How The Localization Of Food Production Is Changing The Urban Real Estate Landscape
City and vertical farming must be integrated into urban planning and should not be treated as isolated projects to secure our food supply.
Ten years ago, alongside the startup boom, we invested in new food startups. Initially, it seemed possible to invent successful products, such as plant-based protein foods. However, creating profitable, innovative daily food items proved challenging.
I travelled to global food fairs and conventions, founded a Food Innovation Think Tank, and supported startups using my food industry experience.
Despite many ups and downs in the food startup sector, one sector continues to drive fundamental change in urban real estate: farming, especially vertical farming. Urban agriculture, through innovative methods, is emerging as a key disruptor of how cities use space for food production.
How Urban and Vertical Farming Will Shape Cities
With rapid population growth, reinventing farming is essential. Vertical farming and integrating agriculture into city buildings are transforming the real estate market—a shift that could redefine city planning and property values.
This change in our attitude towards farming in the countryside will begin in unused office buildings, empty malls, and empty warehouses. These buildings have the potential to be converted into vertical farming projects, becoming a new stream of income, where the old retail and real estate sectors are lacking.
The roofs of big-city buildings are usually underused and have significant potential for urban gardens and micro-urban agriculture businesses. This will change buildings in line with wellness and sustainability trends, raising housing prices as a result of these innovative rooftop developments.
In addition to these new city farms, food markets, food halls, and new restaurants can develop in these areas, supplied by these farms to follow the farm-to-table idea at its best. This reduces long transport distances and supports food security goals by following this climate-friendly idea.
Urban farming, especially vertical farming, yields more per metre than large-scale farms. Farming directly near or in cities reduces pressure on overall soil use for city planners and local politicians. Besides traditional renting, rooftop garden solutions offer a model of landlord participation in farm revenues.
Repurposing these buildings specifically for food production can stabilize property uses, insulating them from mere speculation and making urban farming a central pillar in city resilience.
The Big Green Dilemma
But the green dream carries significant economic and business risks.
With high upfront capital costs for building vertical farms and rising operational expenses—such as energy, water, and maintenance—vertical farms often struggle to reach profitability. This financial strain can make it difficult for new ventures to survive without significant investment and carries risks for investors expecting fast returns.
The opposite of a climate-friendly idea is eliminating the sun's natural light and replacing it with LED lighting and year-round climate control. One of the most important questions remains: whether this way of farming really offers a solution to lower water usage or if the used sprinkler systems, depending on the size of the vertical farms, do the opposite.
A power outage in a densely populated city could challenge the operation of rooftop or vertical farm projects, given their reliance on modern urban infrastructure and technical systems.
The main argument against these innovative ideas is that we cannot farm every crop, grain, or food ingredient we need for our daily nutrition with these new models. The revolution in farming is focused on a small set of plants and herbs that can be cultivated in this urban environment.
Locally produced food can be more expensive due to limited scale and higher production costs, potentially leading to greater social pressure when lower-income households are unable to afford innovative, organic, high-priced premium food. The inability to price competitively may challenge the economic sustainability of these local farms.
The whole approach is still often project-based, because the political and socio-economic framework, including rules and regulations, for an inner-city farming shift, has not yet been established.
We Need to Find A Different Way of Farming
Visiting a local organic food supplier and reviewing the origins and pricing of everyday items such as orange juice or basil illustrates a key dilemma: climate-friendly ideals often run up against real-world market constraints. Currently, discount chains demonstrate that it is possible to provide both organic and non-organic food through established supply chains and accessible pricing.
City and vertical farming must be woven into urban planning, not treated as isolated projects. The successful integration of farms into carefully selected buildings, with incentives for sustainable resource use, ensures that food systems strengthen cities. Cities should prioritise supporting developers who include farming in new construction.
Farmers recognize the industry will soon face disruption.
If the supply chain breaks, does your city starve, or does it adapt?
Jens Koester is a strategic advisor focused on the structural friction between exponential technology and the enduring patterns of human culture. Through The Human Datum, he provides the intellectual architecture and foresight necessary for leaders to navigate the AI-driven decade with clarity and intentionality.
