The issue of short-term rentals is a hot topic in Cape Town. Rental and accommodation Facebook groups are inundated with requests from visitors in need of accommodation between December and March, a popular time for digital nomads to visit.
But it’s not without controversy, and was thrown into sharp relief at the August launch of the Fair Rent campaign at Cape Town’s Central Methodist Church, organised by the Rent Control Group.
For a start, there’s the matter of what short-term lets mean for affordable accommodation in Cape Town; there’s an ever-worsening shortage of long-term rental stock available for residents in and around the city centre.
Miguel Martins, director of the South African Short-Term Rental Association (Sastra), tells the FM: “Cape Town is a victim of its own success. It’s a well-run city, it’s a beautiful city, it has lots of attractions. People want to be there and that drives demand and property prices.”
The concern, says Rent Control Group volunteer Leila Kidson, is the “hyper-financialisation and commercialisation of property” in the city, with companies buying 160 properties across the city and renting those out for Airbnb.
As it is, the local spatial development framework for the CBD says 70% of all residential units in the city centre are either hotel-managed or Airbnbs. Data activist project Inside Airbnb shows that there are about 27,000 listings in Cape Town. That is higher than in cities like Los Angeles and Lisbon.
There are more than 400,000 people on the city’s housing waiting list.
A second, related issue is that of regulation of short-term lets. A number of Airbnbs in the city — even whole apartment blocks bought for short-term letting — are paying residential as opposed to commercial rates. A new bylaw, out for public comment until October 5, aims to change that.
As it stands, under the city’s rates policy, approved in June, commercial property rates apply if a property is available for short-term letting for more than 50% of total annual room nights. The 50% ratio is arrived at by calculating the portion of nights a property’s total bedrooms are available for short-term letting over a year.
It doesn’t apply to people supplementing their income by renting out some of their primary residence for some of the time. It also doesn’t apply to long-term rental properties that are the primary place of residence for a tenant.
The issue is that many Airbnb properties aren’t registered as commercial properties and so don’t pay commercial rates. The proposed bylaw aims to regulate “all short-term letting properties within the jurisdiction of the city to ensure that property that is predominantly used as commercial short-term letting accommodation is accurately classified as such for property rates purposes”, the city says.
Finance MMC Siseko Mbandezi tells the FM that the new bylaw is about ensuring “fairness in the commercial accommodation sector”.
The city, he says, “supports the tourist economy in the strongest terms and regards short-term letting as an important sector for servicing diverse tourist needs”. Still, it “the playing fields for businesses should be equal, with all those using a property for commercial accommodation paying the correct rates”.
The city has been working to identify properties used for commercial accommodation where residential rates are being levied, he says. The new bylaw will require all properties listed on any booking platform to register with the city; a city-issued registration number must be displayed on all listings; and booking platforms, owners and operators must share data on listing availability with the city. This will bring qualifying short-term lets under the taxable commercial property umbrella.
Failure to comply could result in a fine, six months’ imprisonment or both.
The changes will come into effect in July 2027.
‘Pricing the harm’
Martins says Cape Town is the only city considering such a bylaw. “The current proposal is that if you’re deemed to be a short-term rental, your zoning doesn’t change, but the category by which you pay your monthly property rates changes,” he says.
By Sastra’s estimate, the city will raise about R500m in additional income from this.
Martins reckons that, compared to hotels and guesthouses, short-term rentals take up about 50% of available accommodation options in South Africa and contribute enormously towards the tourism sector and job creation. But you can’t have growth without limits.
“You’ve got to have growth that ultimately is sustainable and balances all the different needs in the economy,” he says. “We support regulation that enables the economy and the industry.”
There are concerns about the proposed bylaw among Sastra’s members, though — starting with the fact that “even if you are not considered a commercial property, you still have to register”, he says. There’s also the fact that “you’re considered to be a short-term rental if your property is available to be booked for more than 50% of the year. Not occupied — available to be booked.” And there are worries around privacy when it comes to registration.
Then there’s the subeconomy that each rental generates. “Local businesses are supported by guests who stay at those places, and someone who’s travelling is going to spend a lot more than someone who lives there. If we had to significantly restrict that, those jobs would be on the line,” he says.
Kidson, meanwhile, says her primary concern with the proposed bylaw is that it doesn’t speak to the issue of how short-term rentals affect housing stock. “What the bylaw has done, which is … important, is to create a difference between commercial and residential properties,” she says. “Our main critique is that the commercial tax just prices the harm. It doesn’t necessarily take the harm itself off the market.”
What the bylaw is not doing, she says, is regulating how many Airbnbs can be in different areas.
A push for change
Deena Bosch is concerned about the effects of the resultant gentrification on the cost of living. She lives in Walmer Estate, a suburb near the city centre. “I’m clinging to the hill,” she said at the Fair Rent meeting. “Otherwise I will roll all the way down into Wolwerivier or Blikkiesdorp [on the outskirts of the city], because that’s where people had to go when gentrification took over Woodstock, Salt River and all those areas.”
She sees the battle for affordable accommodation as part of a broader struggle. “We are part of a global struggle. In the same way the Treatment Action Campaign had to fight Big Pharma, we have to fight globally,” she said. “We have to take our stand with Barcelona, London, New York, Amsterdam, all of the cities.”
It’s a message that was echoed by Murray Cox, founder of Inside Airbnb. “In New York City, where I lived and organised for many years, I saw how tenants, community groups and housing advocates, supported by research and data, helped win some of the strongest short-term rental regulations and enforcement in the world to protect housing,” he said in a video broadcast at the event.
“In Barcelona, years of community organising have helped win strong restrictions on short-term rentals … but their fight against overtourism and its impacts on housing and communities is far from over.
“Change doesn’t happen by itself; it happens when people organise, share their experiences, build evidence and demand that governments act.”
One concern for Kidson is the potential backlash. “If we keep talking about responsible tourism, and yet we don’t actually look at how tourism is negatively impacting people, we’re going to end up with a situation like Barcelona, where there is such hatred and disdain towards tourists,” she says.
For Martins, it comes down to coexistence. “What’s required is a much more holistic conversation around creating property opportunities and housing in Cape Town,” he says. “It’s a conversation that is often missing.”
Part of that is inclusion. Rent Control Group member Courtney Haas remembers her grandfather’s stories of District Six before the forced removals of the 1960s.
“I also carried that wound,” she told the meeting. “Every time we would drive into Cape Town and I’d look at the fields, I’d always imagine what our house would look like, or I’d imagine the fish market … I don’t know who decided Cape Town is not for us; our grandparents built this city.”
Questions were sent to Airbnb, but no response had been received by the time of publication.
