Can Cape Town accommodate both tourists and residents?
Anyone looking for a flat to rent in Cape Town knows the city has a housing crisis. In popular areas, desirable properties are snapped up as soon as they come on the rental market, having been viewed by multiple hopeful prospective tenants. The rise of short-term rental platforms like Airbnb has been blamed by some for a dramatic shift in the housing market and the difficulty faced by locals trying to find affordable rental accommodation. But the reality is far more complex. Airbnb is only one factor influencing the housing market, and its impact is not exclusively negative. Short-term lets bring advantages as well as disadvantages. We look at both sides of the story.
Short-term lets
In the last few years, and especially since the Covid-19 pandemic, Cape Town has seen a surge in the popularity of short-term rentals. In areas like the City Bowl and Atlantic Seaboard, Airbnb listings have increased by 190% since 2022. According to Inside Airbnb, Cape Town has 23,564 listings, which attract an average price of R2367 per night. Most of these are entire homes. However, this is not the only source of pressure on the housing market.
Internal migration
The Western Cape has long been a destination for internal migration. About one in five of the province’s 7.433 million people was born elsewhere in the country, with two thirds coming from the Eastern Cape. Recently, inward migration has increased. Over the past 10 years, 295,908 people came to the Western Cape from other provinces, while 112,520 left, giving the province the highest inter-provincial net increase in the country at 183,388. (Source: StatsSA’s 2023 Migration Profile Report for South Africa, which analysed South Africa’s migration patterns.) One look at the number of Gauteng numberplates on our roads indicates that inward migration from Gauteng has increased, notably since Covid-19. Gauteng’s share of outmigration according to Census 2022 was 26.7%. This is an increase from 17.8% in Census 2011. Furthermore, the Western Cape is the place people are least likely to leave. Joburgers who come to Cape Town do so for a better life, with no intention of leaving, whereas people who move to Joburg often do so for economic and career advancement, with a very clear deadline in mind. Internal migration, whether from Eastern Cape or Gauteng, contributes to the shortage of housing stock. It’s inaccurate to attribute the entire problem to Airbnb.
Community concerns about short-term lets
Certain sectors of society have concerns about the negative effects of short-term lets and platforms such as Airbnb, and these concerns are legitimate. Some worry about the erosion of neighbourhood integrity and the displacement of families. When properties are converted to temporary accommodation, the stability enjoyed by long-term residents may be undermined. They may worry about noise and safety. They may feel a loss of cultural identity in areas that have historically defined Cape Town.
Undeniably, the growth in the short-term rental market has an impact on property affordability in the Mother City. It is not only rental prices that have been pushed up; property values are also rising, although this is driven by a variety of factors, including the attractiveness of Cape Town as a destination for both tourists and internal migrants. People relocating from Joburg remark on the high house prices here relative to their Gauteng property values. First-time buyers find it very difficult to get on the property ladder in Cape Town.
Advantages of short-term lets for communities
There are two sides to every story. Cape Town relies on tourism. As the rand has weakened over the years, South Africa has become an increasingly attractive destination for visitors from Europe, the UK, and the US. But even with a strong currency, hotel stays are expensive, especially when meals are factored in. The expansion of the accommodation market has made Cape Town accessible to a wider cohort of visitors. Furthermore, Airbnb has brought tourism into neighbourhoods that did not traditionally serve this trade, benefitting the local economy. Visitors occupying an entire house often buy groceries at local shops, dine in local restaurants, etc., supporting community entrepreneurs. There is an indirect, spin-off benefit in the increased need for support services, such as cleaners and Uber drivers.
Airbnb can also reveal previously “hidden” areas of Cape Town, taking visitors beyond the typical tourist areas. Allowing people to experience a more authentic side of Cape Town can encourage longer-term interest and engagement with the city and lead to return visits.
Furthermore, not all Airbnb hosts are wealthy tycoons with a portfolio of rental properties. Many are private individuals trying to supplement their meagre income. Many hosts move out of their own homes during the peak season and move in with family in order to make the entire property available to guests (a much more attractive proposition than a room in a shared home). Hosts report that Airbnb is a vital source of supplemental income which helps them make ends meet, as the cost of living continues to escalate.
The need for regulation
Proponents for both sides of the argument agree on the need for regulation. In response to a request from the Federated Hospitality Association of South Africa (FEDHASA), the Department of Tourism revealed its intention to regulate Airbnb and other home-sharing apps in April 2019 through the Tourism Amendment Bill. It published a green paper on the development and promotion of tourism in South Africa in October 2023, undertaking a policy review process that will inform the regulations in the Bill. Under consideration is a threshold for Airbnb locations in South Africa, including limits on how many nights a guest can book at one property. The aim is to keep properties available for long-term rental while still allowing homeowners to benefit from Airbnb during peak seasons. It’s hard to see quite how that would work; tenants want a home all year round. But requiring hosts to register with local authorities could provide greater transparency and more effective oversight of the short-term rental market.
The Chair of FEDHASA, Rosemary Anders, summarises: “We need to ensure that government and local authorities implement sustainable tourism policies that protect the economy, local communities and residents’ rights while simultaneously providing attractive accommodation options for tourists. This approach necessitates frameworks that safeguard all stakeholders.”
For further information
If you are a property owner, Airbnb host, or tenant with any questions on rental housing legislation or landlord–tenant relations, contact one of our eviction attorneys on 086 099 5146 or simon@sdlaw.co.za. Simon Dippenaar & Associates, Inc. is a law firm of specialist eviction lawyers in Cape Town, Johannesburg and Durban working hard to help landlords and tenants maintain healthy working relationships.