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Home-sharing platforms take a hit as Singapore government bans short-term rentals

Home-sharing platforms take a hit as Singapore government bans short-term rentals

09/02/2017,
by Marissa Trew,
in Featured,
News,
Regions,
Sectors

Singapore has moved to ban short-term home rentals in the city, directly impacting popular ‘alternative accommodation’ companies like Airbnb and HomeAway Asia.

The Urban Redevelopment Authority (URA) introduced new ‘guidelines’ into the Planning (Amendment) Bill that was passed in Parliament on February 6, 2017, two years after starting public consultations on short-term rentals.

Laws surrounding subletting homes remain largely unchanged, stipulating that homeowners do not have the right to lease their properties as accommodation for periods under six months (unless permission has been obtained by the URA).

However, the new legislation grants a rather intimidating level of authority to URA officers to ensure that rules are properly observed. URA officers will be permitted to call any potential ‘violators’ for questioning, demand any information or documents deemed relevant to the case, take on-site video evidence and even conduct forced entry into suspected homes.

Those found guilty face fines of up to S$200,000 or a maximum jail term of one year.

The mechanisms have been put in place on the basis that high turnovers of guests would give rise to “nuisance and safety concerns” amongst local neighbourhoods, according to the URA. The URA has allegedly seen a 60% rise in home-owner complaints over the past year however details are unclear as to how many are actually linked to ‘Airbnb-style’ rentals.

Airbnb expressed disappointment and frustration at the latest ruling stating, “we have repeatedly offered our support to relevant agencies to develop a framework that promotes responsible home-sharing. Nearly two years since the URA’s public consultation, it’s disappointing that the discussion has not moved forward.”

The company also went on to say that home rentals earn households an average of S$5000 per year, which undoubtedly has a significant positive impact on homeowners annual income.

HomeAway – which was originally founded in Singapore as Travelmob and has its regional office in Singapore – expressed its willingness to co-operate with the Singapore government.

Prashant Kirtane (VP of HomeAway Asia) affirmed HomeAway’s commitment to helping to create regulations that “address the Government’s concerns and are representative of Singapore’s place as the leading market in Asia for technological leadership.”

Property listings are still allowed and won’t be regulated but owners will be informed of the new rules

It puts Singapore in an interesting position as it arguably portrays a need for Singapore legislation to either be more adaptive to how new technologies will inevitably impact society, or fall behind in an era of innovation.

Nevertheless, there is argument to say that some regulation could benefit the short-term and home rental market in the long run. Hotelier and restaurateur Loh Lik Peng of Unlisted Collection, reckons it is about time the laws caught up with how the sharing economy operates.

“I think some regulation is healthy and long overdue. Major cities such as New York, Paris and Berlin are already regulating [private accommodation like] Airbnb so it’s really about time Singapore did so also… I don’t think this is a blanket ban but an attempt to make sure the areas where [home-sharing] is allowed does not impinge on Singaporeans living in these areas. That is just common sense.”

In alignment with this view, the Minister for National Development, Lawrence Wong stated, “premises which are rented out daily ought to be regulated more like hotels rather than residential homes and should be subject to relevant license and conditions to ensure proper standards.”

However, this somewhat runs contrary to the very principle of home-sharing to begin with, as travellers seek more idiosyncratic experiences when staying with a local host.

Fortunately, the new order does not mark the end of short-term rentals in Singapore. The Ministry of National Development is already exploring the possibility of creating a new ‘class’ of private apartment owners (both existing and new) that will be permitted to rent their homes on a short-term basis.

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