Residents of Cape Town have until October 5th to voice their opinions regarding the proposed property rental regulations. The City of Cape Town has introduced new rules for short-term rentals, which have received cautious support from a major taxpayer advocacy organization.
The Cape Town Collective Ratepayers’ Association (CTCRA) welcomed the City's draft Short-Term Rental By-law for 2026 but called for stricter measures to address the growing use of residential properties for short-term accommodation.
Essentially, the municipality aims to better track homes and apartments rented out to tourists and visitors on a short-term basis through platforms like Airbnb. According to the draft by-law, short-term rental properties must be registered with the City and possess a City-issued registration number when advertisements are posted.
The City also requires access to information regarding the frequency of availability and usage of these properties for short-term stays. This will allow officials to determine whether the property remains predominantly a residential unit or effectively functions as commercial lodging.
If a property is used for short-term rentals for more than half a year, the City may classify it as commercial lodging and levy corresponding municipal charges. Properties rented short-term for less than six months may retain residential status, provided they comply with City requirements. Standard long-term lease agreements, where the tenant uses the premises as a primary residence, are regulated differently.
The changes in tariffs for affected properties are expected to take effect on July 1, 2027. CTCRA supported the principle of proper regulation of short-term rentals and that properties operating as hotels should contribute fairly to municipal revenue.
However, the association questioned whether this draft could achieve one of its most important goals—stimulating the return of properties to the long-term rental market. The organization noted: 'While this may bring in additional revenue, CTCRA is concerned that the financial impact may be insufficient to change the commercial incentives favoring short-term rentals over long-term residential leases.'
CTCRA warned that owners might simply absorb the additional municipal costs or pass them on to visitors through a slight increase in the daily rate. The association emphasized: 'In many cases, short-term rentals can remain more profitable than long-term rentals, especially in areas with high tourist demand.'
The association reported that many residents expressed concerns about the increasing number of homes being purchased or operated primarily for short-term stays. While recognizing owners' right to earn income from their property, CTCRA insisted on balancing these rights with the interests of the wider public, particularly the need for stable and affordable housing.
The City has identified three main objectives for the draft by-law: increasing municipal revenue, creating a fairer system between short-term rental operators and official hotels and guesthouses, and encouraging more properties onto the long-term rental market. CTCRA believes the draft will likely help achieve the first two goals, but it remains unclear if it will significantly improve the housing supply.
The organization suggested that Cape Town consider additional measures implemented in other highly tourist-dependent cities globally. These measures include limits on the number of days a property can be rented to tourists annually, different rules for private owners versus investment properties, zoning, and stricter control in areas with a high concentration of short-term rental units. CTCRA advised considering such measures within Cape Town's legal and economic context.
The association also linked this discussion to the issues of financial pressure already being placed on residential property owners. It was noted that during the City's budget processes in 2025 and 2026, CTCRA raised questions about increasing the share of municipal revenue derived from property owners. Although the Rand rate in Cape Town may be competitive compared to other municipalities, CTCRA stated that rising property values could still lead to a significant increase in municipal bills. These costs could also affect tenants if landlords pass on higher property expenses through rent increases.
CTCRA Chairperson Bas Zuidenberg stated that the proposed by-law is a constructive starting point. He added: 'Important details still require further consideration, especially regarding the potential impact on housing affordability and cost. We hope the City will take seriously the comments submitted by residents and civil society organizations.'
The City's public participation process regarding this by-law continues until October 5, 2026.