Cape Town is set to introduce new regulations for short-term rental platforms like Airbnb, aiming to integrate them into the formal tourism industry and address concerns about housing availability and affordability.
Cape Town is poised to emulate major cities worldwide, such as Amsterdam, Barcelona, Berlin, London, New York, Rome, San Francisco, and Vienna, by imposing stricter regulations on platforms like Airbnb. The Department of Tourism is finalizing new rules, a process underway since at least 2023, designed to align short-term rentals with established tourism accommodation standards.
These anticipated regulations could significantly impact buy-to-let investment trends and the broader residential rental market. 'The objective of these new policies is to integrate short-term rentals into the formal tourism industry,' explains Schaefer. Platforms like Airbnb and similar may soon be required to adhere to the same registration, taxation, and health and safety regulations as hotels, guesthouses, and backpacker lodges. These changes are expected to introduce stricter compliance requirements for Airbnb hosts, potentially discouraging both new and existing investors from purchasing properties solely for short-term letting. Schaefer further notes that the new rules may limit the number of days a property can be rented out annually on these platforms, a strategy employed by other cities to mitigate the impact of short-term rentals on housing availability.Housing activists argue that the surge in Airbnb listings has exacerbated the shortage of affordable long-term rentals in Cape Town. The city's popularity among tourists has made short-term rentals highly profitable. According to Inside Airbnb, an independent data platform, there are over 23,000 Airbnb listings in the city, yet at the start of the year, fewer than 700 long-term rental listings were available in the Central Cape Town area. 'Our research shows that short-term rental prices vary widely, from R950 per night to as much as R20,000 per night for luxury accommodations,' At the same time, long-term rental prices in Cape Town remain significantly higher than in other major South African cities, with small studio apartments starting at around R5,000 per month and single rooms in shared houses at approximately R4,500 per month. For trustees and directors of sectional title (ST) schemes, the new regulations may provide long-awaited relief. Many sectional title complexes in Cape Town, Durban, and Johannesburg have struggled to regulate short-term letting due to resistance from property owners who financially benefit from Airbnb. 'In many complexes, we see a constant influx of short-term tenants, leading to security concerns, increased maintenance costs, and difficulty in managing shared amenities,' notes Schaefer. While the Sectional Titles Schemes Management Act (STSMA) allows trustees to restrict or ban short-term letting through a special resolution, securing enough votes to implement these changes has been challenging – especially when multiple owners profit from Airbnb. However, the new regulations could change that. If investors opt to sell or switch to long-term rentals, there could be a shift in ownership priorities, with more emphasis on security, property values, and tenant stability. 'In the medium term, this may also help to encourage more sectional title owners to volunteer as trustees and be more willing to engage professional property management services to ensure well-run and compliant housing schemes,' adds Schaefer.
AIRBNB Cape Town Short-Term Rentals Regulation Housing Market Rental Crisis Tourism Sectional Title Schemes
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