Shortness of supply is frightening around most of urban area (8)
I believe the answer is:
scarcity
'shortness of supply' is the definition.
(I've seen this before)
'frightening around most of urban area' is the wordplay.
'frightening' becomes 'scary' (I've seen this before).
'around' means one lot of letters goes inside another.
'most of' means to remove the last letter.
'urban area' becomes 'city' (city is a kind of urban area).
'city' with its last letter taken off is 'cit'.
'scary' placed around 'cit' is 'SCARCITY'.
'is' is the link.
(Other definitions for scarcity that I've seen before include "Lack - dearth" , "Shortage" , "Want" , "Something uncommon" , "Poverty" .)