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[Updated] To Bnb Or Not To Bnb? - Singaporeans Divided In Opinion On Short-Term Rentals

[Update, 7 Feb 2017] Parliament passed a law on Monday, 6 Feb 2017 that will make it illegal for private apartment owners to rent out their apartments or rooms on a short-term basis (i.e. for less than 6 months) on arrangements such as Airbnb. They will only be allowed to do so only if they have permission from the Urban Redevelopment Authority (URA). 

Changes came because of the growing number of complaints about these arrangements – the URA received 608 complaints in 2016, which signals a 60% increase from 377 in 2015.

The URA however, is said to be studying the option of “creating a new category of private homes that will be allowed for short-term rentals”.

The passing of the new law will also see the limiting of the number of unrelated tenants in private apartments to six, down from the currently allowed eight.

Read more about the changes here.

Singapore’s Urban Redevelopment Authority (URA) announced yesterday that it needs more time to review its stance on short-term rental arrangements, reported by The Straits Times.

The Current Guidelines And Laws

At this point of time, while short-term (that is, below 6 months) rentals are not illegal per se for those living in private condominiums and landed property, guidelines on URA’s website states: “Private residential properties or the rooms within their premises should not be rented out on a short-term basis for less than six months on a daily/weekly/monthly basis”.

However, rentals conducted at HDB units must fulfil the 6 months or longer condition – any arrangements under that term is considered illegal.

Homeowners who are caught flouting these rules are subject to a maximum fine of $200,000 and a jail term of up to 12 months. A report in 2014 stating that the flats of two HDB homeowners were confiscated from them served as a public warning to those toying with the prospect of renting their houses out that the government is not playing around with their enforcement.

Investigations on houses (both HDB and private) are usually only conducted when there are complaints by neighbours on disturbances. It is reported that in January to April this year, there were 161 such complaints. This is in comparison to the 231, 375 and 377 complaints in 2013, 2014 and 2015 respectively.

With the rising trend in complaints, one can only assume – are more homeowners engaging in this arrangement, or are their neighbours getting more irritated at these ‘unwanted guests’?

The Search For A General Consensus

In a bid to get “a fuller picture”, a public consultation was conducted over 4 months (January to April 2015) in two forms –  one being an 2 month long online public survey with around 2,000 respondents, and the other being a discussion held with around 100 stakeholders from home-sharing portals, hotel and serviced apartment reps, neighbourhood committees of private housing estates and condominium management corporations.

airbnb5

Then Minister of Home Development Khaw Boon Wan, however, made his stance clear in a blog post, stating that “some things are harder to share than others (…) while it earns extra income for the home owners, their neighbours would not like to see their quiet neighbourhood becoming a hotel district”.

In an article posted in October 2015, a dip in both arrivals of tourists and standard average occupancy rate at hotels in Singapore by 0.6% in the first 8 months of the year was reported and URA looked into alternative tourist accommodations by working with Airbnb, one of the biggest of such websites, having served over 60 million guests to date.

Despite these wide-scale measures, it does seem like the final verdict is currently still in limbo, with spokespeople from Airbnb and Pandabed stating their hopes that there will be a revision in rules to allow “regular people to share their homes”.

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Check out the latest industry with the highest retrenchment rates in Singapore here.

The Current Players In The Singapore Market

In spite of the strict regulations and guests needing literally to walk on eggshells to not disturb the neighbours, listings of rooms for rent on popular websites like Airbnb, PandaBedRoomorama and Homeaway are still available.

Looking through the four sites, I observe that most of them are of landed properties or condominiums located near the Central part of Singapore. Many of them also offer whole apartments.

Image Credit: PandaBed, Airbnb, Homeaway
Image Credit: PandaBed, Airbnb, Homeaway

What can be deduced from this?

First of all, the strictly enforced rules for HDBs are (as we know) abided to, while homeowners of private condominiums and landed properties are willing to share their houses with strangers. The presence of listings renting out the entire apartments, though, seem to point to a trend –  homeowners with multiple properties are using this arrangement as a source of income.

With them not living in the same vicinity, culture shock or clashes with their guests can also be avoided. As for complaints from neighbours, the risks can be mitigated if homeowners choose their guests carefully.

Image Credit: Airbnb
Image Credit: Airbnb

For example, Airbnb bases its operations on trust between its users, and has a 24-hour support line operating 7 days a week lest anything happens. Both hosts and guests on Airbnb are also required to have verified IDs and personal details.

Both ends are also liable for reviews from the opposite party, and these can be reviewed from the Airbnb profile page all users possess.

Image Credit: Airbnb
Image Credit: Airbnb

Mine as of now is empty, because I have yet to engage in an Airbnb experience, but below is an example of how host reviews look like:

Image Credit: OurBigFatTravelAdventure.com
Image Credit: OurBigFatTravelAdventure.com

In an ideal situation, this system works perfectly if hosts and guests are discerning and responsible. Reality, however, is an entirely different story all together.

Reports of a stolen bicycle, drug-fuelled parties, and apartments being ransacked by guests have been posted online, and it is difficult to not be wrought with paranoia if you’re the neighbour of a host. As reported last year on Vulcan Post, forum letters from Singaporeans were also cited to state the lack of thorough identity verification and potentially dangerous guests as reasons against short-term rentals.

What Next?

If data collected from 2015’s public consultation is still relevant, we can be certain that Singaporeans are still undecided on their stance on short-term rental.

Till then, all we can do is wait for URA to release the verdict.

Featured Image Credit: Quincy Teofisto on Youtube

 

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