Airbnb in Japan: Local Governments Slap Strict Restrictions on Rentals

By Jeff Wynkoop

In June 2018, the new national law authorizing Airbnb-style letting of private rooms in homes (the so-called Minpaku Law) will come into force.

Currently there are two options for running a minpaku legally: (1) a minpaku can be set up and operated in one of the few special designated zones (特区民泊) around the country (in Ota-ku in Tokyo, or in Osaka City, Niigata, Kitakyushu), or (2) a minpaku can be set up with a license as a short-term accommodation under the Hotel Business Law.

The problem is, both of these options are relatively restricted, with regulations that are ill-suited for running a minpaku. For instance, in principle you are supposed to have at least 25 square meters of exclusive space for each guest at a minpaku in a special zone, and guests must stay at least two nights.

In the alternative, if you want to operate a minpaku under the Hotel Business Law, your building had better be under 100 sq. meters in total area, or you may be faced with having to apply for a change of use for the building prior to getting your hotel license. And getting a hotel license alone is no small task.

AirBnb Races Ahead

Faced with such regulation, the market hasn’t stopped. Airbnb recently announced that in 2017, Tokyo was its biggest market worldwide, with Osaka in third place. However, since there hasn’t been an explosion in new hotel business license applications over the last few years, this means that a huge majority of minpaku being operated in Tokyo are in violation of the Hotel Business Law, unless all of these guests are staying in Ota-ku.

The Minpaku Law

Tourism brings big money into the country, and the government doesn’t want to kill its golden goose, so ostensibly it wants to help the market become legal while bringing order to the situation. In one fell swoop, the new national law will authorize minpaku to operate up to 180 days a year all over Japan.

However, at the same time the fine for running an illegal minpaku will be increased from “not more than 30,000JPY” to “not more than 1,000,000JPY”. Further, under the law each district municipality (自治体) is allowed to enact rules “to fit minpaku into the fabric of the local community” (地域の実情にあわせ), and there’s the rub.

How Local Governments Are Reacting: From Hokkaido to Kyoto

Many localities all over Japan are either working on or have already enacted rules to severely curb minpaku.

Ota-ku in Tokyo was the first to pass regulations on December 8th, making all minpaku in residential districts in Ota-ku illegal (making 70-80% of its area restricted, where hotels are also not allowed to operate).

In Kyoto, minpaku in residential districts will only be allowed to operate in the months of January and February, and for minpaku run by third-party operators, a supervisor must live within 800 sq. meters of the building.

Places like Yokohama City, Shinjuku-ku, Nerima-ku, Bunkyo-ku, and Setagaya-ku are only allowing minpaku in residential districts to operate on weekends and holidays, although some regulations make a distinction depending on whether the minpaku is being operated with the owner on-site or not.

Nakano-ku is restricting minpaku in residential areas to weekends and holidays, however the authorities may allow special exceptions close to stations or in areas with few hotels.

Hokkaido plans to restrict operations to weekends and holidays also, as well as near public schools.

Nagano prefecture is reported to also be considering separate minpaku rules.

Don’t believe the hype. A new Airbnb-style law may be coming into force next year, but that doesn’t mean a simple notification will allow you to pursue your minpaku business unfettered anywhere in Japan. It will be interesting to see how enforcement goes over in the course of the next few years.