The City of Cape Town's draft Short-Term Letting Bylaw has been met with criticism from various groups, who argue that it does not do enough to address the city's housing crisis. According to the Inner City Local Spatial Development Framework, only 30% of apartments or houses in the inner city are available for long-term leases or occupied by their owners, with the remainder being used for short-term rentals or hotel management.
The City of Cape Town has insisted that the housing crisis is a supply issue, with Mayor Geordin Hill-Lewis stating that 14,000 affordable homes are on the way. However, these homes remain largely unfunded and unbuilt, and critics argue that the city should be more concerned about the 23,000 existing homes that could be used for long-term rentals but are instead operating as short-term listings on Airbnb.
Airbnb listings in Cape Town tend to be concentrated in certain areas and skew to the higher end of the market, with about 84% of the city's 27,000+ Airbnb listings being entire dwellings, not spare rooms or backyard cottages. This has led to a phenomenon called downraiding, where the removal of a flat from the long-term market in one area pushes would-be tenants to search in other areas, driving up rents and displacing people across the city.
The draft bylaw does propose some useful measures, including registration and data sharing requirements for platforms, as well as a cover charge for short-term rentals. However, critics argue that these measures do not go far enough to address the issue, and that a primary-residence requirement for Airbnb listings is needed to prevent a few dominant commercial mega-hosts from swallowing up supply and hollowing out neighborhoods.
A primary-residence requirement has been shown to be effective in other cities, such as Vancouver, Canada, which implemented such a policy in 2018 and saw record numbers of visitors in 2024, as well as a decrease in rents. The City of Vancouver saw renters "pay an average of $147 (CAD) less each month than they would have if the City had not restricted [short-term rentals] to a host's principal residence".
Regulating short-term letting will not solve the housing crisis on its own, but it can be a step in the right direction. Responsible regulation must sit alongside the harder work of building promised homes, releasing well-located public land for social housing, unlocking national funding, and instituting more mechanisms for rent stabilization.
The City's draft bylaw is open for comment until October 5, and critics are calling for stricter regulations to address the housing crisis. The Cape Town Collective Ratepayers' Association has warned that the draft bylaw "may not be sufficient to alter the commercial incentives that favour short-term letting over long-term residential tenancies".
Key points
- The City of Cape Town's draft Airbnb bylaw has been criticized for not doing enough to address the city's housing crisis.
- A primary-residence requirement for Airbnb listings could be an effective solution to the housing crisis.
- Regulating short-term letting is just one part of the solution to the housing crisis, and must be accompanied by other measures such as building affordable housing and implementing rent stabilization mechanisms.
