Cape Town's draft short-term letting by-law aims for fair commercial accommodation, but concerns remain for local housing

This initiative, which opened for public comments on 4 August 2026, aims to ensure an "equal playing field" between short-term rental businesses and hotels, according to Hill-Lewis. The by-law proposes that properties available for short-term letting for over 50% of annual room nights will be considered commercial, with a planned effective date of 1 July 2027. While the City of Cape Town states the by-law's purpose is to ensure fairness in the commercial accommodation sector, it does not explicitly address the inner-city housing shortage for middle-income Capetonians.

Daily Maverick's reporting in June 2026, based on Inside Airbnb data, found that 8.1% of Airbnb hosts in Cape Town were based outside South Africa, with 62 foreign hosts managing three or more listings. This research also indicated a median foreign property purchase price of R2.7 million, suggesting foreign buyers contribute to the housing squeeze beyond the high-end market. Bas Zuidberg, chairperson of the Cape Town Collective Ratepayers’ Association CTCRA, expressed concern that the by-law, as drafted, might not sufficiently disincentivize short-term letting over long-term residential tenancies, as strong tourism demand could absorb increased charges.

The CTCRA believes further measures may be needed to