South Africans feeling the Airbnb squeeze

Cape Town residents are growing increasingly impatient with the lack of government regulations on Airbnb, as they feel they can no longer afford to live in the city, the Sunday Times reports.

The city has one of the most Airbnb listings in the world, a wonder for tourism. However, this also threatens locals struggling to cope with the lack of affordable accommodation.

According to a Tourism White Paper, appropriate regulation of short-term rentals, including strict regulation of the duration of stays, is required — something Airbnb supports.

“We actually believe regulation, if it’s simple, if it’s appropriate, and if it’s proportionate, can be a really good thing,” Airbnb Middle East and Africa regional lead Velma Corcoran told MyBroadband in a November interview.

At the time, she said there was no evidence to suggest that South Africa was struggling with issues other countries have introduced regulations for, like a housing crisis or overtourism.

“Thresholds is a measure that you bring in if you want to limit short-term rental activity for very specific reasons,” said Corcoran.

“To create regulation, you actually really need to know what you’re solving for — and that has to be done based on evidence.”

However, according to the Sunday Times, short-term rentals can cost between R3,000 and R4,000 per day in peak season and R200,000 for two months.

This, along with investors targeting properties for the short-term rental market, has driven up property and rental costs in the city.

As a result, South Africans are left frustrated and unable to compete with the demand for Airbnb in Cape Town when looking to rent or buy.

Efforts to increase the supply of affordable housing are being threatened as even those seen as well-off in Cape Town are being “priced out” because of the lack of affordable housing, according to urban policy researcher Nick Budlender.

Tourism minister Patricia De Lille has said that once all the feedback received on the white paper has been appropriately collated and incorporated, she will present it to the rest of President Cyril Ramaphosa’s cabinet.

Airbnb signed a memorandum of understanding with the Department of Tourism to collaborate on a national registration system for short-term rentals.

This aims to provide transparency into the short-term rental market and obtain the data needed to develop appropriate regulations.

Regarding specific policy and regulatory proposals, Corcoran said Airbnb believes now is the right time to introduce new rules for short-term rentals in South Africa.

“[Rules] that can enable ordinary South Africans, families, to continue hosting in their homes and use this as a way to make some extra money,” Corcoran stated.

“But then put in place more stringent measures potentially for those who are considered bad actors or who are more professional.”

Corcoran also asked whether existing regulations governing tourism should be simplified.

“Platforms like Airbnb take away some of the need for lots of regulation,” she said.

“Regulation helps ensure the place is safe; the place is clean; the place is of high quality. Airbnb has got a review system that really looks at quality, trust, safety on the platform. Do you really need in-person checks if the platform already allows for that?”

Following a call for urgent regulation in 2017 by the Federated Hospitality Association of South Africa (FEDHASA), the Department of Tourism revealed its intention to regulate Airbnb and other home-sharing apps in April 2019 through the Tourism Amendment Bill.

It published a green paper on the development and promotion of tourism in South Africa in October 2023, undertaking a policy review process that will inform the regulations in the Bill.

Among the proposals under consideration is to give the Minister of Tourism the power to determine certain thresholds for Airbnb locations in South Africa, including limits on how many nights a customer can book at one location.

Commenting on the green paper in October 2023, FEDHASA warned that the regulations must focus on job creation, pointing out that onerous requirements could hamstring smaller accommodation operators in poorer communities, including those that benefit from being on Airbnb.

“As these platforms are now a substantial part of the tourism sector, we support a balanced approach that protects consumers while encouraging entrepreneurship,” FEDHASA said.

“However, we request a discussion on reasonable regulation aligned with international best practices.”