No other religion in the world, that I am aware of, obligates its adherents to live in a specific location. Why did God command the Jewish people to live in Israel?
One of the most brilliant and humble people I have met was Rabbi Suleiman Sassoon, a scion of the wealthy Sassoon family also a big talmid chacham and student of the famed Rabbi Eliyahu Dessler, author of the multi-volume ethical work Strive For Truth.
Rabbi Sassoon explained that in the business world there are two kinds of monopolies: horizontal monopoly through horizontal integration by a company increasing production of goods or services at the same part of the supply chain capturing the market for that product or service. And vertical monopoly through vertical integration in which the entire supply chain of a company is owned by that company.
Most religions, especially, Christianity and Islam, strove to become horizontal monopolies converting as many other people to their belief system as possible. Judaism does not encourage mass conversion instead it posits that any righteous individual who keeps the Seven Noachide Commands has a portion in paradise.
Instead, Judaism is a vertical monopoly literally spreading holiness from the ground up. Israel the Holy Land with holy soil growing holy produce and sanctifying all it inhabitants in order to build a holy society of perfection to be a light unto the nations. Israel is also at the meeting point of three continents: Europe, Africa and Asia and was the transit hub for trade between these continents hence it was conquered by the superpowers of old; fertilizing other societies with its ideals of: Monotheism, Justice and Righteousness.
That is why God commanded that the Jewish people have a homeland, Am Yisrael Chai!!!