The draft By-law seeks to increase municipal revenue from short-term letting, create a more equitable regulatory environment for the formal hospitality sector, and encourage some residential properties to return to the long-term rental market.

CTCRA supports the principle that short-term letting should be appropriately regulated and that properties operating as commercial accommodation should make a fair contribution towards municipal revenue. It also welcomes the possibility that the By-law could reduce some of the financial pressure currently placed on residential ratepayers.

However, CTCRA believes that the draft requires further development if it is to have a meaningful effect on the availability of long-term rental housing.
Many residents have expressed concern about the growing number of residential properties being acquired or operated primarily for short-term accommodation. CTCRA recognises the rights of property owners to generate income from their assets, but believes these rights must be balanced against the broader public interest, including the need for stable, accessible and affordable housing.

In its comments on the City’s 2025 and 2026 budgets, CTCRA raised concerns about the increasing proportion of municipal revenue being collected from property owners. Although the City’s rate-in-the-rand may compare favourably with that of other municipalities, rising property valuations can still result in substantial increases in municipal rates.

These increases affect both homeowners and tenants, as property-related costs are frequently reflected in rental prices. CTCRA therefore supports efforts to broaden the municipal revenue base and ensure that commercially operated short-term letting properties contribute appropriately.

The City has identified three principal intended outcomes for the draft By-law:

1. Increasing municipal revenue;
2. Creating a more level regulatory environment for formal hospitality businesses; and
3. Returning housing stock to the long-term rental market.

CTCRA believes that the draft is likely to contribute towards the first two objectives. However, it is less clear whether it will achieve the third.

As currently drafted, the By-law primarily establishes a mechanism through which qualifying short-term letting properties may be rated or treated differently for municipal purposes. While this may generate additional revenue, CTCRA is concerned that the financial impact may not be sufficient to alter the commercial incentives that favour short-term letting over long-term residential tenancies.

Property owners may absorb the additional costs or pass them on through slightly higher nightly rates. In many cases, short-term letting may remain more profitable than long-term leasing, particularly in areas with strong tourism demand.

CTCRA therefore believes that further measures may be required if the City intends to increase the supply of long-term rental housing and protect the residential character of affected neighbourhoods.

Other tourism-intensive cities across the world have introduced a range of regulatory approaches in response to similar concerns, including registration systems, limits on the number of letting days, distinctions between primary residences and investment properties, zoning controls, enforcement mechanisms and area-specific restrictions.

CTCRA encourages the City to consider whether additional measures of this nature may be appropriate in Cape Town’s legal and economic context.

CTCRA supports the overall purpose of regulating short-term letting and ensuring that commercial accommodation operators contribute fairly. However, it believes the current draft should be strengthened to provide clearer evidence that it will improve housing availability and affordability for both homeowners and tenants.

“The publication of the Draft Short-Term Letting By-law is a constructive first step. However, important details still require further consideration, particularly regarding its likely effect on housing availability and affordability. We hope the City will engage seriously with the comments submitted by residents and civic organisations,” said CTCRA Chair Bas Zuidberg.