New minpaku law sees 98% of listings in Kyoto disappear

A month has passed since Japan’s new rules for home-sharing were introduced. Strict registration requirements have caused a large number of hosts to drop out of the market. In Kyoto City, the number of approvals sits at 47 as of July 13, a stark difference to the 3,000-plus lodgings that were operating beforehand.

An annual letting limit of 180 days and additional regulations imposed by Kyoto City have made casual letting unprofitable for many hosts.

Of the 29 applications received as at the end of June, 25 were for properties where the host also resides in the home, while the remaining 4 were for properties where the host lives next-door or nearby. The City was expecting to have a large number of applications from corporations owning blocks of apartments, but has yet to receive any.

One registered host reported an occupancy rate of 66% over the past month, despite the rainy season. They doubled their nightly rate to 10,000 Yen in response to strong demand from tourists.

Even with an increase in nightly room rates, the annual cap of 180 days per property is expected to limit potential revenue by a third. In order to operate all-year-round with no annual cap, a host must obtain a hotel license – something that many homes do not qualify for.

Furthermore, in exclusive residential zones within Kyoto City, hosts are only permitted to rent out their homes between mid January and mid March for no longer than 60 days per year. For hosts that do not reside within the property, they must have a caretaker stationed within 10 minutes of the property to deal with any problems or troubles that may arise during a guest’s stay.

When the new law was introduced on June 15, the Japan Tourism Agency requested a list of advertised properties from the major short-term letting sites. Of the 3,301 listings within Kyoto City, at least 15 were determined to be operating illegally, while the status of 61 were unknown due to incomplete addresses. Kyoto City is the first locality in Japan to introduce a liaison council with the local police. A cease-and-desist order was issued to a foreign host of an illegal lodging at the end of June.

Source: The Mainichi Shimbun, July 16, 2018.