{"id":15313,"date":"2018-06-10T08:35:36","date_gmt":"2018-06-10T00:35:36","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=15313"},"modified":"2023-08-04T17:45:43","modified_gmt":"2023-08-04T09:45:43","slug":"airbnb-in-singapore-condos","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/airbnb-in-singapore-condos\/","title":{"rendered":"Airbnb in Singapore condos: Should URA take Japan’s cue?"},"content":{"rendered":"
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The attempt to regulate Airbnb in Singapore condos has been a somewhat indecisive affair. Two month’s ago, the Urban Redevelopment Authority (URA) proposed a 90-day cap, 80%-consent rule<\/a> for Airbnb-type accommodation in private properties, which is the equivalent of allowing a teenager go to his class chalet only after he cleans the whole house, gets a scholarship\u00a0and<\/em> solves world hunger.<\/p>\n

Japan’s action against Airbnb stands in contrast to ours.<\/strong> Three months ago, Japan passed new laws<\/a> regulating Airbnb lettings in the country, which will come into effect on 15 June 2018. The move, which involves requiring hosts to register, has had its fair share of criticism.<\/p>\n

Without going to the extent of passing a law, Singapore nevertheless has been making things difficult for Airbnb hosts in its own way. The URA has also been spending significant resources to track down errant homeowners. Besides issuing official warnings, the URA has also fined two real estate agents $60,000 each<\/a> for unauthorised Airbnb lettings at four apartments.\u00a0At face value, these are measures to intimidate private homeowners while avoiding the troublesome — but ultimately logical — method of actually proposing a law tackling Airbnb and having it passed.<\/p>\n

Before we examine Japan’s take on Airbnb, here’s a more in-depth look at the URA’s proposals and approach.<\/p>\n

What is the URA’s proposed rule?<\/strong><\/h3>\n

The proposed rule has three parts. First, there is a cap of 90 days per year in which the property can be rented out for Airbnb-style use.<\/p>\n

Second, there are administrative requirements. The host must take down and submit the particulars of the guest, as well as agree to comply with rules such as fire regulations.<\/p>\n

Third \u2013 and this is the deal-breaker \u2013 strata-titled properties (i.e. condos with management committees) must get 80% consensus from owners by share value. (A sidenote: landed properties is likely to not receive any approval for Airbnb, because of narrow roads putting strain on neighbourhood traffic and the inability of residents to turn to a common body like a management committee.)<\/p>\n

\"Airbnb
Airbnb in Singapore condos: Hosts currently face the consequences of breaching land use regulations.<\/figcaption><\/figure>\n

The third part of URA’s proposed rule is basically saying no to Airbnb. Here\u2019s why:<\/strong><\/h3>\n

1. 80% consensus by share value is virtually impossible to get<\/strong><\/p>\n

80% consensus is what you need to put up a condo for en bloc, and you\u2019ve seen how hard it is to get that<\/a>. It\u2019s unlikely that such a large majority will agree especially since many buyers purchase their condos for exclusivity and privacy. Those 24-hour security guards aren\u2019t exactly hired to make the condo look inviting to outsiders.<\/p>\n

In any given development, it\u2019s also hard to get a consensus as most home owners have no intention of renting out their units. They derive no benefit from Airbnb and even foresee negative outcomes of allowing their condo to be used for short-term accommodation (e.g. noise pollution, vice activities, hogging of facilities just to name a few).<\/p>\n

2. Even if you could get the 80% consensus, it will take so much time and money that most would-be hosts would just give up<\/strong><\/p>\n

Getting the 80 per cent consensus is going to involve a lot of negotiation. The ones who don\u2019t stand to benefit will need some sort of carrot \u2013 it\u2019s likely that any would-be hosts are going to have to make huge concessions.<\/p>\n

They\u2019ll almost definitely have to sign forms accepting liability for the guests, and they may end up paying additional fees to the management committee (perhaps they\u2019ll take on a heftier maintenance bill).<\/p>\n

Then there\u2019s the sheer amount of effort in contacting all the owners, presenting their case, and talking down the dissenters. It\u2019s improbable that anyone is willing to burn a year\u2019s worth of weekends trying to push this through.<\/p>\n

It is reasonable, though, that smaller condo developments (e.g. 50 units and below) can come to a consensus quicker. Many of these small developments are older condos, in particular low-rise, walk-up apartments. But if the URA wants to define the regulation for a certain type of property, then it should do just that instead of coming up with a measure that can cause division between residents.<\/p>\n

3. The nature of the proposed rule could shut down further conversation on Airbnb<\/strong><\/p>\n

The nature of the proposed rule allows for easy handwaving. By that, we mean it\u2019s easy for the authorities to argue it\u2019s the “will of the majority” to not allow Airbnb and leave it as that. Subsequently, the authorities would adhere to a policy of non-interference. So, once implemented, the rules against Airbnb would probably never be lifted. This is very different from, say, a hands-on approach such as implementing Airbnb rental quotas and then adjusting them based on results.<\/p>\n

Japan’s action on Airbnb<\/strong><\/h3>\n

In contrast, Japan has adopted a more decisive and direct approach.<\/strong> Newly enacted laws in Japan, which take effect on 15 June 2018, has forced Airbnb to cancel existing bookings<\/a> in the country. As a result, the number of Airbnb listings in Japan dropped from 62,000 to 13,800 (an 80% decrease) in just three months. Here’s the lowdown on the regulations in Japan.<\/p>\n