Shortening minimum stay of private home rentals?

Amendments to the Planning Act will make two practices illegal – that of using private residential properties for rentals of under six months, and housing more than six tenants in each unit.

However, the government is looking into shortening the minimum six-month requirement for private housing rentals, and creating a new class of use for private homes so that they can be rented out short-term.

The amendment Bill, read the second time in Parliament on Monday, inserts a new Schedule into the Planning Act that lists “short-term accommodation” and “dormitory accommodation” without permission as illegal.

“Dormitory accommodation”, which requires planning permission, is defined as accommodation for seven or more persons. The cap, which previously limited tenants to eight in each unit, does not apply to families.

Lawrence Wong, Minister for National Development and Second Minister for Finance, said the amendment on short-term accommodation does not amount to a change in policy, because an existing guideline under the Urban Redevelopment Authority (URA) already bars short-term stays of under six months in private homes.

By setting out this minimum requirement in the Schedule of the Act, the government can adjust this parameter by gazette down the road.

“Indeed, in its earlier consultation, URA had received feedback from a number of respondents that there was scope to reduce the minimum period,” Mr Wong said.

“But whatever adjustments we may make to this minimum period, it is clear that residential homes should not be converted to daily rental of rooms or apartments without appropriate controls.

“Such premises which are rented out daily ought to be regulated more like hotels rather than residential homes, and be subject to relevant licences and conditions to ensure proper standards. In fact, several cities are regulating short-term home-sharing platforms in a similar way to hotels.”

Several Members of Parliament supported the amendments, but hadreservations over the approach of URA, which is perceived to act only when a complaint is received; the MPs also wanted to know whether the URA has enough manpower and resources to follow up on complaints.

Member of Parliament Lee Bee Wah suggested that instead of adopting a “one-eye-open and one-eye-closed policy”, the government can consider alternatives, such as allowing some units to offer short-term leasing with the consent of other residents.

Mr Wong noted that the number of complaints by homeowners over breaches of the rule, triggering public-nuisance or safety concerns, has gone up 60 per cent in the past year.

“We have to enforce the current rules and make sure the issue does not worsen, and the Act will allow us to do so,” he said.

The reading of the amendment Bill followed a public consultation on short-term rentals in 2015. Mr Wong noted that there was strong endorsement of the need to preserve the privacy and sanctity valued by the vast majority of homeowners.

However, the government does see room for home-sharing platforms to continue operating in Singapore, so long as they are properly regulated and there is a level playing field between them, hotels and serviced apartments, Mr Wong said.

Advertising on home-sharing or rental websites in itself is not regulated under the Planning Act.

Commenting on the amendment Bill, a spokesman from prominent online listings platform Airbnb said the draft law “lacks the vital details that are so important to the thousands of everyday Singaporeans who take pride in sharing their extra space”.

“Nor is it compatible with Singapore’s vision to stay ahead in an age of disruption and innovation,” he said. “We support a common-sense approach to regulation that helps these hosts share their extra space.”

To that end, the URA is studying the option of creating a new “use class” for private residences, the owners of which want to rent them out short-term. The URA is thus looking into approving these properties for that specific purpose, just as serviced apartments or hotels are.

New residential sites can also be sold with such an approved use, to open the way for flexibility for short-term rentals.

Existing residential buildings, however, will need planning permission for change of use, and would be subject to a set of guidelines that URA is looking into, Mr Wong said.

These proposed measures are all separate from the amendments tabled on Monday. URA is studying them, before providing more details.

Frasers Hospitality chief executive Choe Peng Sum agreed that there should be some leeway for residents to rent out units for short periods in entire residential blocks that are kept for rental. But the government should also review the seven-day minimum stay requirement for serviced apartments, he added.

Member of Parliament Joan Pereira suggested that management corporations – commonly known as MCSTs (Management Corporation Strata Title) – be given more power and resources to help in the enforcement on short-term accommodation.

Concurring, Mr Wong said MCSTs can do their part. Under the Building Maintenance & Strata Management Act, MCSTs can pass their own by-laws to manage the use of common property through screening and record-keeping, and register the details of visitors. The URA will also work with the MCST of developments with units listed online so that residents are aware of the rules on short-term accommodation.

Some Members of Parliament also suggested that the occupancy cap for each residential unit be calibrated according to the size of the unit, or the same cap be similarly imposed on HDB flats. (Four-room HDB flats and bigger flats can house up to nine tenants under existing HDB rules.)

“HDB controls are separate, but we are happy to review the caps on a separate basis,” Mr Wong said.

He said the occupancy cap is based on the size of a typical Singaporean multi-generational family. And while HDB flats have predictable designs and layout, private housing comes in wide-ranging configurations, making it hard to formulate a rule that will capture all variations from shoebox units to bungalows.

“A complicated tiered cap would be confusing for the public, and result in uncertainty for those who want to rent or sublet legitimately,” Mr Wong said.

For units currently housing seven or eight persons, URA will allow the tenancy agreements to run their natural course and will not clamp down on them before they expire.

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