I found this yesterday and found it interesting, but while the author makes a good case for people living on Luna long-term, he leaves out one critical item.  Excerpt:

The people working on the moon will have to figure out how to make a biosphere. Could be inside an artificial construction on the lunar surface. But that will not be very large. A much more promising approach, again in the next decades, will be to use a giant lava tube. These are huge, natural caves, relics of ancient volcanic activity. A giant lava tube is large enough to house an entire city. You can imagine air proofing that and developing a local atmosphere inside that, which would be a great place to live and certainly do new things on the moon. Things you would never do on Earth. 

That is my most optimistic scenario for having large numbers of people. By no means millions, but maybe thousands of people living and working on the moon. One has to be optimistic that the international community will recognize that cooperation is the only way to go in the future, and establish lunar law that will control both real estate and also, I imagine, crime activity, if people start disputing territories. I’m hoping we have a legal framework. Right now, we seem very far away from this, but it’s got to happen. We have maybe one or two decades before the moon becomes a competitive place and exploration heats up.

The biosphere issue is, of course, the biggest problem that needs to be solved for people to live on Luna long-term.  And being underground is probably the best place to solve it; although I’ll be delighted to never give up my fresh air and wide-open spaces.  But here’s what this article misses:

Gravity.

The Moon’s gravity is about 0.166G – about 16.6% what it is on Earth at sea level.  That has huge implications for anyone living and working on the Moon for more than a few days.  It will lead to muscle wasting, loss of bone density, and a host of other physical issues.  Astronauts in the International Space Station, in free fall, have to follow a vigorous exercise schedule and still come to Earth weakened and exhausted.  And with the greater transit time to Luna, one would presume that if someone goes there, they will be there for a matter of years, if not for keeps.

If you’re talking about people starting families and actually establishing a society on the Moon, that’s a whole different problem; at the moment we have very little idea what effects low-G will have on gestating a child.

I honestly think that at some point there will be a permanent human presence on Luna.  But there are a bunch of technical issues that have to be solved first.