No approvals yet under new short-term letting rules in Kyoto

With less than a month until Japan’s nationwide short-term letting (minpaku) law goes into effect, applications from potential hosts in Kyoto City remain in the single digits.

The city’s application desk has received six applications, while zero have been approved. Kyoto City has the strictest minpaku rules in the country, with properties in exclusive residential zones limited to operations for up to 60 days per year between January 15 and March 15 (the winter months). Properties outside those zones that are not occupied by hosts must have a licensed property manager stationed around the clock within a 10 minute radius of each property. There are some exceptions for properties where the host lives on the premises, and for traditional machiya townhouses.

The six applications received by the city as of May have all been properties where the host resides in the premises. The city’s support center says the reason for the small number of applications may be due to the large number of existing properties that are not occupied by hosts, thereby requiring a manager to be located nearby. For operators with properties scattered throughout the city, this poses a logistical issue, while hosts of a single property may also find this unfeasible and unprofitable. Property managers that operate the accommodation on behalf of hosts must also register with the government. Nationwide, there have only been 156 of these registrations to date, with just 15 located in Kyoto City.

Hosts and property managers are scrambling to file paperwork. One potential host reported that it has taken 2 months to prepare the necessary paperwork, which included a site inspection from the fire department.

Under the nationwide law, which starts from June 15, short-term rentals will be allowed for a maximum of 180 nights per year without requiring a hotel license. Hosts, however, must meet a long list of requirements and must register with the district in which each property is located. For apartment buildings, permission from the owners association or landlord is required. The majority of condo-style residential buildings across Japan have already implemented bans on short-term letting. Each local district has the power to introduce further restrictions, and many plan to ban rentals on weekdays and in certain zones. Up until now, a hotel license has been required to rent a property out for a stay of less than 30 days. If hosts want to bypass the new law, they can obtain a hotel license although licensing requirements are strict and suitable properties are scarce.

Hosts who are found to have violated the new short-term accommodation law may face fines of up to 1 million Yen or up to 6 months in jail.

Source: The Kyoto Shimbun, May 15, 2018.