Read this: https://www.quora.com/Is-Airbnb-legal-in-Singapore
I believe the URA laws are just guidelines to protect the private property community.
These guidelines were meant to prevent private properties from turning into brothels, gambling dens, drug houses, etc.
You can read it any way you want but these are my views on the matter.
Your neighbours have every right to question their security due to the different guests appearing in and out of your homes.
If possible talk to them and reassure them that Airbnb's verification process is quite strict.
Hosts also need to do their part when choosing their guests as they are equally responsible to their neighbourhood.
If your neighbours can see you welcoming your guests as friends, they most likely won't be too apprehensive.
We can argue forever on whether it is illegal or not.
Just don't forget that taking Uber is not legal as well.
But the government has been trying their best to regulate it.
And they are doing the same for Airbnb.
URA is going through the process slowly because they want to measure the public reaction first.
The success and proper regulation of Airbnb relies heavily on the public.
If Singaporeans want it and if its proven to be beneficial to our tourism industry, URA must adapt as well.
Hotels can cry foul and complain just like Comfort Taxi did. It doesn't matter if the people want it.
So what we all should do is practice responsible hosting.
Airbnb is not just a way to make money, it is also about connecting people (which includes your neighbours as well).
If you want to rent out your unit on Airbnb but either don't have the time or have no idea how to, go visit https://www.guestready.com/en-sg/singapore.
