Updated: 28 November 2019
Airbnb is the clear alternative when you think of hotels. Not only does it allow the landlords to earn rental for short-term stays but it also enables tourists to enjoy localised experiences of a particular destination.
But, why is the Housing and Development Board (HDB) not supportive of it?
HDB, like Urban Redevelopment Authority (URA), has firm stance of not allowing short-term rentals for public housing units. HDB officially stated there is no plan to review the short-term stay rules, which aim “to pre-empt high turnover of occupants.”
Airbnb-style accommodation could affect the living environment for HDB residents. Could this be the only reason? Let’s brainstorm and deduce the possible rationale behind it.
Reasons Why Rules Against HDB Short-term Rentals Remain
1. HDB Flats are not for investment purposes
HDB flats are intended to provide affordable and stable housing to Singaporeans at a heavily subsidised rate. It comes with many restrictions to ensure owners are not profiting from the purchase quickly. Repurposing the HDB flat into an Airbnb would defeat its main purpose as an affordable accomodation.
2. Sustain the prices of HDB flats
You may wonder what has it got to do with the pricing of HDB. Let’s look at a scenario to illustrate one of the possible impacts.
A deluxe room in Amara Singapore costs SGD309.70 for one night. Meanwhile, a 3-room HDB unit situated directly across Amara Singapore can demand a rental of SGD 2,400 a month.
On average, the rent is only about $80 a night. Let’s say I am the owner of the flat, and I rent out my flat at $160 a night for the whole flat; I would be earning two times more.
What do you think will happen if we multiply this scenario by 1000, 10000 or even 100000 times? Investors would start buying an HDB flat at strategic locations to profit from short-term stays.
Usually, those HDB flats near tourist attractions have shorter remaining lease and typically demand a lower price as compared to those new HDB flats in the vicinity. Now, the return on investment doubles. A cheap old HDB flat does not seem like a lousy investment choice after all.
3. Ensure the survival of the hotel industry
Airbnb is a huge disruptor in the hospitality industry in many parts of the world. For the unique case of Singapore, more than 80% of Singaporeans are currently residing in HDB. Imagine the tremendous supply of HDB flats that will be competing with hotels if short-term stays are allowed.
4. Lack of community bonding
HDB aims to build cohesiveness within the community, an extension of the “Kampung” spirit from our golden days as evidenced by the different policies such as the Ethnic Integration Policy that set a maximum quota to the mixed race type residing in the blocks.
With Airbnb, this would be against the objective of building a cohesive community as many of the units would be rented to foreigners who would only stay for the short-term and not the long term.
5. Comfort and safety of long-term residents affected
Another main issue with Airbnb is that it affects the comfort and safety of the residents. Unlike private property, like condominiums, public housing are not equipped with guards on duty.
Neighbours in the same HDB estate are often familiar with one another as they would have resided there for a long time. If HDB flats were to be repurposed as Airbnb units, there would be many strangers in the neighbourhood whose background are not familiar to the long-term residents in that estate.
Cases like this significantly compromise the safety of the neighbourhood. Furthermore, tourists may not spare a thought to the neighbours since their stay is temporary and may cause disturbances in the community.
HDB has all the right to object Airbnb in HDB flats, and they are all valid. How about you – what is your take on this issue?
Contributor: Leow Wei Min