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| Vinhomes Central Park urban center__Photo: Hong Dat/VNA |
The Ho Chi Minh City People’s Committee has just issued a Regulation on the management and use of apartment buildings in the city, banning short-term rentals like those on Airbnb in residential complexes.
According to the new regulation, only mixed-use tourism developments (known as condotels) may be used as tourism accommodation. All other ordinary residential apartments are prohibited from short-term rentals.
Reasons for the ban
The Ho Chi Minh City’s ban on short-term rentals in apartment buildings is actually pursuant to the 2023 Housing Law, effective as of August 1, 2024, which clearly stipulates in its Article 3.8 that the use of residential apartments for non-residential purposes is prohibited. Furthermore, short-term rentals are regarded as accommodation services and therefore subject to several legal requirements such as those on taxes, invoicing, and fire prevention and fighting, to name but a few.
In fact, homestay business has strongly developed in Vietnam in recent years. In big cities like Ho Chi Minh and Hanoi and tourist centers such as Nha Trang, Da Nang and Ba Ria-Vung Tau, many investors buy apartments exclusively for rent for short-term stays, using accommodation apps such as Airbnb and social media platforms to connect with customers. However, the booming of Airbnb-like services has resulted in conflicts between short-term tenants and long-term residents.
“Airbnb renters disturb my entire apartment building” - this is the title of an article published in the online newspaper VnExpress’s Y kien (Perspectives) column where the author, Suzy Apple, shared her unpleasant experience with Airbnb renters.
“My neighbors, a married couple, own a three-bedroom apartment and they rent it out on Airbnb. Every time they have guests, the noise is unbearable. Once, a woman with her 10-year-old daughter rented the apartment and hosted a party here with their friends. Because the apartment has a large balcony, they held an outdoor party and played loud music until five or six in the morning. It was in the middle of summer, so many people had the habit of sleeping with their windows opened for fresh air, only to be disturbed by the noise all night long. My apartment is on the same floor and I had to close all windows and turned on the air conditioner to get some sleep.
Later, I told the Airbnb-hosting couple about the incident. They were shocked as they did not think their guests would cause such a commotion to the neighborhood.”
Not a few Vietnamese residents identify with Suzy Apple.
Trinh Khanh Hoa, another reader of VnExpress who is now living in an apartment in the beach city of Vung Tau, Ba Ria-Vung Tau province, told her story:
“More than half of the apartments in my condo building were put up for short-term rent. Every weekend and holiday, the building was overcrowded with vacation goers. Hallways and elevators were always filled with the reek of cigarette smoke. Noises were seemingly incessant. At night, these people held parties, smoking, drinking, shouting and singing. I filed complaints to not only condo security guards but also the local police office but nothing was changed.
The situation was improved only when the administration of Ba Ria-Vung Tau province imposed a ban on homestay business in apartment buildings. Since then, our living space has become quiet and clean. No one complains about the noise at night; no one complains about the smell of cigarette smoke in hallways and elevators; no one complains about trash, bottles, or cigarette butts falling on the balcony; and the scene of cars parking in a disorderly manner, blocking the exit and entrance to the apartment building, no longer appears.
I think once apartments are allowed to be put up for rent like hotel accommodation, they cannot be called “apartment”. If you want to run a hotel business, you must have your own location, get a license and be subject to management by state authorities. You cannot just buy an apartment and rent it out like a hotel.”
This is exactly the reason why Ho Chi Minh City imposed the ban on short-term rentals in apartment buildings. As explained by the municipal administration, the ban aims to ensure security and order at condo buildings, protect interests of long-term residents, and avoid inconveniences resulting from short-term rentals.
While the ban is warmly welcomed by residents in apartment complexes, investors who have poured money into Airbnb-style apartments in the city have been on pins and needles since they get the news.
Hoang Tuan, the owner of a business specializing in provision of Airbnb-like services in Ho Chi Minh City, anticipates losses of hundreds of millions dong because of the ban. Tuan rents hundreds of apartments from owners at VND15-25 million a month each and then leases them to short-term renters, earning up to VND 60 million per apartment per month.
“We are facing the risk of losing the deposits already paid to apartment owners,” Tuan told the VnExpress.
Unlike Tuan, Quynh Huong (in Thao Dien ward, Thu Duc city) is not a professional investor but she has spent tens of billions of dong, inclusive of loans, to buy two apartments exclusively for Airbnb rentals. These two apartments bring her around VND 30 million on average per month and Huong uses such money to cover her family’s cost of living and repay the debts. But she merely began the business recently and the ban has sparked fears of losses.
“I will probably have to switch to long-term lease which is not as profitable as [short-term rents] and recouping my investment will take longer,” Huong said.
Experts’ viewpoints
According to Chairman of the Ho Chi Minh City Real Estate Association Le Hoang Chau, instead of imposing a complete ban on Airbnb-like services in residential buildings, authorities should formulate a suitable management mechanism.
Sharing the view with Chau, economic expert Le Ba Chi Nhan said Airbnb helps promote tourism and the local economy. Tourists who stay at Airbnb apartments often spend a lot at shops and restaurants in the neighborhood, contributing to stimulating consumption. This is one of the three main drivers of GDP growth. “Many countries in the world have legalized and managed Airbnb instead of banning it,” the expert was quoted by the Phap luat Thanh pho Ho Chi Minh as saying.
“If Airbnb is suddenly banned, thousands of people who have invested in furniture, equipment, and bank loans to buy short-term rental apartments will suffer heavy losses. The Airbnb ecosystem also creates jobs for many people. If it is banned, a series of workers will lose their source of income. Moreover, tourists, especially those taking family trips, will lose a flexible and affordable option, reducing the attractiveness of Ho Chi Minh City compared to other destinations in the region,” Nhan analyzed.-
