As cities around the world grapple with the impact of short-term tourism letting, Airbnb has defended its impact on housing availability and affordability in Cape Town with a new data report that quantifies its impact on the local market. However, the research has been criticised for not being impartial and for ignoring the real issues at hand.

Airbnb’s report indicates dedicated rentals hosted on Airbnb account for less than 1% of all formal housing units across Cape Town. “This represents less than 1.5% of the additional housing units to meet growing housing demand over the next four years,” Airbnb said in a statement.

Ash Muller, Principal Broker for property consultancy Ask Ash, said she is sceptical about the impartiality of the data because it was not prepared by third-party researchers.

Nick Budlender, Urban Policy Researcher at housing activism group Ndifuna Ukwazi, said he does not believe the data properly addresses the real critiques of Airbnb.

“They know the critique is not that it raises house prices or removes housing across Cape Town. The critique is about very specific areas where Airbnbs are heavily concentrated.”

Key data

Data from InsideAirbnb, a platform using data to show the impact of Airbnb on communities, indicates over 23 000 Airbnbs operate in Cape Town with the majority (over 19 000) listed as homes or apartments (as opposed to a room to rent in a home). Four wards in Cape Town – within central areas of the Cape Town CBD, Woodstock, Observatory and the Atlantic Seaboard including Sea Point and Green Point – account for nearly half of these accommodations.

In 2023, Airbnbs in Cape Town hosted 700 000 guests. Airbnb said this translates into an estimated R14.2bn contribution to GDP and creation of 42 000 “part-time, full-time and seasonal jobs supported by Airbnb activity”.

Velma Corcoran, Regional Lead for Middle East and Africa, said: “Hosting on Airbnb provides much needed income to families in South Africa and supports thousands of jobs across the wider economy.”

However, Budlender said: “Tourism is a vitally important sector in South Africa. We desperately need economic growth and labour absorption – tourism offers both. Claiming that Airbnb is responsible for all tourism benefits is a bit of a distortion.”

Investor confidence

According to the City of Cape Town’s draft local spatial development framework, currently open for comment, investor confidence is high but property generally remains out of reach for 90% of Cape Town’s households in need of accommodation. “Although a large concentration of employees work in the CBD, they still cannot afford to even rent accommodation in the CBD.

“With over 70% of CBD residential accommodation stock targeting the hospitality industry, the growth in the visitor economy will no doubt suppress long-term letting even more. There are no policies for managing short-term rentals and the impact it has on the neutralisation of the availability of the units for Capetonians who want to rent close to their work locations in the CBD.”

Budlender said the housing crisis is a complex, multi-faceted issue with a range of structural drivers including semigration, interest rates, income dynamics and short-term letting.

“What seems clear in Cape Town, and has been shown very clearly in other contexts, is that Airbnb does distort the housing market.”

This is reflected in the fact that even high-income earners are not able to afford to live in the central city and there is a fundamental shift in housing design and construction in the CBD, added Budlender.

“A micro-apartment of 15 to 30 square metres is an excellent base to explore the city but it is inappropriate as long-term housing.”

Muller said micro-apartment and studio developments are at an all-time high.

Demand expected to grow

Demand could grow even further. With the City of Cape Town aiming to double tourism numbers by 2035 and the introduction of South Africa’s nomad visa, these developments and short-term letting options will be necessary, believes Muller.

“They’re definitely filling a gap and a need for more space. Cape Town hasn’t had any major new hotel developments over the past few years.”

Balance can be achieved by tourism working “hand in hand” with sectors addressing the need for affordable housing, Muller said.

“Affordable housing and social housing is an issue – people need a place to live and it needs to be affordable and in the right location.”

Corcoran said: “As short-term rentals play an increasing role in South Africa’s tourism economy, we are calling on government to accelerate the introduction of a national registration system that gives authorities better visibility of hosting activity in specific areas. Data from a register of hosts can inform targeted and proportionate steps to regulate activity where there is a clear need. We look forward to continuing our positive work with authorities in South Africa.”

Despite the issues, Budlender does not believe an outright Airbnb ban is warranted. Ndifuna Ukwazi intends to conduct research into regulations next year but their preferred regulations could include limiting the number of days properties are listed on Airbnb and limiting listings of entire homes.

This does not penalise guesthouses and legitimate tourism businesses using the platform for marketing purposes. He also suggested the imposition of taxes in line with those paid by other tourism businesses and banning multiple listings by individuals and companies.

Budlender said the majority of listings in the CBD are owned by people with multiple listings and many own or manage over 100 properties “acting like unregulated hotels”.

InsideAirbnb data shows, in the four central wards, the majority of homes on the platform are owned by businesses or individuals with more than one listing. In Ward 115 (including the Atlantic Seaboard and City Bowl), businesses, individuals and management companies with 10 or more properties account for over 70% of listings.