FREE MALAYSIA TODAY. 15TH MARCH: State government urged to reconsider enforcing new STR rules.
Property owners in Penang who provide short-term rental (STR) stays are facing a dilemma.
A soon-to-be enforced cap on STR could lead to many of them defaulting on their housing loans and eventually losing their property. Banks could also take a hit if these properties have to be auctioned off.
Under the new rules that are expected to be enforced soon, such stays will not be allowed in an apartment building unless 75% or more of the owners agree to it.
If the property owners manage to secure their neighbours’ blessings, they are only allowed to rent their units out for a maximum of three days a week.
Flouting the rule will invite a RM200 fine.
While there are no official figures, an industry source said an STR operator could make RM1,500 to RM2,000 per month for each apartment.
Apart from neighbours who have been complaining about the constant stream of strangers coming in and the noise and disruptions they cause, hoteliers also welcome the cap.
15-day cap a tough pill to swallow
One STR operator, Michael Goh, described the cap as a “tough pill to swallow”.
“Apart from reducing revenues for the operators, it will also open a can of worms,” he said.
He claimed that it is open to abuse by building management bodies tasked to monitor the STR units.
“Errant owners can claim that their cousin is staying over and get away with it, or they may pay off building managers to look the other way,” hesaid.
Goh said obtaining other residents or owners’ approval was also problematic.
For instance, he said, only 10 of the 300 units in his apartment building were occupied by the owners. “The rest live abroad, so if there is a vote, I’m likely to lose.”
Goh said disturbances in strata buildings could be easily resolved if there was an effective joint management body.
Given that many properties used for STR stays are also under mortgage, a curb would have a major economic impact.
“If these rules are enforced, expect a ripple effect of fire sale and job losses for supporting businesses,” he added.
Don’t ban, leave it to professional home managers
Steven Chuah, who manages a portfolio of 100 STR properties across different platforms, said Penang should take the lead in regulating the industry for a win-win situation.
“STRs are part of the local economy. We support local businesses. People stay with us, buy goods at a nearby shop, and travel by e-hailing. It has a positive knock-on effect on all,” he said.
He said the new ruling appeared to have tipped the scales in favour of the hotel industry.
Chuah conceded that unruly visitors were a problem for residents but, he added, such problems could be resolved if professionals took over the management of the units.
“By engaging the services of a professional, owners also stand to make 30% to 50% more in returns from rental,” he said.
He said even if supply was cut, there would always be a demand.
“People in large groups cannot afford to take up a few hotel rooms. It makes more sense to take an apartment,” he said.
Need to protect people, not Airbnb
However, Penang housing, local government and town and country planning committee chairman Jagdeep Singh Deo said the limits were necessary.
“It is not intended to ban STRs but to ensure they are managed responsibly and sustainably,” he told FMT Business.
Airbnb Southeast Asia public policy chief Mich Goh said Malaysians should embrace STRs and capitalise on the benefits of home sharing as the economy recovered.
“It can help the hosts make ends meet and defray the rising cost of living,” she said.