So why is Egypt building a new capital city right next to Cairo?

A model of the proposed city (we're assuming the web address won't loom quite so large on the finished article). Image: Getty.

According to the highly reliable source that is Wikipedia, Egypt has had 29 capital cities over the past 5,000 years. The incumbent, Cairo, has been in place since 950 AD, so, in the scheme of things, it was due a change-up. 

Perhaps that's why, last week at an economic development conference, the Egyptian government announced it was planning a giant new building project to the east of Cairo. The new city, which could eventually cover 700 km sq, doesn't currently have a name, and is being referred to simply as "The Capital" (we're really hoping this is a Hunger Games reference).

If all goes to plan, the city will serve as the new administrative and financial capital of Egypt. Amazingly, the ministry claims that development could be finished within five to seven years, and construction on the road that will link the two cities has already begun. 

You could be forgiven for being a little confused as to why a country would shift its capital of over a thousand years 50km to the east, seemingly for the hell of it. Here are a few reasons the project looks so appealing to the Egyptian government . 

Cairo is full

The population of Cairo's larger metropolitan area is nearing 20m, and, as a result, it's one of the most congested cities on earth: the World Bank estimated in 2010 that traffic costs amount to about 4 per cent of Egypt's entire GDP

In this sense, the new development could be seen as an extension of the old city, to cut down on overpopulation and congestion. The housing ministry claims the capital could house up to 7m people; the initial plans include 1.1m residences, 1,250 mosques and churches, and 663 hospitals. That said, "New Cairo", a relatively new development to the east, was built for millions of residents, but is still only home to a few hundred thousand.

Still, Cairo's population is expected to double over the next 40 years, so a new satellite city does make some kind of sense. But why move the country's capital too? 

The president wants to make a statement

Abdel Fattah el-Sisi was elected president in June 2014, and subsequently told the Egyptian people to prepare for the "hard work phase" in their country's recent history, to help the country's economy recover from the effects of the 2011 revolution. That revolution played out in old Cairo, and centred on Tahrir square, the site of many of Cairo's current administrative buildings. 

Mubarak, Egyptian president between 1981 and 2011, actually tried to build a new capital too during his own tenure, but that project failed. If Sisi can succeed, and physically move the government away from the ghosts of the revolution to boot, it'll show he can overcome Egypt's previous setbacks and political tensions and move the country – and, hopefully, its economy – forward. 

Image: Getty.

The Egyptian governemnt may not have to pay for it

The government has hired a Dubai-based real estate investment fund, headed by Emirati Mohamed Alabbar, the man behind the Burj Khalifa, to raise funds for the project and build it. By the end of last week's conference, around $12bn had been pledged by Gulf-based investors, which is over a quarter of the total (that's if the project stays within budget, of course).

The Egyptian people must be hoping for big foreign investment, too: Sisi has already cut food and energy subsidies and raised fuel prices to help the country's ailing economy, which has led some to criticise the announcement of a grand new city project while Egypt's poorest go hungry. 

The Suez canal is getting wider

Another important factor is the city's location: it will lie between Cairo and the Suez Canal, with its profitable trade routes. Under a new expansion project, the Egyptian government is expanding the canal, to allow boats to sail in both directions at once (it goes both directions at the moment, but along most of its length its only wide enough to go one way at once), potentially doubling the trade revenue generated. 

Here's the planned location, a short hop from both New Cairo and El Shorouk city (the two blobs just to the north of the new capital). 

This will bring the city much closer to the canal,  using up what is at present just a stretch of desert: 

It's been done before

...though not particularly successfully. Malaysia moved parts of its central governemnt from Kuala Lumpur to the newly built Putrahaya in 1999, while in 2005 the Burmese government shifted from Yangon to the brand new city of Naypyidaw (though that city is reportedly still half empty). Egypt, meanwhile, has built over 20 "new towns" over the past half century, most of which are still very sparsely populated. Looks like President Sisi has a real job on his hands. 

 
 
 
 

A new wave of remote workers could bring lasting change to pricey rental markets

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus. (Valery Hache/AFP via Getty Images)

When the coronavirus spread around the world this spring, government-issued stay-at-home orders essentially forced a global social experiment on remote work.

Perhaps not surprisingly, people who are able to work from home generally like doing so. A recent survey from iOmetrics and Global Workplace Analytics on the work-from-home experience found that 68% of the 2,865 responses said they were “very successful working from home”, 76% want to continue working from home at least one day a week, and 16% don’t want to return to the office at all.

It’s not just employees who’ve gained this appreciation for remote work – several companies are acknowledging benefits from it as well. On 11 June, the workplace chat company Slack joined the growing number of companies that will allow employees to work from home even after the pandemic. “Most employees will have the option to work remotely on a permanent basis if they choose,” Slack said in a public statement, “and we will begin to increasingly hire employees who are permanently remote.”

This type of declaration has been echoing through workspaces since Twitter made its announcement on 12 May, particularly in the tech sector. Since then, companies including Coinbase, Square, Shopify, and Upwork have taken the same steps.


Remote work is much more accessible to white and higher-wage workers in tech, finance, and business services sectors, according to the Economic Policy Institute, and the concentration of these jobs in some major cities has contributed to ballooning housing costs in those markets. Much of the workforce that can work remotely is also more able to afford moving than those on lower incomes working in the hospitality or retail sectors. If they choose not to report back to HQ in San Francisco or New York City, for example, that could potentially have an effect on the white-hot rental and real estate markets in those and other cities.

Data from Zumper, an online apartment rental platform, suggests that some of the priciest rental markets in the US have already started to soften. In June, rent prices for San Francisco’s one- and two-bedroom apartments dropped more than 9% compared to one year before, according to the company’s monthly rent report. The figures were similar in nearby Silicon Valley hotspots of San Jose, Mountain View, Palo Alto.

Six of the 10 highest-rent cities in the US posted year-over-year declines, including New York City, Los Angeles, and Seattle. At the same time, rents increased in some cheaper cities that aren’t far from expensive ones: “In our top markets, while Boston and San Francisco rents were on the decline, Providence and Sacramento prices were both up around 5% last month,” Zumper reports.

In San Francisco, some property owners have begun offering a month or more of free rent to attract new tenants, KQED reports, and an April survey from the San Francisco Apartment Association showed 16% of rental housing providers had residents break a lease or unexpectedly give a 30-day notice to vacate.

It’s still too early to say how much of this movement can be attributed to remote work, layoffs or pay cuts, but some who see this time as an opportunity to move are taking it.

Jay Streets, who owns a two-unit house in San Francisco, says he recently had tenants give notice and move to Kentucky this spring.

“He worked for Google, she worked for another tech company,” Streets says. “When Covid happened, they were on vacation in Palm Springs and they didn’t come back.”

The couple kept the lease on their $4,500 two-bedroom apartment until Google announced its employees would be working from home for the rest of the year, at which point they officially moved out. “They couldn’t justify paying rent on an apartment they didn’t need,” Streets says.

When he re-listed the apartment in May for the same price, the requests poured in. “Overwhelmingly, everyone that came to look at it were all in the situation where they were now working from home,” he says. “They were all in one-bedrooms and they all wanted an extra bedroom because they were all working from home.”

In early June, Yessika Patapoff and her husband moved from San Francisco’s Lower Haight neighbourhood to Tiburon, a charming town north of the city. Patapoff is an attorney who’s been unemployed since before Covid-19 hit, and her husband is working from home. She says her husband’s employer has been flexible about working from home, but it is not currently a permanent situation. While they’re paying a similar price for housing, they now have more space, and no plans to move back.

“My husband and I were already growing tired of the city before Covid,” Patapoff says.

Similar stories emerged in the UK, where real estate markets almost completely stopped for 50 days during lockdown, causing a rush of demand when it reopened. “Enquiry activity has been extraordinary,” Damian Gray, head of Knight Frank’s Oxford office told World Property Journal. “I've never been contacted by so many people that want to live outside London."

Several estate agencies in London have reported a rush for properties since the market opened back up, particularly for more spacious properties with outdoor space. However, Mansion Global noted this is likely due to pent up demand from 50 days of almost complete real estate shutdown, so it’s hard to tell whether that trend will continue.

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus, but many industry experts say there will indeed be change.

In May, The New York Times reported that three of New York City’s largest commercial tenants — Barclays, JP Morgan Chase and Morgan Stanley — have hinted that many of their employees likely won’t be returning to the office at the level they were pre-Covid.

Until workers are able to safely return to offices, it’s impossible to tell exactly how much office space will stay vacant post-pandemic. On one hand, businesses could require more space to account for physical distancing; on the other hand, they could embrace remote working permanently, or find some middle ground that brings fewer people into the office on a daily basis.

“It’s tough to say anything to the office market because most people are not back working in their office yet,” says Robert Knakal, chairman of JLL Capital Markets. “There will be changes in the office market and there will likely be changes in the residential market as well in terms of how buildings are maintained, constructed, [and] designed.”

Those who do return to the office may find a reversal of recent design trends that favoured open, airy layouts with desks clustered tightly together. “The space per employee likely to go up would counterbalance the folks who are no longer coming into the office,” Knakal says.

There has been some discussion of using newly vacant office space for residential needs, and while that’s appealing to housing advocates in cities that sorely need more housing, Bill Rudin, CEO of Rudin Management Company, recently told Spectrum News that the conversion process may be too difficult to be practical.

"I don’t know the amount of buildings out there that could be adapted," he said. "It’s very complicated and expensive.

While there’s been tumult in San Francisco’s rental scene, housing developers appear to still be moving forward with their plans, says Dan Sider, director of executive programs at the SF Planning Department.

“Despite the doom and gloom that we all read about daily, our office continues to see interest from the development community – particularly larger, more established developers – in both moving ahead with existing applications and in submitting new applications for large projects,” he says.

How demand for those projects might change and what it might do to improve affordable housing is still unknown, though “demand will recover,” Sider predicts.

Johanna Flashman is a freelance writer based in Oakland, California.