What next for short-term home rentals?
THE STRAITS TIMES
Ng Jun Sen
Sunday, Feb 12, 2017
to the Planning Act makes it illegal to rent out private homes on a
short-term basis. In some estates, consensus on short-term leasing is
not clear-cut. In areas like the Chestnut neighbourhood (above), there
are residents on both sides of the fence. Photo: The
There is the stick—it is illegal to rent out private homes on a short-term basis, Parliament heard on Monday.
And then there is the carrot - the authorities are also considering a
new class of private homes that allows short-term rentals and is
looking into shortening the minimum rental period from six months.
No specifics were mentioned.
In an interview with The Sunday Times, Airbnb's Asia-Pacific director
of public policy, Mr Mike Orgill, said clarity is needed with the
amendment to the Planning Act that passed last week.
"While the Government has come up with a new Bill that codifies
existing guidelines, they also say that there may be some way or form
for hosts to engage in home- sharing. But it lacks essential details
and it is this lack of clarity that needs addressing. While the
penalties have been made clear, a way forward for our host community
has not," said Mr Orgill.
There are around 8,000 Singapore listings on Airbnb, the poster child
of the sharing economy and one of 2016's biggest disruptors.
Airbnb itself is not opposed to regulation, said Mr Orgill, and has
come up with tools to assist policymakers in crafting laws regarding
When The Sunday Times asked if the growth of the sharing economy may be
dented now that the law has been clearly spelt out, experts were split
in their answers.
Singapore University of Technology and Design's (SUTD) Professor Costas
Courcoubetis, said the move could have a chilling effect on the sharing
"The Government should avoid over-regulating as it continues to
encourage innovation in the sharing economy," added Prof Courcoubetis,
who leads SUTD's Initiative for Sharing Economy Research.
He called for a self-regulated system with both the Government and
businesses in the sharing economy making available data about public
complaints, for instance.
The home-sharing model has faced challenges in cities such as New York,
London and Paris, with strict regulations and heavy enforcement against
New York, for instance, has been tangling with Airbnb over its business
model, and imposed steep fines on anyone who lists their property on
President of the Sharing Economy Association Singapore, Mr Jim Tan,
said the sharing economy is important as enabling apps can provide
smart ways to match demand with supply in cities where resources are
Nanyang Business School's Associate Professor Boh Wai Fong said the law
is inevitable, given the Government's previous stand that short-term
leasing under six months would contravene the Urban Redevelopment
Clear regulation also kicked in last week in the case of transport apps
like Uber and Grab - private car-hire drivers now need to be licensed.
Prof Boh said while the transport economy is also regulated,
car-sharing is generally in line with the Government's objective for a
But not so with home-sharing apps.
"It is just that housing and property is a highly regulated and sensitive sector for Singapore and for the policymakers.
Hence, the recent policy relating to leasing to tourists does not, in
my view, reflect the official government stance towards innovation in
the sharing economy," she added.
Entrepreneurs should seek to anticipate the likely responses of the
stakeholders, said National University of Singapore Business School's
Associate Professor Sarah Cheah.
"While most governments support innovation and entrepreneurship with
the view to promote job creation and economic development, they still
have to maintain social order and stability as a society undergoes
transitions with technological disruptions and socio-cultural change,"
said Prof Cheah.
In response to The Sunday Times' queries, a Ministry of National
Development spokesman said: "There is certainly a place for short-term
rental platforms in Singapore. What we intend to do is carefully review
and consider new policies to better respond to them.
"Such an approach best ensures that any problems caused by such
'disruptors' are effectively addressed, even as we attain the social
and economic benefits from fostering innovation in the sharing economy."
Relief for some building managers
A new law passed last week, which clarifies that short-term home
rentals are illegal, has brought relief to some building managers who
have been finding their own ways to combat the problem.
At The Sail in Marina Boulevard, it took drastic measures from the
building's management corporation strata title (MCST) to tackle the
Given its downtown location, the 1,111-unit private condo had been
plagued by "professional operators" running a hotel-like business for
the past four years.
In August last year, council members voted to pass a by-law to clamp
down on short-term home rentals, amid growing concern among residents
over the security and reputation of the condominium.
The condominium's response involved bouncers who operated around the clock in two shifts.
MCST chairman Augustine Cheah said: "They could demand to see the
tenancy agreement of anyone they suspected to be involved in short-term
"If they could not prove they were legal residents, they would be given
the boot. Most of the time, they are renting from the original owner,
who does not know about the subletting.
"At its peak, I would say that 10 per cent of units in The Sail were involved in short-term letting."
While harsh, the measure worked, as the MCST no longer receives reports about strangers entering the premises, he said.
But in some estates, consensus on short-term leasing is not as
clear-cut. At the condominiums and landed homes of the Chestnut and
Cashew estates in Bukit Panjang, there are residents on both sides of
The chairman of the Chestnut neighbourhood committee, who declined to
be named, said: "Those with extra space in their homes would like the
ability to lease out and share their homes with vacationers, as they
benefit from these economic activities.
"But there are those who expect their homes to be liveable and do not accept short-term renting.
"This is especially true in the denser condominiums, where there are more chances of friction."
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