Key lessons for Cape Town's housing crisis

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Spain has taken bold steps to regulate Airbnb and address its housing crisis, providing a blueprint for cities like Cape Town facing similar challenges.

Acoording to the Daily Maverick Spanish government recently launched an investigation into Airbnb for hosting thousands of unlicensed rentals, exacerbating housing shortages and driving up real estate prices. This move underscores the global struggle to balance tourism-driven economic benefits with the housing needs of local residents.

SPAIN’S REGULATORY RESPONSE TO AIRBNB

Spain’s Consumer Rights Ministry has accused Airbnb of failing to comply with regulations requiring tourism rental listings to display valid licence numbers. The ministry ordered the removal of thousands of illegal listings, but non-compliance has led to a disciplinary process. If found in breach, Airbnb could face fines up to €100,000 or four to six times the profit made from the illegal practices.

Barcelona, in particular, has been at the forefront of this battle, with Mayor Jaume Collboni enforcing a complete ban on short-term rentals by 2028. While the ban faces legal challenges, it represents a strong stance against the negative effects of tourism rentals on housing affordability. Spain’s approach highlights the need for clear regulations and strict enforcement to protect local housing markets.

SIMILAR CHALLENGES IN CAPE TOWN

Like Spain, Cape Town is grappling with the impact of Airbnb on its housing market. A growing number of residential properties in areas like Bo-Kaap and the City Bowl are being converted into short-term rentals, reducing the availability of long-term housing. Local advocacy group Ndifuna Ukwazi reports that this trend disproportionately benefits property investors while displacing working-class residents.

In Spain, unlicensed rentals have prompted swift regulatory action. Cape Town, however, lacks a cohesive framework to manage Airbnb’s influence. Lessons from Spain could guide Cape Town in implementing zoning laws, licensing requirements, and penalties for non-compliance to curb the platform’s adverse effects.

DIGITAL NOMAD VISAS ADD TO THE PRESSURE

South Africa’s introduction of a digital nomad visa has added another layer to the housing crisis. The visa allows high-earning remote workers to reside in the country for up to three years, potentially inflating rental prices further. With Cape Town already facing a backlog of 350,000 housing applications, the arrival of wealthy digital nomads could exacerbate the affordability crisis.

Housing activist Karabelo Pooe of the National Association of Social Housing Organisations noted: “This will squeeze out ordinary citizens and push up rents in the City of Cape Town. The poor and ordinary people will be displaced to the periphery of the city.”

Proponents argue that Airbnb and digital nomad visas bring much-needed economic benefits. James Vos, Mayco member for Economic Growth, emphasised that digital nomads contribute to local businesses and tourism. However, critics point to the social costs, including gentrification and the displacement of vulnerable communities.

Ross Levin of Seeff Properties summed up the dilemma: “Will it benefit the ordinary man on the street? Absolutely not. But it is good for the economy.” Balancing economic growth with housing equity remains a significant challenge for policymakers.

FINDING SOLUTIONS: LESSONS FROM GLOBAL CASE STUDIES

Cape Town can learn from cities like Barcelona and Venice, which have implemented measures to mitigate the impact of short-term rentals. These include: