The Current Column

World Cities Day

New cities are not the solution to rapid urbanisation

Roll, Michael / Nicholas Goedeking / Lena Gutheil
The Current Column (2026)

Bonn: German Institute of Development and Sustainability (IDOS), The Current Column of 30 October 2026

New city projects often fail to live up to their promise of advancing sustainable urban development – yet, they can serve powerful shadow interests.

Bonn, 30 October 2026. UN-Habitat’s Urban October initiative concludes on World Cities Day, 31 October, with this year’s theme “Adequate Housing for All”. The urgent need for housing and other infrastructure to accommodate growing urban populations makes building new cities “from scratch” appear to be an appealing solution. However, such projects frequently fail to address urban development challenges and instead serve hidden political interests – often at the expense of current and future urban residents. 

In May 2026, reports confirmed the end of The Line. Saudi Arabia has halted construction work on its planned 170-kilometer-long linear city until at least 2030. While the project has garnered much international attention due to its unusual scale and design, it is just one example of a much wider phenomenon. Across the world, governments and investors are pursuing over 150 new city projects, primarily in low- and middle-income countries. These projects, based on masterplans for previously undeveloped sites, come with many promises. They are often supposed to address the lack of adequate housing, traffic congestion, environmental pollution, and climate change vulnerabilities. However, analyses suggest that new city projects often fail to live up to these promises, raising two important questions: Why are new city projects still being pursued in such large numbers? And how should development organisations respond when approached for support for such projects?

The idea of building entire new cities responds to a genuine global challenge: urban settlements are growing at an unprecedented pace, especially in Africa and Asia. There are also cases of functioning new cities like Brasilia (Brazil) and Abuja (Nigeria), which show that these projects can work. In recent years, however, a significant number of new city developments have remained incomplete, have struggled with low occupancy, or have been abandoned entirely. There are several reasons why these multibillion-euro projects often fall short of their urban development goals, including planning, management, and financial mistakes. But as we argue in a new policy brief, new city projects also proliferate because of shadow interests – hidden political agendas pursued by powerful elites. These interests may complement or conflict with urban development goals. When shadow interests take precedence over urban development objectives, this may well serve hidden political agendas, but it increases the likelihood that the official urban development goals will not be achieved. 

Shadow interests can include consolidating political power by strengthening clientelist networks, for example by distributing land or awarding contracts to well-connected construction companies. For instance, Egypt’s new administrative capital project has been described by The Economist as a government-scheme to bribe companies with strong links to the military, thereby worsening the country’s rising debt and inflation. Shadow interests can also comprise efforts to assert geopolitical control over contested or strategically important territory, as in the case of Forest City in Malaysia. Forest City was an attempt to establish a Chinese neocolonial enclave in a strategic location as part of China’s Belt and Road Initiative. The project was launched in 2014 and is now an abandoned “ghost city”. Furthermore, shadow interests may include efforts to greenwash and legitimize authoritarian regimes by building eco-cities. An example of this is Masdar City in Abu Dhabi, which was initiated in 2006 as an attempt to position the emirate as a global leader in green innovation. To this day, the city remains vastly underpopulated. As these examples illustrate, when governments prioritise shadow interests over officially stated urban development goals, new city projects are less likely to serve the interests of urban populations.  

Addressing rapid urbanisation requires a broad set of approaches, which may also include new master-planned cities. But recent new city projects promise a lot, have a poor track record, and are often compromised by shadow interests. Such projects therefore risk wasting significant public and private resources – precisely at a time when there is an urgent need for more effective urban investment. Given this risk, development organisations should exercise particular caution when deciding whether to support such new city projects. Ideally, political economy assessments for analysing shadow interests and assessments of potential alternative urban interventions should inform such decisions. This is particularly important in authoritarian or weak state settings where infrastructure projects are more likely to be captured by shadow interests. More incremental interventions, such as upgrading and expanding existing urban settlements tend to be more cost-effective and serve a broader range of residents. Realising “Adequate Housing for All” will ultimately require more participatory approaches to urban planning and development, which also explicitly include the more than one billion people living in informal urban settlements worldwide.