Tokyo condos shut doors on Airbnb and other vacation rental businesses

With more foreign travelers keen on renting Japanese private homes amid an inbound tourist boom, residents in high-rise condominiums are doing the opposite of what one might expect: forbidding vacation rental website services due to concerns about security and living conditions.

Daisuke Shimada, 54, leads a tenants’ association group that campaigns against residents or owners of condos using their homes as “minpaku,” or paid temporary accommodation. He has been president of the building’s homeowners’ association for eight years. Its members, all of whom are condo owners, have given vacation rental services the thumbs down.

“Having tight security is one of the benefits of living here. We’re not prepared to deal with any trouble caused by unfamiliar visitors” from inside or outside the country, said Shimada, referring to the 44-story Apple Tower building whose amenities include onsen hot spring baths in each apartment and stunning views of Tokyo Bay.

Residents of the condo located in the Shinonome area, which is one of several luxury buildings adjacent to the area that will host the 2020 Tokyo Olympics and Paralympics, say they worry about noise and other trouble, such as visitors not complying with garbage disposal rules.

APA Community, a condo management firm, oversees about 30 housing complexes in the capital. “Almost all of those under our management service in Tokyo have drawn up new regulations forbidding home-sharing and paid accommodations,” said Yuichiro Fujimoto, 36, who is in charge of management services at the Apple Tower. The firm checks vacation rental websites almost monthly to ensure Apple Tower apartments are not listed.

Some homeowners’ associations in the neighboring Ariake district, where high-income individuals have purchased apartments as investment property, have taken similar measures to prohibit owners from renting out their properties for profit. They say they are wary of unfamiliar people staying in the properties.

The district is known for its iconic night-time harbor view, featuring the Rainbow Bridge that connects Tokyo with the artificial island of Odaiba across Tokyo Bay.

Japan has seen an increase in demand for lodging amid a surge in foreign visitors combined with a shortage of hotels and inns. The number of overseas visitors has grown by an average of 34 percent annually from 2011 to 2016. From January to October this year, it surpassed last year’s record of over 24 million and the figure is expected to exceed the government target of 40 million in 2020.

Vacation rental website providers, such as Airbnb Inc. and similar local businesses, have played a key role in catering to this increasing demand to shelter inbound tourists.

But having visitors stay in private housing without the permission of local authorities is illegal under Japan’s existing lodging business law, except in areas designated for minpaku accommodation with approval by the central government.

However, the current legal framework has not prevented headaches for neighbors of housing units used to accommodate travelers. According to a 2016 survey by the Health, Labor and Welfare Ministry, 83.5 percent of private lodgings are run without authorization, or under the radar of local authorities. In more than half of the cases local authorities are unable to contact housing owners or operators, another survey by the ministry showed.

Amid suspicion over unlawful business operations, complaints by residents and public authorities, such as police and fire departments, to municipal governments nationwide ballooned to 10,849 in the year to March, up 1,413 from a year earlier, as familiarity with the new business practices became widespread.

Rumi Yamazaki, sales promotion manager at a property investment consulting firm in Tokyo, said at a seminar for investors that gross revenue per square meter from private lodging businesses is 4.8 times higher than rooms rented normally.

In June this year, the Diet enacted a law that allows property owners across the country to rent out vacant homes or rooms to tourists for up to 180 days per year after notifying municipalities. The law will come into force next June. Prior to this move, Sumitomo Realty & Development Co., the country’s largest supplier of condos and apartments, started including a ban on paid accommodation in a regulation draft for some properties it has sold since April 2015.

Some homeowners’ associations at existing condos have also revised regulations on vacation rentals, following proposals by Sumitomo’s housing management firm affiliate. Security appears to be a major source of concern.

“Security is supposed to be ensured by multiple measures at a condo. The homeowners’ association assumes to know who lives there,” said Toshiya Suzuki, spokesman for Sumitomo. “Security systems will collapse internally if many unspecified persons are allowed to enter the property.”

Tokyo’s Koto Ward, which encompasses about 3,700 private housing buildings, including a number of high-rise condos in the Tokyo Bay area, opened a reception counter for revisions to condo regulations in late September.

Similar moves have been seen across the majority of Tokyo’s 23 wards after the government proposed in late August a revised prototype for the regulations of homeowners’ associations that aims to encourage measures preventing issues in the private accommodation business ahead of the new law’s enforcement next June.

Hideaki Umemura, head of the housing division at Koto Ward office, said, “Some locals tell us they have recently seen unfamiliar foreigners frequenting private housing,” he said, adding that some have made requests to strictly ban minpaku in their buildings.

The Mizuho Research Institute said in its latest report that a hotel shortage in Japan would continue toward 2020, adding that Tokyo may face a serious shortfall around the Olympics and Paralympics. But for Shimada, back at Apple Tower, peace of mind outweighs meeting the increasing accommodation demand — especially if vacation rental businesses are flouting regulations and buying properties only to reap profits.

“There is no guarantee that every single resident and owner will follow our regulations,” said Shimada. “Our owners association will issue an advisory to stop such practices first, and prepare for lawsuits as a next step. With the central and local governments boosting minpaku business, we are concerned that professionals or entities in the private lodging business might launch their services by buying rooms here.”