Cape Town increasing supply of dwellings to address lack of affordable accommodation

There is no such thing as "affordable housing" in sought after areas. Even if it is artificially created, it will inevitably either be sub-let at a higher rate or it will make the area no longer sought after.

Short term letting is actually the only option for many buy to let investors when you do the sums. If you finance a 2 bedroom apartment in the city for R4m, the bond is going to be R42000 pm and the levies and rates another R10000 pm and that's before you've accounted for maintenance etc. So you have to generate closer to R60k pm to break even.

You are not easily going to find long term renters who will pay R60k pm or that would pass the vetting to do so. The only viable option then becomes short term rentals at R2-3k per night and hope for high occupancy.

If you think the problem is that it's the short term lets have driven the property values up, it's not as simple as that when you work out that you couldn't construct new apartments for the same price or less due to construction costs. Developers building new apartment blocks are not pricing 2 bed apartments at R4-6m in the city (if you're lucky) just because that's the market price they think they can get - they're setting them at level because that's the cost of the construction plus a profit margin without which it wouldn't be worth their while.

If you restrict short term lets the property market will collapse and yes, apartments will be come more affordable, but then you'll get urban decay as owners abandon their investments or no longer have funds to do any maintenance, new developements will dry up, and the end result will be deteriorating buildings and the slow creep of building hijackings and crime which becomes a feedback loop driving away businesses, making new development unviable (because the lower property values can't cover the cost of the construction) and generally setting the area on a trajectory to become the next Hillbrow.
 
If you restrict short term lets the property market will collapse and yes, apartments will be come more affordable, but then you'll get urban decay as owners abandon their investments or no longer have funds to do any maintenance, new developements will dry up, and the end result will be deteriorating buildings and the slow creep of building hijackings and crime which becomes a feedback loop driving away businesses, making new development unviable (because the lower property values can't cover the cost of the construction) and generally setting the area on a trajectory to become the next Hillbrow.
So there's no impact when a building, then street, then suburb, then community becomes seasonal and majority short-term renters?
 
So there's no impact when a building, then street, then suburb, then community becomes seasonal and majority short-term renters?
It's not as seasonal as you might think, and it makes the area more vibrant bringing in much more outside cash and opportunities for new businesses. Short term renters eat out a lot and spend more.
 
It's not as seasonal as you might think, and it makes the area more vibrant bringing in much more outside cash and opportunities for new businesses. Short term renters eat out a lot and spend more.
Yeah I don't buy that in the long term nor do I think anyone that purchases a primary residence appreciates having to deal with their building becoming a hotel with "guests" arriving at all hours and behaving as hotel guests do.
 
Yeah I don't buy that in the long term nor do I think anyone that purchases a primary residence appreciates having to deal with their building becoming a hotel with "guests" arriving at all hours and behaving as hotel guests do.
So you want to live in the middle of the city consistently rated as the best tourist destination in the world, enjoy the vibrant and prosperous environment that creates, but don't want to encounter tourists or visitors?

This doesn't seem very realistic.

Just a question. Since you'd clearly prefer a quieter, less touristy, residential neighbourhood, why wouldn't you simply choose to rather live in one of the adjacent suburbs?
 
So you want to live in the middle of the city consistently rated as the best tourist destination in the world, enjoy the vibrant and prosperous environment that creates, but don't want to encounter tourists or visitors?

This doesn't seem very realistic.

Just a question. Since you'd clearly prefer a quieter, less touristy, residential neighbourhood, why wouldn't you simply choose to rather live in one of the adjacent suburbs?
Eh? Airbnb is *everywhere* including in the Suburbs. That is part of the problem.
 
So you want to live in the middle of the city consistently rated as the best tourist destination in the world, enjoy the vibrant and prosperous environment that creates, but don't want to encounter tourists or visitors?

This doesn't seem very realistic.

Just a question. Since you'd clearly prefer a quieter, less touristy, residential neighbourhood, why wouldn't you simply choose to rather live in one of the adjacent suburbs?
I think you're missing the point of my post and somehow think it's limited to certain areas. Good to know people should just go elsewhere because you want to run a tourism business thing and it's just a matter of geography that makes an area popular, locals have nothing to do with it.
 
Eh? Airbnb is *everywhere* including in the Suburbs. That is part of the problem.
That's not what the actual data indicates. Of the approximate 5200 active (recent and frequently booked) AirBNB listings, >80% are concentrated in the stretch between Camps Bay, through Sea Point and Greenpoint into the CBD and Gardens. Incidentally, the same area has around 40000 total potential rental units meaning that active AirBNBs represent only about 12.5%, or one eighth of the available potential supply.

Screenshot 2025-01-20 at 10.22.14.png
 
That's not what the actual data indicates. Of the approximate 5200 active (recent and frequently booked) AirBNB listings, >80% are concentrated in the stretch between Camps Bay, through Sea Point and Greenpoint into the CBD and Gardens. Incidentally, the same area has around 40000 total potential rental units meaning that active AirBNBs represent only about 12.5%, or one eighth of the available potential supply.

View attachment 1789405

Holy cow. You are making our point for us.

And they *are* everywhere just not concentrated. We had to enforce the rules in our complex in the suburbs because somebody decided they were going to AirBnb their townhouse. Because the rest of the owners doesn't want a stream of strangers through our relatively tight-knit community (majority of residents are also owners).
 
I think you're missing the point of my post and somehow think it's limited to certain areas. Good to know people should just go elsewhere because you want to run a tourism business thing and it's just a matter of geography that makes an area popular, locals have nothing to do with it.
It IS limited to certain areas, and it IS a matter of geography. That's how tourism works. You're basically advocating either against tourism or for forcing visitors into hotels. The latter wouldn't make any material difference since all that would happen is that blocks would become "ApartHotels" (already happening) and your pristine existence would be disturbed by additional hotels going up all around you (already happening).
 
Holy cow. You are making our point for us.

And they *are* everywhere just not concentrated.
If you look at that map clearing showing the concentration is in Camps Bay through to the CBD and conclude that are "everywhere" then I question your definition of "Cape Town".
 
Holy cow. You are making our point for us.

And they *are* everywhere just not concentrated. We had to enforce the rules in our complex in the suburbs because somebody decided they were going to AirBnb their townhouse. Because the rest of the owners doesn't want a stream of strangers through our relatively tight-knit community (majority of residents are also owners).
Enforcing the rules at an HOA/Body Corporate level is the right way to regulate AirBnB.

In CT there are plenty of complexes that have been built to cater towards AirBnB.
 
There is no such thing as "affordable housing" in sought after areas. Even if it is artificially created, it will inevitably either be sub-let at a higher rate or it will make the area no longer sought after.

Short term letting is actually the only option for many buy to let investors when you do the sums. If you finance a 2 bedroom apartment in the city for R4m, the bond is going to be R42000 pm and the levies and rates another R10000 pm and that's before you've accounted for maintenance etc. So you have to generate closer to R60k pm to break even.

You are not easily going to find long term renters who will pay R60k pm or that would pass the vetting to do so. The only viable option then becomes short term rentals at R2-3k per night and hope for high occupancy.

If you think the problem is that it's the short term lets have driven the property values up, it's not as simple as that when you work out that you couldn't construct new apartments for the same price or less due to construction costs. Developers building new apartment blocks are not pricing 2 bed apartments at R4-6m in the city (if you're lucky) just because that's the market price they think they can get - they're setting them at level because that's the cost of the construction plus a profit margin without which it wouldn't be worth their while.

If you restrict short term lets the property market will collapse and yes, apartments will be come more affordable, but then you'll get urban decay as owners abandon their investments or no longer have funds to do any maintenance, new developements will dry up, and the end result will be deteriorating buildings and the slow creep of building hijackings and crime which becomes a feedback loop driving away businesses, making new development unviable (because the lower property values can't cover the cost of the construction) and generally setting the area on a trajectory to become the next Hillbrow.
The other issue is long term renters is a crappy market because the South African government views renting property to other people as committing a crime against humanity.

Making it easier and cheaper to have long term rentals is the way to solve the problem, and that starts by making renting to people very profitable ( I would have a regime that makes it easy to evict non-paying tenants and reduces tax liability if you rent out your property at certain price brackets).
 
It IS limited to certain areas, and it IS a matter of geography. That's how tourism works. You're basically advocating either against tourism or for forcing visitors into hotels. The latter wouldn't make any material difference since all that would happen is that blocks would become "ApartHotels" (already happening) and your pristine existence would be disturbed by additional hotels going up all around you (already happening).
Of course it makes a material difference if you're taking something zoned for residential use and start using it to run a business. I'm guessing you haven't spent much time in cities with high AirBNB adoption because you'd be patently aware that AirBNBs spiral outwards and then you end up with this type scenario in the pic below. Also, if you want to develop an ApartHotel - by all means go for it - not sure why you feel that's somehow the same thing as at least the residents have some choice in the matter.

Screenshot 2025-01-20 at 10.37.56.png
 
The other issue is long term renters is a crappy market because the South African government views renting property to other people as committing a crime against humanity.

Making it easier and cheaper to have long term rentals is the way to solve the problem, and that starts by making renting to people very profitable ( I would have a regime that makes it easy to evict non-paying tenants and reduces tax liability if you rent out your property at certain price brackets).
Nah, with respect that argument is tired and secondary. AirBNB works on a principle of competing with hotel/tourism rates not residential rental rates. No-one is Airbnb'ing for current monthly market rental paid per day...
 
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