The City of Cape Town is advancing a proposed by-law to enforce existing rates policy on properties used primarily for short-term letting, such as Airbnb listings. Officials describe these as commercial operations requiring higher rates. The move could increase long-term rental supply amid housing affordability pressures.
The City of Cape Town aims to strengthen compliance with its current rates policy through a proposed by-law. "The City is not revising rates, but improving compliance with existing rates policy," spokesperson Luthando Tyhalibongo told Daily Maverick. The policy classifies properties used for short-term letting the majority of the time as commercial operations.
This enforcement targets listings on platforms like Airbnb, Booking.com and Lekkeslaap. For years, the distinction between residential and commercial use has gone largely unenforced. City officials state: "Any property used for short-term letting the majority of the time is primarily a commercial short-term letting business."
Industry figures anticipate market shifts. Nick Taylor, managing director of Nox Cape Town, which manages about 200 short-term rental properties, outlined three owner options: absorb additional costs, switch to long-term rentals or sell. "There are really three choices," he says. The additional expense could range between 4.5% and 6.5% of revenue, according to initial modelling.
Cape Town has over 26,000 Airbnb listings, with roughly 70% of residential units in the CBD either hotel-managed or on Airbnb, per Only Realty CEO Grant Smee. Rental inflation in the Western Cape reached 6.9% year on year in March. The by-law remains under discussion and applies platform-agnostically.
