Why did Solomon move Pharaoh's daughter out of the City of David?

Answer: Where the ark had been was holy

Solomon said his wife must not live in David's house, because the places the ark of the LORD had entered were holy.

“Solomon brought the daughter of Pharaoh up from the City of David to the palace he had built for her. For he said, “My wife must not live in the house of David king of Israel, because the places the ark of the LORD has entered are holy.””— 2 Chronicles 8:11 (BSB)