Airbnb-Style Rentals Will Be Legal in Japan as of June 15th: Here’s what you need to know

Airbnb-style accommodations in Japan, known as minpaku (民泊) will be officially sanctioned on a national level as of June 15th, 2018. Here are the main things you should know as a potential Airbnb-style minpaku host or guest.

Will I be able to legally rent out my home on Airbnb?

Yes, with some serious restrictions. The new Minpaku Law (officially, 住宅宿泊事業法, jyutaku shukuhaku jigyou hou or 民泊新法 minpaku shinpou, for short) will allow you to rent out your home for short-term stays.

The law requires homeowners to register rental properties with your local government. The registration process includes fire safety checks and submitting proof that you are mentally sound.

However, the main stipulations that may deter many Airbnb hosts are the following:

  • You can only rent out your home for a maximum of 180 days a year.
  • Local municipalities have the final authority to regulate minpaku rentals in their area and are allowed to place further restrictions on the 180-day national cap, as well as banning minpaku all together or stipulating certain months when minpaku rentals won’t be allowed.

The annual 180-day cap on Airbnb-style rentals and ability for local governments to implement stricter rules is considered a victory for the hotel industry, which opposes private properties being used for tourist accommodation.

Some (currently) grey-zone Airbnb hosts have said that the 180-day annual cap may cut into their profits enough to make them pull out of the business.

What are some examples of local government restrictions on Airbnb-style rentals?

In a previous post (Local governments slap strict restrictions on Airbnb in Japan), we gave examples of the kinds of restrictions being implemented locally. Here are some of those examples, plus new ones that have since been passed.

  • Ota-ku in Tokyo was the first to pass regulations (on December 8th, 2017), 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 between January 15th  and March 15th. Also, for minpaku run by third-party operators, a supervisor must live within 800 sq. meters of the building. More than 50 million visitors come to Kyoto annually, especially during the spring and fall seasons, and the minpaku blackout months give a monopoly to hotels during the busy season.
  • Yokohama City and Shinjuku-ku, Nerima-ku, Bunkyo-ku, and Setagaya-ku in Tokyo 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.
  • The tourist magnet of Shibuya will allow minpaku in residential areas only during school holidays, with certain exceptions, so children will not meet strangers on their way to class.
  • Nakano-ku in Tokyo 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.
  • Chuo-ku (home to Ginza) in Tokyo has forbidden weekday rentals. The reasoning is that that allowing strangers into apartment buildings during the week could be unsafe.
  • Hokkaido plans to restrict operations to weekends and holidays also, as well as near public schools.

Do I really have to register with the local government to operate an Airbnb rental?

By law, although operators (hosts) are required to register with the local authorities there has not been a rush to register. According to the Japan Tourism Agency, as of April 13th, 2018, there have only been 232 registrations nationwide. As a reference, Airbnb currently has about 60,000 property listings in Japan.

One thing to keep in mind, however, is that the fine for running an illegal minpaku will be increased from “not more than ¥30,000” to “not more than ¥1,000,000”.

How will all this effect me as a potential Airbnb guest or tourist to Japan?

The main impetuses behind the the passage of the Minpaku law were to bring some order to an already thriving private accommodation market and to ease the current shortage of hotel rooms. In 2017, a record 28.7 million tourists came to Japan, up nineteen percent year-on-year. Japan aims to host 40 million foreign tourists a year by 2020, when Tokyo will host the summer Olympic games.

There is already evidence, even before the law officially goes into effect, that the availability of Airbnb-style accommodations has pushed down hotel prices. According to a survey by Booking.com, the worlds’ biggest hotel booking site, the average hotel room rate in Japan fell 9.4% year-on-year in 2017. The Ministry of Internal Affairs Retail Statistics Price Survey also shows that weekday hotel accommodation rates have decreased seven percent in the last two years.

Your choice of where to stay in Japan and how to look for that accommodation will also dramatically increase as major Japanese companies are entering the short-term private accommodation space. Rakuten Travel will start listing minpaku-style rentals on its hotel reservation site this fall. Search results will allow users to compare private accommodations side-by-side with hotel rooms. Japan Travel Bureau (JTB), Japan’s largest travel agency, already made its foray into the market in 2017, and Family Mart has partnered with Airbnb, so that you can pick up the keys to your Airbnb rental at the nearest convenience store, for easy after-hours check-in.

Is is estimated that the number of private short-term rental units will increase to over 100,000 in the next twenty years, an increase of about sixty percent from the current level.

Sources: Nikkei Shinbun (May 31, 2018), min-paku.biz news

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