Answering a question from FEDHASA Cape Chair, Lee-Anne Singer, at a recent meeting, Mayor Geordin Hill-Lewis said the City’s proposed short-term rental rules are intended to create fairer competition for formal accommodation businesses by tightening rates enforcement on commercially operated short-term lets. He said the intention is not to go after families renting out a cottage, spare room, or home for part of the year to supplement their income, but to address large commercial operators running multiple apartments as “decentralised” hotel businesses while continuing to pay residential rates.
According to the City, the proposed changes are linked to concerns raised by hotel investors who say it is becoming more difficult to justify new hospitality developments when large-scale short-term rental operators are able to compete on a different rates structure. The mayor said this imbalance is discouraging investment in new hotels, despite Cape Town’s continued tourism growth and demand for formal accommodation.
The proposed changes form part of the City’s amended Rates Policy for 2026/27 and sit alongside a forthcoming Short-Term Letting By-Law. While the policy already requires properties used for commercial short-term letting to pay commercial property rates, the City says enforcement has been slow and challenging under the current system.
To improve compliance, Cape Town plans to source data directly from online booking platforms, such as Airbnb and Booking.com, to determine how often properties are made available for short-term letting. This is intended to help the City identify operators working at commercial scale and apply the correct rates category more efficiently.
The City has indicated that the aim is not primarily to raise significant new revenue, but to support fairer competition, encourage investment in the formal accommodation sector and, potentially, ease pressure in the residential rental market if some units move out of the short-term letting pool.
Public comment on the amended Rates Policy is open until 30 April 2026 as part of the City’s wider budget process. A separate public participation process on the proposed Short-Term Letting By-Law is expected to follow.
FEDHASA members who wish to review the amended Rates Policy or submit comment can do so via the City of Cape Town’s public participation platform.
