Marc Bernitz•5 days ago I request that the City substantially rewrite the Draft Short-Term Letting By-law to introduce enforceable limits on dedicated commercial short-term letting, with the express objective of returning residential dwellings to long-term availability and improving housing affordability.I support registration, effective enforcement and the correct commercial rating of accommodation businesses. However, my requested outcome is not simply better rates compliance or additional municipal revenue. It is a measurable increase in housing available to people who live and work in Cape Town, particularly through the long-term rental market.I am not requesting a blanket prohibition on short-term letting. I request a framework that protects genuine home-sharing while limiting dedicated commercial whole-home STL, particularly in areas experiencing significant housing pressure. Those limits must address existing commercial operations as well as future conversions.1. Housing supply must become an explicit, operative objectiveThe draft’s preamble recognises the City’s duty to “protect the rights of residents”. However, section 2 identifies rates classification, monitoring and enforcement, and administrative responsibilities as its objectives. It does not expressly identify preserving long-term residential housing supply or improving affordability. The draft establishes registration and rates-classification mechanisms, but not a numerical ceiling on commercial STL properties or an annual letting-night limit.[1] The City’s FAQ acknowledges that commercial STL properties are “not available for residential occupation”. It nevertheless states that the City “does not support the restriction of short-term letting activity”.[2] I request that this policy position be changed. The rewritten By-law should expressly seek to preserve and increase long-term residential housing availability by limiting the use of residential dwellings as dedicated commercial visitor accommodation.That objective must be implemented through substantive provisions governing eligibility, authorisations, limits, transitional arrangements and enforcement. Adding housing affordability to the preamble, without changing the operative provisions, would not fulfil this request.2. The rewritten framework should contain the following measuresDistinguish genuine home-sharing from dedicated commercial STL. Residents should remain able to let a room within their occupied primary residence or occasionally let that residence while away, subject to clear conditions. A dwelling operated principally as visitor accommodation should fall under a separate commercial authorisation regime. Classification should depend on actual use, not merely whether an owner holds one property or several. A separate, self-contained dwelling should not automatically qualify as home-sharing simply because its owner lives elsewhere on the same erf.Introduce enforceable limits on dedicated commercial STL. The framework should establish limits on commercial authorisations, with stricter limits in identified housing-pressure areas. Their design should consider local STL concentration, long-term rental availability, affordability, tourism demand and accommodation capacity. I am not proposing an arbitrary citywide percentage; I am requesting that the City establish and justify limits capable of producing the intended housing outcome.Address existing operations, not only new entrants. Where commercial STL exceeds the adopted limit, the framework should provide for a managed reduction over a defined transition period. A restriction on new registrations alone would not require any existing operation to cease and would therefore not, by itself, deliver the requested return of existing STL dwellings to residential availability.Use time-limited authorisations and fair transitional arrangements. The framework should include clear eligibility and renewal criteria and a lawful mechanism for reducing authorisations where necessary to meet the applicable limit. Existing operators should receive reasonable notice, fair procedures and appropriate consideration of established legal rights. I do not request arbitrary cancellation, but nor do I request an indefinite exemption for all existing operators.Make registration and enforcement support the limits. Registration should identify a property; it should not substitute for the separate authorisation required to operate dedicated commercial STL. Payment of commercial rates should likewise not substitute for permission to undertake that use. Enforcement should address invalid or expired authorisations, duplicate listings, false primary-residence declarations and bookings moved between platforms or taken directly.Coordinate the necessary legal instruments. The City should identify the legal basis for each restriction and advance any accompanying amendments to municipal planning or other instruments needed to implement it. Where a proposed measure requires authority beyond the City’s existing powers, the City should identify that limitation and the legislative steps required. Substantial revisions should be made available for further public comment.3. The economic and empirical basis for addressing housing supplyThe relevant economic issue is the reallocation of dwellings between competing uses. Where a property that would otherwise accommodate long-term residents is instead operated as dedicated visitor accommodation, the effective supply available to residents decreases. Holding other conditions constant, that mechanism can place upward pressure on rents. It is examined in both the Barcelona and United States research discussed below.[4][5] This does not establish that every STL listing represents a home removed from the residential market, that every restriction returns a home to rental use, or that STL is the sole cause of housing unaffordability. The relevant assessment is the net change in residential availability compared with what would otherwise have occurred.The empirical evidence includes the following:Barcelona: Garcia-López et al. (2020), using several econometric approaches, estimate that Airbnb increased rents by approximately 1.9% in the average neighbourhood and approximately 7% in neighbourhoods in the highest decile of Airbnb activity. These are estimated effects in the historical Barcelona setting studied, not annual inflation rates or forecasts for Cape Town.[4] United States: Barron, Kung and Proserpio (2021), using an instrumental-variable approach, find higher rents and house prices associated with Airbnb expansion. Their results support a reallocation mechanism: increased short-term rental supply and reduced long-term rental supply, without a detected increase in total housing supply in their analysis.[5] Los Angeles County: Koster, van Ommeren and Volkhausen (2021) study municipal home-sharing ordinances using a quasi-experimental design. They estimate approximately 50% fewer STL listings and 2% lower house prices; a separate difference-in-differences analysis estimates approximately 2% lower rents. These are effects estimated for the ordinances and municipalities studied.[6] Berlin: Duso et al. (2024) find different long-term rental-market effects from interventions affecting commercial and predominantly non-commercial listings. They estimate that each additional commercial Airbnb listing displaced approximately 0.23–0.37 long-term rental units in their setting.[7] Evidence of limited effectiveness must also inform the design. Gauß et al. (2024), studying day-cap regulations in German cities, find reduced Airbnb activity but relatively few properties redirected into long-term rental use, no statistically significant decline in long-term rents, and substantial non-compliance. Their analysis also estimates losses to hosts and guests, with minimal welfare gains for residents.[8] These studies do not prove that a particular Cape Town restriction will achieve a particular numerical result. They demonstrate both the potential housing effects of commercial STL and the importance of regulatory design, local circumstances and enforcement.My requested response is therefore not an indiscriminate restriction or an unsupported promise of lower rents. It is a targeted framework designed to return dwellings to residential availability, with its effectiveness tested against actual housing outcomes.In particular, a reduction in booking nights is not equivalent to an increase in long-term housing. Annual night limits should not be the sole instrument for dedicated commercial dwellings unless the City can demonstrate why they are expected to change property use.4. Commercial rating is not a substitute for housing-supply controlsThe proposed rates framework uses property use, primary-residence status and, where applicable, a 50% room-night availability threshold. The threshold is not an annual letting prohibition. Section 8(2) also makes residential classification at or below 50% conditional on satisfying the Rates Policy’s requirements.[1][2][3] Whether a higher rates bill changes an owner’s choice between STL and long-term letting depends on the relative net returns. As an economic possibility, an operator may absorb the additional cost while continuing to earn a higher return from STL. Others may change use, while any effect on accommodation prices will depend on market conditions. None of these responses should be assumed without analysis.I request the City’s modelling of these incentives, including how many properties it expects the commercial-rates treatment to return to long-term residential use and over what period.However, that information should inform the design of the requested restrictions, not replace them. My request is for controls expressly intended to restore residential availability, rather than reliance on an unquantified incidental effect of rates classification.5. Quantify the net tourism and employment consequencesThe City’s FAQ cites tourism employment, informal-market risks and potential harm to genuine home-sharers when explaining its position on restrictions.[2] I recognise these as relevant considerations. They should inform the scope, exemptions, transition period and enforcement of the restrictions.The appropriate economic question is the additional effect of a particular restriction—not the total number of jobs supported by tourism.Research by Zervas, Proserpio and Byers (2017), examining Airbnb’s entry into Texas, finds effects on hotel revenue and room pricing, demonstrating competition between accommodation types. The study also identifies the role of flexible STL supply during peak demand. It does not establish how much displaced STL demand Cape Town’s other accommodation providers could absorb.[9] How many net tourism jobs does the City estimate would be lost under targeted limits on dedicated commercial STL, after accounting for visitor demand and employment shifting to hotels, guesthouses and other accommodation providers?I request the associated estimates of visitor nights genuinely lost to Cape Town, tourism expenditure, accommodation prices and available capacity. The analysis should distinguish peak-season constraints from annual averages, identify its time horizon, and separate direct employment from indirect effects and job headcounts from full-time-equivalent employment.It should neither assume that every displaced STL booking disappears from Cape Town’s economy nor assume that every visitor can be accommodated elsewhere without additional cost.The findings should be weighed alongside the expected housing benefits and the distribution of costs and benefits among residents, tenants, owners, accommodation businesses, workers and visitors.6. Release the analyses underlying the policy choiceI request publication of the following analyses, to the extent that they exist:
Housing impacts: estimates of unique dwellings used predominantly for commercial STL, their geographic concentration, their net effect on long-term housing supply and rental affordability, and the number of dwellings expected to return under different restrictions.
Tourism and employment: modelling of visitor nights, expenditure, prices and net employment under targeted restrictions, including substitution between accommodation types and peak-season capacity.
Financial incentives and municipal revenue: analysis of whether commercial rating changes property-use decisions, together with expected gross and net municipal revenue after implementation and enforcement costs.
Regulatory alternatives and enforceability: the options considered, their legal basis, anticipated compliance, informal-market risks, implementation costs and reasons for accepting or rejecting each option.
Overall and distributional effects: any assessment comparing the proposed registration and rates-classification framework with targeted housing-supply restrictions, including how the interests of residents and other affected groups were weighed.
Please provide the methodologies, principal assumptions, data sources, sensitivity tests and limitations. Where underlying records cannot lawfully be disclosed, aggregated or anonymised information should be provided where possible, with the reason for any remaining limitation explained.Where an analysis has not been undertaken, please confirm this and identify the evidence relied upon instead. I do not assume that an unpublished analysis does not exist.These requests are intended to inform the design and scale of the restrictions sought in this submission. They are not an alternative to the requested policy change. Material supporting the revised approach should be released sufficiently before adoption to permit informed consideration by the public and Council.7. Measure homes returned to residential useThe rewritten framework should establish a baseline, an implementation timetable and measurable housing-outcome targets.The principal measure should be the net increase in dwellings available for long-term residential occupation, with additional long-term rental homes reported separately from owner-occupied properties. Removed listings, cancelled registrations and reduced visitor nights should not automatically be counted as homes returned.I recognise that an owner who stops STL may choose long-term letting, owner-occupation, sale or vacancy. I am not requesting that the City compel every affected owner to grant a residential lease. I am requesting limits designed to produce a measurable net increase in long-term residential availability, followed by review of whether that outcome is occurring.The assessment should distinguish genuine changes of use from duplicate listings, platform switching, continued unregistered operation and changes that would have occurred without the policy. It should also consider effects on future housing development.Monitoring should lead to adjustment of ineffective provisions, rather than merely reporting registration totals and revenue.ConclusionI request a substantially rewritten By-law that limits dedicated commercial STL and provides a lawful, managed transition through which some existing commercial STL dwellings return to long-term residential availability, particularly the rental market.This requires enforceable eligibility rules, limits on commercial authorisations, provisions addressing existing operations, and effective enforcement. It also requires protection for genuine home-sharing, fair procedures for affected owners and evidence-based decisions about the limits and transition periods.My requested outcome is not simply a better register, higher rates or additional research. It is a regulatory framework whose substantive provisions are designed to preserve housing for residents and return dwellings from dedicated visitor accommodation to long-term residential use.References[1] City of Cape Town (2026). Draft Short-Term Letting By-law, 2026. Preamble and sections 2, 4, 7 and 8. [2] City of Cape Town (2026). Short-term Letting in the City of Cape Town: Frequently Asked Questions. Updated August 2026. Particularly questions 2, 6, 8, 22 and 23. [3] City of Cape Town (2026). Rates Policy 2026/2027. Annexure 5, Budget June 2026; approved by Special Council on 29 June 2026. Definition of “Commercial Accommodation” and section 4.5. [4] Garcia-López, M.-À., Jofre-Monseny, J., Martínez-Mazza, R. and Segú, M. (2020). “Do short-term rental platforms affect housing markets? Evidence from Airbnb in Barcelona.” Journal of Urban Economics, 119, Article 103278. DOI: 10.1016/j.jue.2020.103278. [5] Barron, K., Kung, E. and Proserpio, D. (2021). “The Effect of Home-Sharing on House Prices and Rents: Evidence from Airbnb.” Marketing Science, 40(1), 23–47. DOI: 10.1287/mksc.2020.1227. Published online in 2020; journal issue dated 2021. [6] Koster, H. R. A., van Ommeren, J. and Volkhausen, N. (2021). “Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles.” Journal of Urban Economics, 124, Article 103356. DOI: 10.1016/j.jue.2021.103356. [7] Duso, T., Michelsen, C., Schaefer, M. and Tran, K. D. (2024). “Airbnb and rental markets: Evidence from Berlin.” Regional Science and Urban Economics, 106, Article 104007. DOI: 10.1016/j.regsciurbeco.2024.104007. [8] Gauß, P., Gensler, S., Kortenhaus, M., Riedel, N. and Schneider, A. (2024). “Regulating the sharing economy: The effects of day caps on short- and long-term rental markets and stakeholder outcomes.” Journal of the Academy of Marketing Science, 52, 1627–1650. DOI: 10.1007/s11747-024-01028-7. [9] Zervas, G., Proserpio, D. and Byers, J. W. (2017). “The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry.” Journal of Marketing Research, 54(5), 687–705. DOI: 10.1509/jmr.15.0204.
