The sharing economy is here to stay and Singapore should legalise short-term rentals selectively, with controls to prevent abuse If home sharing were a plant, it would be a cactus - a godsend and easy to grow for some, unconventional and irksome to others, but above all, thorny.
The debate on whether to legalise short-term home rentals in Singapore has gone on for a while now, but has simmered to an unsatisfying standstill of late.
When asked for his stance in an interview with The Straits Times earlier this month, National Development Minister Lawrence Wong did not provide a clear game plan, and instead conceded that the decision is pretty much still up in the air.
On the one hand, Mr Wong pointed to strong sentiments against legalising short-term stays, many of which revolve around disamenities associated with transient strangers. Many residents would find having strangers in their home space "intolerable" and a "breach of faith", he said.
On the other hand, the sharing economy - a term that describes peer-to-peer businesses involving the sharing of resources - is here to stay. Circumstances and mindsets may change, which is why rental websites like Airbnb are not categorically banned from operating here, he added.
While it seems like a reasonable approach to monitor the situation until a suitable solution arrives, a massive elephant in the room remains.
At any given time, thousands of Singapore residents are illegally renting out their rooms and homes.
Under current regulations, rentals under six months are not allowed. And the penalties for flouting this rule are substantial. Private home owners who do so can be fined up to $200,000 and jailed for up to a year. Owners of Housing Board (HDB) flats are liable to fines and getting their units repossessed.
The Urban Redevelopment Authority (URA), which oversees private properties, says the current guidelines are meant to safeguard the environment of residential developments and to ensure that residents are not "adversely affected by the frequent turnover of transient occupiers".
Yet a quick search on rental portals like Airbnb, PandaBed, Roomorama and HomeAway indicates a glaring discrepancy between law and practice. Listed on them are thousands of local properties, such as condominium apartments, HDB flats and rooms. Many of these can be rented for as short as one night. And many of them are.
Are we ready?
To study this matter, the URA ran a public consultation early last year to see whether there is a need to review the existing policy on short-term rentals. But the exercise, which included an online survey of 2,000 members of the public and discussions with stakeholders such as home-sharing portals and hotels, yielded split views.
The Singapore Hotel Association, for one, is worried about competition from unregulated home rentals, as well as safety and hygiene standards. Residents are wary that their neighbours might open the floodgates to unknown guests who could disturb their peace, abuse common facilities and even threaten their safety.
On the flip side, short-term rentals could boost tourism here and help home owners make ends meet, the Sharing Economy Association (Singapore) has said, a view echoed by rental websites, tourists and hosts.
The lack of consensus has stalled any concrete action, and the URA has said it needs more time to dwell on the matter.
Although home-sharing websites like Airbnb began sprouting only in the past decade, Singapore has actually toyed with the idea of home-stays previously.
In the late 80s and early 90s, the Singapore Tourist Promotion Board (now Singapore Tourism Board, or STB) explored the idea of a bed and breakfast scheme in which tourists could stay in local homes as a cheaper alternative to hotels.This never materialised. Even back then, concerns over issues such as disturbances from tourists were flagged by residents.
In 2004, the Association of Management Corporations in Singapore (Amcis) started home-stay programmes in which local condominium owners hosted foreign guests, including tourists, students and medical tourists. The projects, publicised by the STB, aimed to help older Singaporeans, especially retirees, supplement their income. Although Amcis imposed stringent checks on its hosts, complaints about poor service and attitude led to some of them being dropped from the schemes. The programmes themselves, while initially popular, eventually disappeared, ending what was a promising but short-lived venture.
Could Singapore simply not be ready for such a rental model? The Government seems to think so.
Former National Development Minister Khaw Boon Wan said last year that homes, unlike resources such as Uber cars, are "harder to share". He wrote on his blog: "While it earns extra income for the home owners, their neighbours would not like to see their quiet neighbourhood becoming a hotel district."
Mr Wong said in his latest interview that Singapore's high-density, "cheek by jowl" living makes it less primed for short rentals, unlike many European and American cities. Both ministers have said that reservations over such rentals apply even more to HDB estates.
Despite these drawbacks, however, there are good reasons to legalise short rentals, especially if they come accompanied with control measures. Firstly, the sharing economy is bound to grow further, and being receptive to more of such initiatives would help the local business scene thrive in tandem. Secondly, short-term rentals have strong merits, including boosting tourism, promoting cultural exchange and providing income to home owners.
As Singapore grows increasingly land-scarce, it also makes sense to rethink our notion of space and open up more of our homes to others, even if they are strangers. In other words, to shut the door on home sharing completely would be like throwing the baby out with the bathwater. It also sends a conflicting signal that a cosmopolitan city-state like Singapore bears a fundamentally wary attitude towards tourists.
The status quo, in which the authorities check on properties only when someone lodges a complaint, is also not ideal. It is reactive rather than preventive in nature, and hence does not effectively address the concern of disamenities arising from transient occupiers. If actual trouble should arise from a vacation rental, too little would be done too late by the time it is reported.
Instead, in the same way we are enjoying the best of both worlds with ride-sharing apps Uber and Grab, we should be searching for ways to permit short-term rentals while simultaneously adopting measures that can mitigate any unpleasant outcome.
Mr Wong suggested that a development built from scratch and sold with the understanding that it will be used for short-term rentals could work. But this runs the risk of turning into just another motel or hostel.
The Airbnb dilemma is not unique to Singapore. Other countries and cities are also grappling with unwanted side effects of short rentals, ranging from inconsiderate, noisy guests to rising property prices and lack of housing for locals. But the measures that other places have implemented to stem these problems could provide us with useful ideas. One way is to stipulate durations that control the number of fleeting visitors, and by extension, minimise any potential nuisance.
In Amsterdam, for example, a property can be put up for short rentals for a maximum of 60 days per year. In Japan, a new system was created specially for minpaku - the term for Airbnb-style rentals in certain zones. Under this, guests had to stay for at least a week, although this was later shortened to two nights to ease a hotel shortage.
Another way would be to restrict short rentals to rooms, rather than entire apartments and houses. New York state does not allow most apartment dwellers to lease out their units for less than 30 days if they are not present. Perhaps Singapore might want to go a step further and make it compulsory for hosts to live in with their guests,encouraging not just cross-cultural friendships but also ensuring that the host is there to look out for mischief.
The list of measures could go on: compulsory licences for hosts that would facilitate hygiene checks and business taxing, stricter security checks on guests, and so on. Granted, enforcement will be tricky, and as Mr Wong pointed out, getting "buy-in" for short-term rentals is as important as imposing controls.
This would call for a change in mindsets, which will take time. Short rentals could be first legalised at individual condominiums where residents have voted in favour of them. Such rentals could be registered and tracked for both positive and negative feedback.
If done right, it could ease many of the anxieties surrounding home-stays, and perhaps show more Singaporeans that opening their doors to strangers could be as enjoyable as sharing a room with their loved ones.
This article was first published on October 27, 2016.
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