This article has been amended since originally published.
Moves to formalise short-term rental regulation in the Western Cape is gaining momentum with industry bodies, academics and the City of Cape Town highlighting the urgency of intervention and the risks of applying Cape Town-aligned measures across the province.
The debate follows sustained pressure from inner-city communities, including Bo-Kaap, who argue that unchecked short-term rental growth is eroding cohesion, driving up rents and accelerating displacement. According to Ground Up, Cape Town’s Local Spatial Development Framework estimates that 70% of inner-city residential units are now used for short-term rentals, underscoring the extent of market distortion in high-demand neighbourhoods.
Industry pushes for context-specific regulation
FEDHASA Cape Chairperson Lee-Anne Singer told Tourism Update that, while the association supports the principles of fairness, safety and compliance, “a single approach designed for Cape Town’s dense and pressured market cannot simply be copied across the Western Cape”. Singer warned that smaller towns and rural areas rely on short-term rentals to fill accommodation gaps and remain competitive outside peak season. Applying inner-city rules province-wide “could unintentionally push out small operators that play an important role in their communities”.
Singer said FEDHASA supports a registration system but flagged the operational and financial risks of applying commercial rates to every host. “If every host, including someone letting out a spare room a few weekends a year, is treated like a commercial operator, many will simply exit or drift into non-compliance,” she said. The association is calling for clear thresholds distinguishing casual hosting from commercial activity, a phased implementation process and transparency around enforcement.
With regard to Bo-Kaap, Singer acknowledged the concerns raised by residents and said targeted measures in high-pressure areas, supported by zoning enforcement and limits on non-resident operators, may be appropriate. In towns without these pressures, she said a lighter regime would avoid harming local tourism economies.
FEDHASA also backed a national registration system to ensure clarity and consistency with municipalities adding local measures where necessary.
Pressure extends beyond Bo-Kaap
Professor of Geography and Environmental Studies at the University of Stellenbosch Gustav Visser added that short-term rental pressures are not confined to Bo-Kaap and that wider “touristification” of central Cape Town has been underway for two decades. Visser pointed to neighbourhoods such as Gardens, De Waterkant, Green Point and Sea Point where long-term rental distortions and tourism-led gentrification are now entrenched.
He noted that, while short-term rentals have affected the “average renter”, pressure on prices predates platforms like Airbnb. “Rents have been going up a lot since the beginning 2000s – so before Airbnb,” he said, adding that city improvement districts and urban-renewal schemes play a major role in reshaping the CBD long before home-sharing entered the market.
Regarding potential unintended consequences of applying Cape Town’s rules across the province, Visser said: “As soon as you interfere in the marketplace, price distortions will follow.” He also questioned the feasibility of adopting European-style bans or quotas, noting that these models depend on strong local enforcement capacity, which many South African municipalities lack.
City advances regulatory steps
City of Cape Town Spokesperson Luthando Tyhalibongo said its policy intention is to “level the playing field between traditional tourist accommodation and short-term rentals that are commercial enterprises”. The city is currently identifying properties that violate the existing rates policy and is developing a dedicated short-term rental by-law. Engagements with platforms and the letting sector are “well-advanced”.
Questions about how registration will improve visibility in adjacent neighbourhoods, and how the city will distinguish casual hosts from commercial operators, remain “premature” as the by-law is still being formulated.
