Egypt's Housing Ministry Rules Out Commercial Use of Residential Basements in New Cities

Masari Team

If you are being offered a shop, an office or a "basement flat" under a residential building in one of Egypt's new cities, including New Damietta, the official answer is now clear: that use is not permitted. On Friday 16 October 2026, the Ministry of Housing, Utilities and Urban Communities denied social media claims that basements of residential buildings and villas could be used for residential, commercial, administrative, educational or investment activities.

What was announced

According to Youm7 and Masrawy, the New Urban Communities Authority (NUCA) explained that a decision by its Main Committee for Planning and Projects sets the use of basements in residential plots. They are primarily for residents' car parking, in line with the Egyptian Garage Code and its amendments.

Any space left over after the required parking may be used only for services to the building's own residents:

  • Electromechanical equipment rooms for the building.
  • Non-commercial storage for residents.
  • A guard room of no more than 20 square metres.
  • A non-commercial gym for residents.

Each of these uses requires approval from the competent authorities, especially Civil Protection, and confirmation that the structure is safe. NUCA also said it will keep issuing rules that protect the residential character of these areas. Al-Wafd carried the same statement the same day.

What this means for buyers in New Damietta

New Damietta is a NUCA city, so the same rules apply there. In practice:

Avoid buying basement units for business or living

A below-market price on a basement shop or flat in a residential building can hide a serious problem: the activity may never be licensable and may expose you to violation measures. Ask for proof that the unit is licensed for its intended use and have a lawyer review the papers before you pay anything.

Parking protects your apartment's value

When buying a flat, ask whether the basement is actually used as a garage. Real parking reduces street congestion and supports long-term resale value, while shops or workshops underneath bring noise, strangers and safety risks.

Inspect the basement yourself

During a viewing, walk down to the basement. If it has been turned into storage, a workshop or a shop, expect possible disputes between residents or future enforcement action.

Investors: look in commercial zones

If you want a shop or office to rent out, focus on buildings and areas designated for commercial and administrative use. An attractive yield from a non-compliant unit can disappear with the first official action.

Quick checklist

  • Request the building permit and approved drawings, and check what the basement is designated for.
  • See the basement's actual use with your own eyes.
  • Count parking spaces against the number of apartments.
  • Consult a lawyer before signing for any unit whose status is unclear.

FAQ

Can I open a shop in a residential basement in New Damietta?

According to the Housing Ministry and NUCA statement of 16 October 2026, commercial activity in basements of residential buildings and villas in the new cities is not authorised.

What is allowed in the basement?

Parking first. Remaining space can serve residents only: equipment rooms, non-commercial storage, a guard room up to 20 m², and a non-commercial gym, subject to official approvals.

Does this cover villas?

Yes. The statement refers to basements of both apartment buildings and villas on residential plots.

Sources