Cape Town’s Housing Crisis: Digital Nomads and Rising Costs
Earlier this month, graffiti appeared on the promenade in Sea Point, Cape Town, reading: “Digital nomads go home!”1 This sentiment reflects growing frustration over soaring housing costs, with some residents blaming an influx of foreign property buyers and the proliferation of Airbnb listings.
Property Price Increases
Over the last five years, property prices in Cape Town have risen by 31%, double the increase seen in South Africa’s other metropolitan municipalities.2 Rents increased by 5-7% last year, also exceeding the national average, according to property research firm The Africanvestor.3
Historical Context: Apartheid’s Legacy
Cape Town’s housing crisis predates the recent influx of digital nomads and retirees. The geographic inequalities established during apartheid persist more than 30 years after the end of white minority rule. Townships, created to forcibly relocate non-white populations in the 1960s, remain largely non-white and impoverished, and informal settlements have expanded.
Influx of Residents
Cape Town is considered South Africa’s best-run city and has the lowest unemployment rates in the country, attracting people from all income levels, including “semigrants” from other parts of South Africa, foreign and local retirees, and digital nomads. However, experts point to insufficient housing and infrastructure development as long-standing issues.
Population Growth and Housing Shortages
The city’s population grew by 65% between 2001 and 2022, reaching 4.8 million.4 As of September 2024, over 400,000 people were on the waiting list for social housing.5 18.8% of residents live in informal housing.6
City Government Response
City officials state that more land has been released for affordable housing since November 2021, with 12,000 affordable units planned. The city aims to address the spatial inequalities inherited from apartheid by bringing jobs and housing closer together.
Personal Stories and Social Media Reactions
A viral video featuring Alexandra Hayes, a 31-year-old freelance worker, highlighted the challenges faced by residents when landlords choose to list properties on Airbnb.7 The video sparked a debate, with some empathizing with Hayes and others, particularly non-white South Africans, expressing a sense of validation for long-held concerns.
Racial Dynamics in the Rental Market
Some residents report experiencing racial bias when seeking rentals, with non-white individuals facing longer wait times for responses from landlords and estate agents compared to their white counterparts.
Airbnb’s Role in Cape Town
There are over 26,000 Airbnb listings in Cape Town, with 82.6% being entire homes.8 This is a higher number than cities like Copenhagen, Lisbon, and Los Angeles. Airbnb acknowledges Cape Town’s housing challenges and states that short-term rentals account for less than 0.9% of formal housing, a proportion that has decreased since 2020. The company maintains that a lack of novel housing construction is the primary driver of affordability issues.
The city is introducing a bylaw to ensure short-term landlords pay commercial tax rates.