18 November 2025
The City of Cape Town Local Spatial Development Framework states that 70% of all residential units in the inner city “are either hotel managed or Airbnb”. Archive photo.
There is a severe shortage of rental stock for local residents in Cape Town’s inner city, and what is available is priced beyond the reach of the majority of Capetonians. With a median household income of just over R14,000 a month, according to Stats SA, buying an apartment is also not an option.
The cheapest apartment in the new Harbour Arch development, for instance, is R1.7-million for 35m², requiring a monthly income of about R50,000 to obtain a bond.
There are a number of reasons for the lack of available long-term accommodation. Among them are population growth outstripping new residential units, foreign buyers outbidding locals, and what has been termed “the Airbnb effect”, in which housing availability is reduced by landlords letting apartments for short-term stays, predominantly to tourists.
The City is well aware of this. The Local Spatial Development Framework (LSDF) for the central business district, approved by council on 30 October, states that 70% of all residential units (almost all of which are apartments) in the inner city “are either hotel managed or Airbnb”. Only 30% of apartments or houses in the inner city are rented or occupied by owners.
The LSDF also predicts that as more tourists seek short-term rentals, the availability of housing in the inner city will further decrease.
The LSDF covers the Foreshore and central business district (CBD) up to Orange Street, and from Tennant Street on the southeast District Six side to Buitengracht on the northwest Bo-Kaap side. It also includes De Waterkant. This is predominantly Ward 115.
According to the LSDF, there were 8,327 “residential dwelling units” (apartments) in this area in 2018. The City planners calculated there would be a potential 11,815 units in 2024. The exact current number is not known.
But the site Inside Airbnb shows that of the 26,877 Airbnb listings in Cape Town, 5,662 are in Ward 115. If all these listings are active, it means half of all available residential units in the area are tied up for short-term stays rather than being available to rent long-term.
Additionally, the income from these 5,662 Airbnb listings is not being spread among an equivalent number of apartment owners. Rather, the income is going to a relatively small number of individuals or companies that own multiple apartments.
Inside Airbnb shows more than 70% of the listings are multiple listings (one person offering more than one apartment or room). There are 49 people or companies with 15 or more listings, and three people who have 100 or more listings under their name. However, Airbnb reviews indicate the person with the most inner city listings, a “Belinda”, who has 156 listings, is running a scam.
The impact of short-term letting on inner city rental affordability is reflected in the LSDF. It states the price of rentals as of 31 October 2022 means the maximum amount of space an average Cape Town household would be able to rent was 22m². “Only four properties of this size or lower were listed at the time of analysis.”
The situation seems to have got worse.
In April this year, industrial engineer and data analyst Melville du Plessis crunched the numbers for rental accommodation in Woodstock, Vredehoek, Oranjezicht, Gardens, and the city centre.
Du Plessis found the average cost of renting a studio apartment (55m² or less) was R15,628 per month. This amounted to R474 per m². But given that many studio apartments in new developments, such as Harbour Arch, are at 33m² or less, the amount being paid for floor space is often significantly higher than this.
Du Plessis also found the average rental for a two-bedroom apartment was R34,441 per month, with one-bedroom apartments averaging R20,030 per month.
According to the latest figures from Stats SA, the average household income in Cape Town is R32,300 per month. The median income in Cape Town is R14,100. Median income is the middle point in a dataset, meaning half of households earn below R14,100 and half earn above it.
Rental affordability calculators are based on rent making up no more than 30% of your income after tax and other deductions, meaning the average Cape Town household can afford a rental of R10,000 or less. But the median figure is a more accurate reflection of household income: half of households can only pay R4,200 per month in rental.
The LSDF estimates there is demand for up to 21,000 apartments in the inner city, which will remain unmet for at least the next 15 years. However, 80% of this demand is in the “affordable housing submarkets”, defined by the LSDF as households earning less than R22,000 per month. Yet this is more than 50% above the median household income.
The LSDF authors calculated that with current income levels, “residential property in the CBD is unaffordable for more than 90% of the population”.
More recent long-term rental trends, calculated by du Plessis, found that between June 2024 and February 2025, there was a 20% reduction in available long-term rental listings, alongside rental prices increasing by as much as 30% in some areas.
In August last year, du Plessis also crunched the Airbnb numbers. At that stage, there were 23,564 listings in Cape Town. He found Cape Town was number eight in the world in terms of the number of Airbnb listings compared to other cities, ahead of cities such as Lisbon, Berlin, and Barcelona.
But when du Plessis measured the number of Airbnb listings against the number of tourists, Cape Town was number one by a large margin, with just less than two (1.96) Airbnb listings per 100 tourists. Copenhagen, in second place, had 0.67 Airbnb listings per 100 tourists.
Drilling down to the Cape Town city centre and immediately surrounding suburbs (Woodstock to Bakoven), du Plessis found the ratio of Airbnb/km² jumped from 59 to 160 Airbnb listings per square kilometre. Of these, 82% were for a full house or apartment, rather than a room, revealing that the vast majority of listings remove apartments from long-term rental stock.
When comparing the number of Airbnb listings to the number of apartments available for long-term rent at the time in this same area, he found there were 13.5 Airbnb apartments to every one long-term rental apartment.
Du Plessis also looked at rental income against average Airbnb income in the city bowl and surrounds. Based on a 60% occupancy rate for an Airbnb listing, only a two-bedroom house in the city centre provides a better income for a landlord than short-term letting for visitors.
Airbnb is not going to implement measures to reduce the impact of short-term letting on the local housing market. However, as Airbnb’s former head of global strategy, Chris Lehane told this reporter while in Cape Town in 2017, the company was willing to work with Cape Town, and any other city that approached them, to develop strategies to reduce what is known as the Airbnb effect.
At the time, Lehane said Airbnb welcomed tailormade regulations that would limit negative impacts. Cape Town merely had to say what regulations it required to suit the city’s specific needs.
“I totally believe in regulation,” said Lehane. “We think there should be new laws for new things. There absolutely needs to be laws that help protect and promote society’s greater interests.”
One of the possible regulations, he said, was for the City to give Airbnb the authority to collect a tax on the transaction between host and guest on Airbnb’s platform, and pay this over to the City every month. He said some cities chose to use the income to build social housing. In the eight intervening years, the City has not taken this opportunity.
City spokesperson Luthando Tyhalibongo said the City has been assessing the short-term rental situation and is looking to levy commercial rates on properties used for short-term letting. This would be in line with what traditional hotels and guesthouses are charged. A short-term rental by-law is being developed for this.
However, Tyhalibongo said the City would not set a limit on the number of nights a property could be used for short-term letting.
“The City continues to support the tourist economy in the strongest terms, and short-term letting is a foundational dynamic in appealing to diverse tourist needs,” he said.
He said the LSDF highlighted the need for both the private and public sector to provide residential units in the inner city, and there was a list of government-owned land parcels, most of which already have development proposals that include affordable housing.
“Work is ongoing on a central Cape Town pipeline of about 5,000 affordable units as part of broader pipeline of over 12,000 affordable units in well-located parts of the metro.”
Regarding taking up Airbnb’s offer made at least eight years ago to implement City-led regulation of the short-term letting market, he said the City was “engaging with short-term letting platforms as well as the short-term letting sector.”