Tokyo's Ota Ward approves first short-term, Airbnb-style home rentals

Tokyo’s Ota Ward on Friday gave permission to an online travel service provider to start renting out private homes on the popular Airbnb model.

It became the first municipality to allow home sharing on a short-term rental basis to accommodate swelling ranks of foreign visitors, although it is requiring stays to be for a minimum of six nights — in a nod to potential lost trade by hotels.

Ota Ward, home to Haneda airport, is launching its so-called minpaku (private stay) program as part of deregulation measures pushed by the central government to ease Tokyo’s hotel shortage.

On Friday, Tomareru, based in Chiyoda Ward, had its application for renting out a house and a condo room approved. The ward plans to accredit more applicants in the coming months, officials said, citing a rising number of businesses expressing interest.

Ota Ward — and the national government — hope that by expanding minpaku they can alleviate the shortage of hotel rooms in the metropolis and accommodate more foreign travelers in the run-up to the 2020 Tokyo Olympics.

The government wants inbound tourism to drive economic growth, as spending by visitors — led by the burgeoning middle class in China — reached ¥3.5 trillion last year, equivalent to the value of the nation’s auto parts export industry.

In 2013, the government moved to make minpaku services exempt from the existing Hotel Business Law on a trial basis by setting up a “strategic deregulation zone” where such services are permitted in designated municipalities. Ota Ward is one of them. The ward passed an ordinance spelling out detailed restrictions and screening criteria in December and started accepting applications on Jan. 29. A similar program will start in Osaka later this year.

But it remains unclear whether the program will succeed, and whether it will keep tabs on what authorities view as illegal rental businesses marketed through Airbnb and other service providers. These are spreading fast across the nation.

Airbnb, a website that brokers home sharing in 190 countries, says more than 5,000 hosts in Japan now share their residences with a total of 525,000 guests per year from all around the world.

Moreover, how or whether Ota Ward’s example will be reflected in the ongoing central government discussions to expand minpaku nationwide is murky.

Central government bodies are in disarray over how to define this relatively new style of paid accommodation. The land and health ministries, which are currently working on creating national-level guidelines for minpaku, are concerned about potential trouble between minpaku operators and their neighbors.

Some members of an expert panel convened by the ministries have argued that individual room renters should be covered by the Hotel Business Law, which all hotels and inns in Japan must abide by and which comes with rigorous building and service regulations. But a deregulation panel under the Cabinet Office, which wants to free up more condo rooms to minpaku, says providers should be exempted from the law.

Under the rules set forth by the Ota Ward Office, those wishing to rent out private housing must notify in writing all neighbors within 10 meters of the rented property before an application is made. The local fire department must also be consulted beforehand.

Also under Ota Ward’s rules, minimum stays are set at six nights and seven days. Guest information such as names, contact numbers and passport numbers must be kept for at least three years, in case they are needed by the police.

A host must also give neighbors a phone number they can call to make complaints and must be ready to respond to emergency inquiries in foreign languages.

Ward officials, who held their second briefing session about the program on Wednesday, were bombarded with questions by attendees, most of whom were real estate businesses eyeing an entry into the minpaku market. The first meeting was attended by some 200 people.

Approached for comment, one individual who attended the briefing called the restrictions loose and easy to work around. He told a reporter afterward that the seven-day rule — imposed to appease hotels and inns that fear losing business — could be ignored.

“I think it’s possible to book two groups of guests on seven-day intervals on paper, while secretly booking others in between,” the man in his 40s said. He declined to be named, but described his company as one that deals in real estate across the Tokyo metropolitan area.

The attendee said the ward’s rules are “unusually lax,” noting that the ward merely requires operators to alert neighbors by placing notices in mail boxes, not necessarily to secure their support.

But he warned some condo residents are sure to lodge complaints.

“The system is designed in such a way that it almost expects trouble to happen after operators are approved,” he said.