Africa-Press – South-Africa. The City of Cape Town has proposed new draft amendments to its Rates Policy, specifically targeting the city’s short-term rentals market.
Under the current policy, properties used for commercial short-term letting are required to pay commercial property rates.
However, this does not currently apply to long-term rentals or to residential properties that are partially rented out, such as a two-bedroom house in which one of the rooms is rented out by the property owner.
The city has proposed introducing a short-term letting bylaw, which they say will improve compliance with current commercial letting regulations.
The bylaw will designate a residential property as commercial if it is available for short-term letting for more than 50% of its “total annual room nights”.
This is the property’s maximum short-term rental availability, calculated by multiplying the total number of bedrooms by 365 days.
Multiplying the number of rooms available for short-term letting by the number of nights they are available for, and then dividing by the total annual room nights, gives the property’s current short-term letting availability.
For example, if a person living in a three-bedroom house were to rent out one of their bedrooms for an entire year, that would constitute a 33% short-term letting availability.
If they were to rent out two of their rooms for a year, however, that would constitute a 66% short-term letting availability and would then classify the property as commercial.
The by-law will also allow the city to collect information on a property’s short-term letting availability directly from online letting platforms to better determine its commercial status.
“Over time, the city has been working to systematically identify commercial short-term letting properties where residential rates are incorrectly being paid instead of commercial rates,” the city said.
“The proposed bylaw will aim to take these efforts a step further to improve Rates Policy compliance and ensure fairness in the accommodation sector.”
The city has said it will begin a public participation process on the proposed bylaw in the near future, and foresees policy implementation sometime before 1 July 2027.
Fixing Cape Town’s rental crisis
Ndifuna Ukwazi researcher and coordinator Jens Horber
The passing of the proposed bylaw could address Cape Town’s growing rental crisis, which has been largely driven by unchecked growth in the short-term rental market.
According to Inside Airbnb, there are currently over 26,000 Airbnb listings for the City of Cape Town. This is more than the combined listings of Barcelona and Amsterdam, two of the most popular tourist destinations in the world.
Meanwhile, there are fewer than 2,000 long-term rental listings in the city, with 2025 seeing price increases of nearly 30% for studio apartments in Cape Town’s CBD.
Ndifuna Ukwazi researcher and coordinator Jens Horber previously spoke about the problem of Cape Town’s short-term rentals market in an interview with CapeTalk.
“It’s important to look at the details,” Horber said. “In specific areas, like the city centre and Sea Point, there are high numbers of short-term rentals.”
“They are having a significant impact on the availability of long-term accommodation in those areas, and are contributing to putting the rent up.”
Horber said this incentivises property development in these areas to cater more towards short-term rental owners, further exacerbating the issue.
“It’s high time that this issue is addressed,” Horber said. “There has been talk by the Tourism Ministry for at least the past six years to come out with some kind of intervention to regulate short-term rentals.”
In January 2026, Tourism Minister Patricia de Lille acknowledged that the unchecked growth of the short-term rental market was directly responsible for Cape Town’s inflated rental prices.
Just last month, De Lille invited the public to comment on a draft Code of Good Practice for regulating short-term rental platforms like Airbnb and Booking.com.
Officials from the City of Cape Town have previously argued that the problem lies in low housing availability rather than overtourism.
“The city has only in the last eight months or so started speaking about it, and is currently working on a system to require all short-term listings to register with the city,” Horber explained.
As part of the proposed bylaw, the city will require all rental listings to register with them and display a city-issued registration number on their online listing pages.
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