More time needed to study short-term stay: URA

RESULTS of a public consultation on short-term stays in private residential properties were split, with no clear consensus, said the Urban Redevelopment Authority (URA), adding that more time is needed to study this issue.

An important piece of feedback, however, was that any change in rules should ensure a level playing field.

"Currently, regulated accommodation providers such as hotels and serviced apartment operators are subject to various regulatory requirements to ensure the safety and well-being of occupants. They are also subject to business taxes," URA said.

Comments from URA came in response to queries from the media on the public consultation exercise that started in January 2015 and was concluded in April the same year. But the findings have yet to be released.

On the hotly debated topic of the home-sharing economy, URA had sought feedback from members of the public, and also held separate consultations with stakeholders groups such as management corporations, members of the hotel and serviced apartment industry, and representatives of home-sharing platforms.

Current URA guidelines require that private residential properties be rented out for no less than six months. Private home offenders can be fined up to S$200,000 and jailed for up to a year.

"On one hand, there was acknowledgement of the need to accommodate the demand for short term home-sharing. On the other hand, there was strong endorsement of URA's existing controls on subletting, which are intended to preserve the privacy and sanctity valued by the vast majority of homeowners," URA said of the feedback gathered.

"The issue on short-term stays is complex, multi-faceted, has wide-ranging implications and it warrants a careful and balanced review."

But while the review is ongoing, URA stressed that the existing six months minimum stay duration in private residential premises "must be observed" and it is still continuing enforcement action against misuse.

Articles in The Business Times last month have flagged that even before local listings of residential units for short-term stay became rampant on Airbnb and HomeAway, various accommodation-service providers had long been in business in Singapore, with their property listings of condominium units spanning the island. And many of them allow rentals of less than six months.

Accommodation-service providers typically rent flats from landlords, furnish the units and sublet them, offering limited services that include twice weekly housekeeping.

But these "apartments with services" - which vary in their range of services provided - are not governed by URA's guidelines in the way traditional serviced apartments are. A planning permission from the URA is required to run a residential premise as serviced apartments for lease of seven days or longer.

Evidently, these accommodation-service providers are not part of the 13 registered members under the Serviced Apartments Association of Singapore (SAA). The 13 SAA members have about 28 registered properties with 3,646 apartments as at end-2015, according to SAA president Tonya Khong.

But Franck Boullier, co-founder of LMB Housing Services, felt that there is a missing element in URA's glossary - which he coins as "medium-term housing" for those staying for a few months. Such housing caters not to tourists but to corporate clients who are here for work, which is why Mr Boullier does not see the Sequoia-backed Airbnb as a competitor.

More companies are sending teams on project basis to support the local resources rather than deploying expatriates, he observed. But the traditional serviced apartments are more expensive than corporate housing solutions offered by companies like his. "Because they are working on projects, our customers need to have the flexibility to adjust the end date of their lease," Mr Boullier said of LMB's open-ended contract policy whereby the last date of stay is not indicated in rental contracts.

As a safeguard, LMB's occupants are registered with the condominiums' management office, have resident cards and are contractually required to abide by the by-laws of the condo they are staying in. Mr Boullier felt that future rules and regulations should indeed, ensure the safety and well-being of all occupants and all operators should be subject to business taxes too.

Frasers Hospitality CEO Choe Peng Sum noted that a lot of corporate clients who come into Singapore for one to five months require a host of services as well as fire safety, security and emergency precautions that are found in traditional serviced apartments. "When we deal with multinational companies, especially American and European companies, they are very particular about safety and security."

Those managing agents offering residential apartments with limited services will have to contend with the vast number of rental homes in Singapore and possibly compete on pricing, he said.

Mr Choe opined that these accommodation-service providers and Airbnb should be regulated too, in the same way serviced apartment operators are regulated under URA guidelines.

This article was first published on May 19, 2016.
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