The Airbnb’fication of Cape Town

AirBnb is making the idea of a liveable, walkable city unattainable, while deepening inequality and decimating local industries.

Photo by Zoë Reeve on Unsplash

If you spend any time in the urban center of Cape Town on a Saturday or Sunday morning, specifically between Long, Loop, and Bree Streets, it is not hard to see that there is a housing crisis.  Desolate, there are hardly any people living in the city center, with no sight of families or communities cultivating the space. Although the coffee shops are often empty, they are more empty than usual. Before, one could almost always find groups of tourists ambling past under the watchful guard of City Centre Improvement District officers and their tasers. At these moments, I wonder if the ideas of an urban center as a place of movement, community, or population are antiquated. These questions have only been furthered under the rise of the “Airbnb’fication” of Cape Town.

Airbnb and its short-term rental model moves into cities and leaves an indelible mark. It changes the very nature and fabric of cities in infrastructural ways, and it does this on two levels: the way local governance resources are distributed and the nature of development itself.

Inside Airbnb, a collaborative data effort that reports on the expansion of Airbnb globally reported that Cape Town has more Airbnb than Singapore, Amsterdam, and San Francisco combined. With 21,000 listed Airbnbs, the city between the mountain and the sea has now surpassed Berlin and Barcelona’s short-term rental market. Both Barcelona and Berlin are cities where the rise of Airbnb has triggered protracted regulation and policy processes in which local governments struggled to cap the changes home-sharing apps have made to the nature of their urban centers.

In South Africa, the Department of Tourism has started processes to understand and engage Airbnb as an entity to develop regulations for the industry. Minister of Tourism Patricia De Lille is on record stating that, as it stands, there is simply not enough information about the industry to put restrictions in place. While it feels important to build a policy response that speaks to the needs of a developing African city specifically, there are enough global examples that demonstrate the urgency for regulating the industry before the changes become irreversible. Airbnb’s effects prove difficult to reverse and change cities at a rate that often stumps bureaucracy.

In 2021, communities in Barcelona fought back against the emergence of Airbnb-centric cities. Residents and local businesses organized against the introduction of Airbnb stating that it was changing the profiles of cities. New previously residential areas were developing a short-term rental boom which would move out local businesses that serve community needs. Grocers were replaced with more tourist-serving outlets like takeaway shops. It also increased the cost of living. Airbnb changed the property market, making it difficult for locals to live there. Airbnb produced the conditions for a new and more rapid rate of gentrification which proved difficult for the Barcelona government to respond to.

Prior to 2021, in Berlin, a 2016 crackdown on the short-term rental industry was based on the idea that Airbnb was perpetuating a housing crisis and was directly linked to rent hikes and displacement. Local government in Berlin spent a significant amount of state resources monitoring, establishing minimal design standards for developments, and restricting and regulating the short-term rental industry as a response.

Despite the legislation, many early-adopter cities have proven that it is not the most economically stimulating venture for local governments to buy into, and in some ways it decimates the local hotel and service industries. Tourists swap out hotel stays for short-term weekend rentals and restaurant visits for takeaways. In South Africa, this problem has already emerged as smaller cities like Gqeberha have shown that Airbnb is in exact opposition to the hotel industry as reported by the Federated Hospitality Association of SA (FEDHASA) as early as 2016. As Airbnb grows, this service industry’s labor force shrinks. All the while tourism remains a key industry that the Western Cape invests much of its industry development efforts into.

To argue for them, hotels are safer for tourists and create a concentrated spread of security and transport infrastructure specifically meant to serve them. The spike in short-term rentals leads to a redirection of police resourcing, toward the middle-class suburbs which tourists and digital nomads now flock to. This shift has happened in a city where organizations like the Social Justice Coalition have highlighted the urgent need for a wider spread of police resourcing out of city centers to the far-flung Cape Flats where there is no Airbnb spike to draw resources. This redirection of development, CCID safety, and MyCity transport infrastructure perpetuates inequality and spatial divisions in the city.

Solidifying the argument that Airbnb will leave a permanent mark on the nature of housing in Cape Town are the shifts in housing development trends. The development of apartment blocks specifically for Airbnb, such as The Station in Sea Point and the Rockefeller on the Foreshore, exemplifies a trend in which city skyline-shifting apartment complexes are built and filled with unliveable studio apartments specifically geared toward the buy-to-Airbnb property entrepreneur. These are not hotels built in tourist hot spots but rather prime living spaces, used simply for the occasional tourist who wants a cheap room which are largely rumored to be empty for large parts of off-peak tourist seasons.

To demonstrate this problem, the Rockefeller is an 18-storey building on the Foreshore surrounded by an industrial shipping dock that sells “luxury-award winning apartments” for R1.6 million (about USD 82,000) —the apartments are the size of hotel rooms with no cooking facilities. The Station sells R2.5-million studio apartments that are 45 square meters in size in the heart of Sea Point not far from the Tafelberg site where housing advocacy group Ndifuna Ukwazi demonstrated the need for social housing. For context, the Station sets a real estate value of almost R50 000 per square meter (USD 2,600). These buildings are evidence of the emergence of buildings that are designed, constructed, and marketed for the short-term rental industry, and are rapidly becoming the face of the property market in Cape Town. This creates a city that fails to center people and spaces for living and instead centers on entrepreneurial profit.

Simply put, South Africa is neither prepared nor resourced to begin to respond to the impact of the “Airbnb’fication” of its city centers. The process seems to promise to deepen inequality, disrupt communities, and decimate local industries all the while perpetuating spatial apartheid. In thinking about the urgency for regulatory responses to the rise of Airbnb in Cape Town, we might want to think about the urban futures we are rushing toward. As it stands, we could already be out of time.

Further Reading

The death of cities

Cities will continue to exist and grow despite the coronavirus crisis because of the distinctly human need for social interaction, physical contact, and collaboration.

Lagos, the city of divides

Lagos, is the only city in Nigeria worthy of being described as a human potpourri. No crevice of the city is left unaffected by the flavour brought by the multifarious peoples who comprise the city’s …