Airbnb is currently one of the largest online home-sharing marketplaces that allows for individuals to list their unused space, discover and rent vacation homes from all over the world. The company was founded in August 2008 in San Francisco, California by Brian Chesky, Joe Gebbia and Nathan Blecharczyk.
The company provides a unique accommodation experience for travellers with listings include majestic castles, villas and even lighthouses. Airbnb presently has more than 2 million unique accommodation listings in more than 34,000 cities across 191 countries worldwide. The company has served over 60 million guests since its launch.
Notable investors include General Atlantic, Tiger Global Management, Sequoia Capital, Hillhouse Capital Group, Founders Fund, Andreessen Horowitz and Greylock Partners, with USD3.39 billion raised during its funding rounds.
Airbnb is currently valued at USD25.5 billion.
Airbnb in Singapore
In November 2012, Airbnb launched its Asia Pacific headquarters in Singapore after announcing its strategy to aggressively enter the Asian market with the goal of acquiring an additional 2 million property listings from within the continent. At the time of its launch, two local startups that offer similar services have already been in the Singapore market for some time (Roomorama and Travelmob).
According to Airbnb, there are currently close to 600,000 members registered in Singapore. Collectively, users in Singapore have booked more stays than the rest of Southeast Asian users combined. Airbnb has become one of the largest and most popular online vacation rental marketplace platform in Singapore.
A check on Airbnb’s website shows that there are currently over 6,000 properties in Singapore that are listed for rent. While the listings on the platform are largely private properties, it was also noted that some public housing properties were also listed for rent. What users may not realise is that by listing their properties on home-sharing platforms such as Airbnb, they may have potentially flout local regulations.
According to the Urban Redevelopment Authority’s subletting guidelines, private home owners should not rent out their properties or rooms for short-term stays i.e. stays that are lesser than six months. Under current rules, private home owners that flout the guidelines may face a fine of up to $200,000 and a jail term of up to a year.
Similarly, the Housing Development Board (HDB) which oversees public housing development and regulations in Singapore, does not allow the subletting of HDB flats or rooms to tourists for short-term stays. If caught, home owners are required to pay a financial penalty and their homes may be acquired by HDB.
The implementation of the regulations and guidelines to restrict short-term stays was meant to avoid the high turnover of occupants should short-term stays be allowed. The expected increase in human traffic may cause disturbances and safety concerns to the neighbours. In 2014, two public flat owners had their property repossessed by HDB after they were found to be renting out their flats to tourists for short-term stays.
Despite this, Singaporeans seemed unfazed by the regulations and guidelines that have been implemented by the authorities. This can be seen in the high number of Singapore property listings available on home sharing platforms such as Airbnb and Roomorama.
The authorities are also aware of the rising popularity of home-sharing platforms such as Airbnb in recent years which may require new regulations to be introduced and existing regulations to be amended. For instance, the URA held a 4-month long public consultation in 2015 on its private property subletting guidelines. The consultation however remained inconclusive, with the statutory board stating that it requires more time to review the development of the short-term rentals issue.
Nevertheless, the local authorities have been taking steps to ensure that the regulations in place are in tandem with the development of new methods in doing business such as the rise of ride-hailing platforms and home-sharing platforms in recent years.
*Note: 80% of Singaporeans are currently living in public housing provided by the Housing Development Board.
URA’s subletting guidelines: https://www.ura.gov.sg/uol/buy-property/about/leasing/residential.aspx
URA’s guidelines under review: http://www.straitstimes.com/singapore/housing/ura-needs-more-time-to-study-short-term-stays-issue
URA and HDB’s reply on rules on short-term rentals: https://www.ura.gov.sg/uol/media-room/forum-replies/2013/sep/forum13-19.aspx
Two HDB home owners lost their flats: http://news.asiaone.com/news/singapore/two-lose-hdb-flats-renting-them-tourists