence of smart cities creates a promise of the creation of business opportunities. When cities see this type of divergence, they should work with the private sector to extract the most out of it. Urbanization creates space for creating good for the economy and the planet. Yes, urbanization is good for the environment. Folks who choose to move and live in urban areas also look for efficiency. They shop online and look for faster delivery times. To achieve these standards, companies with distribution centers build urban minded locations. They develop new warehouses with efficient items such as led units. Cities are also developing public transit to to help with the new urban population.

 

At Stratiq Capital, we specialize in successfully partnering with investors on their next big project. For more information and guidance on investing in medical office buildings, connect with one of our investment experts today.