Airbnb-style short-term home sharing still illegal: URA

Singapore

THE decision by the Urban Redevelopment Authority (URA) to keep the status quo for short-term stays in private homes has likely triggered a collective sigh of relief from among hospitality players, who have seen their business eaten into.

This development means that rentals of private properties for periods of less than three consecutive months - popularised by the likes of home-sharing platforms Airbnb around the world - will remain illegal in Singapore.

Under the Planning Act, those who convert the use of a property for short-term accommodation without the URA's approval may be fined up to S$200,000 and/or jailed up to 12 months.

Christine Li, head of research for Singapore and South-east Asia for Cushman & Wakefield, said mid-market hotels and economy options - a segment offering 21,000 rooms, comprising 31 per cent of the market - are likely to benefit the most, because they are at a similar price point and target the same budget-conscious customers as private home stays.

Govinda Singh, executive director of valuation and advisory at Colliers International, addressing such cost-conscious travellers, said: "If pricing is your motivator for staying in an Airbnb, then you would (in Singapore) move on to the next cheaper alternative - which is hotels in the mid-market and lower-tier segment."

He said this is especially so for single travellers. Larger groups of travellers, however, are likely to be drawn to serviced apartments, but these impose a minimum stay of seven days, he added.

Mid-tier hotelier Far East Hospitality's chief executive Arthur Kiong described the news as "certainly welcome". "Flouting of the rules already encroaches - and will certainly continue to encroach - into the hotel and serviced residences market... We would like to see stricter enforcement to give the announcement and ruling its due credibility."

JLL's senior vice-president of investment sales Adam Bury said that two factors will work together to keep the hotel supply stable in the short term: One is that there would not be potential future room supply coming from home-sharing platforms; the other is that the recent hike in development charges for hotels could slow developer appetite for such land.

The URA began consultations on short-term accommodation in 2015.

Two years later, it halved the minimum-stay requirement to three months.

Last April, it proposed new rules governing the leasing out of private homes for short-term stays. These included requiring the owners to get the consent from 80 per cent of the other residents in their condominium or development, and to register their property with the authorities.

But home-sharing platforms told the URA the proposed rules were too restrictive, and condominium management corporations were concerned about their heavier responsibilities.

However, the majority of more than 1,000 private home-owners polled in a URA-commissioned survey last year backed the proposed tighter rules against short home stays: 68 per cent said having short-term visitors in their development raised security concerns; 69 per cent supported the 80-per-cent mandate for strata-titled developments.

Just seven per cent of home-owners said they would let out their properties for short stays if these are allowed later.

The URA said in a statement on Wednesday: "Given this impasse, the URA will not proceed with the proposed regulations at this stage. Instead, it will continue to monitor the situation and broader developments on the short-term accommodation scene.

"The URA remains open to reviewing the position in the future, if and when platform operators demonstrate they are prepared to adhere to the regulatory framework."

The Sunday Times reported 8,601 Airbnb listings in Singapore as at the end of 2017.

Mich Goh, Airbnb's head of public policy for South-east Asia, said: "While today's announcement is disappointing, we remain committed to working with the government towards a pathway forward for our community of hosts in Singapore, and the hundreds of millions of guests who use Airbnb when they travel."

She noted that governments around the world have adopted "sustainable rules and regulations that reflect how people want to travel in the 21st century".

Ang Choo Pin, senior director for government and corporate affairs in Asia for home-sharing platform HomeAway, said: "HomeAway stands ready to partner with the Singapore government and create a short-term rentals framework that is sustainable and commercially feasible - one that does not penalise bona fide operators like ourselves and does not present high barriers to entry that could drive the industry underground."

In Victoria, Australia, a local tribunal can stop the renting out of short-stay apartments that have been used for unruly parties. Guests can be fined for bad behaviour.

Paris last year sought fines from Airbnb and two other companies for failing to take down listings lacking official registration numbers.

Japan limits home-sharing to 180 days a year, among other curbs imposed by local governments.