Kill Your (Vacation) Landlord

Judging from the amount of coverage it’s received from the domestic and foreign press, Airbnb’s decision to remove 80 percent of the properties from its Japanese listings is a big deal. That wouldn’t be surprising except that previously the Japanese press, at least, didn’t seem overly interested in the house-share service. What makes it news is mainly timing. On June 15, the new Minpaku Law, which regulates the short-time rental of private property, goes into effect, right before the vacation and tourist season starts. Apparently, Airbnb, nervous about a government crackdown, decided not to take any chances and dropped listings of properties that couldn’t prove they had already received permission to operate under the new law. That means people who had made reservations at these properties in the past are out of luck unless their owners can somehow get a license to operate by the time the visitor is scheduled to occupy the room or home. Some people are blaming Airbnb itself for, presumably, not being prepared for this sort of outcome, which has been apparent at least since the beginning of the year. Whether the visitors who made reservations have gotten the message isn’t clear, but it’s likely that, come next month when they show up in Japan after having spent money on air fare and other vacation-related expenses, they may find themselves locked out of the place they thought they would be staying at. One can imagine scores of foreigners wandering the streets of Tokyo and sleeping under bridges. Thank God it’s a safe country.

Seriously, though, the Minpaku Law, regardless of how poorly it was conceived and written, was inevitable, and its purport with regard to Airbnb is hardly limited to Japan. What makes it momentous, and, in the long run, perhaps prescient, is that it adds a layer of national intent to locally enacted rules that weren’t being enforced very strongly before. In other words, Airbnb didn’t take local regulations at face value until the central government said they supported them through the law. Ostensibly, the reason for the stricter definitions is public order–protecting communities where property owners rent out rooms to strangers. Less obviously, the Minpaku Law supports the powerful hotel and innkeepers industry, which has been calling for the banning of peer-to-peer short-term rentals. And even less apparently, but no less potently, the law favors another powerful lobby, the real estate industry, which can use the law to corner whatever market is left of short-term vacation rentals, since many of the rules call for oversight by corporate entities, or, at least, entities that act like corporations.

The Minpaku Law essentially covers two types of properties. The first type is a property that has applied for and received the proper permits, meaning they comply with the hotel law. From the outside, they may look like a regular private residence, but inside they adhere to fire regulations and there is someone who manages the property on site. Minshuku, capsule hotels, and guest houses fall into this category. The second type are properties that heretofore fell into the so-called gray zone, rooms that did not comply to the hotel law but weren’t really breaking any laws–until now. Though fire laws and other related safety regulations will presumably be more strictly enforced for these properties, the main difficulty will be stricter enforcement of zoning laws, which are locally enacted. The main blanket, national rule is the one that says minpaku can only rent out rooms for a maximum of 180 days out of the year. Also, if the property is in a condominium, the owners association must be apprised of the existence of a minpaku and approve of it in writing, which may end up being the most difficult condition to satisfy, even when localities don’t prohibit minpaku from residential zones.

In all these regards, the city of Kyoto seems to have enacted the strictest minpaku laws in the country, which is both ironic and understandable since Kyoto has already become famous as the most contentious region of Japan in terms of the large influx of foreign tourists. Residents are reportedly up in arms about the hoards of outsiders monopolizing city services, like buses, and crowding the streets. For sure, these stricter regulations are a reaction to this phenomenon, but you can’t discount the power of the city hoteliers. At bottom, what the law means is that Kyoto will definitely not have enough rooms to house all the tourists who want to visit, and that seems to be fine with both the city’s residents and their leaders. Less happy are businesses who hope to cash in on the tourist boom.

Among the minpaku regulations specific to Kyoto is one that says an owner must place clear notices within 20 meters of the designated property saying that the owner has applied for registration as a certified minpaku with a contact where neighbors can voice their concerns. Certification will not be granted if neighbors tell the city that they could not talk to the owner. This is basically the same law in place for retailers in Kyoto. Also, all minpaku have to have fire alarms and sensors. Garbage rules are the same as those for commercial enterprises. If the owner of the property does not live on the premises, then a management proxy must be available not more than ten minutes by foot from the property. If the property is in a designated residential zone, it can only be let from Jan. 15 to March 14, meaning the two off-season months. In March, there were some 4,000 properties listed on various minpaku sites for Kyoto. As of June 4, there were only 3, and those were properties where the owner lived on the premises.

In other areas, Kobe prohibits minpaku in all residential zones, all year round. In Osaka, minpaku can only be in a property that faces a road that’s at least 4 meters wide. Some cities limit stays to weekdays; others to weekends. Some require that foreigners submit copies of their passports to the authorities. In a June 7 article, Tokyo Shimbun reported that a 40-year-old female temp worker in Osaka had been renting out a room in her home, which she shares with her mother, through Airbnb since April 2017, but now she says she’ll probably give up the enterprise because “the rules are too hard.” For one thing, her local government says that while someone is staying in the room she lets, either her or her mother must not be absent from the premises for more than one hour a day, and she has to work, so even if she installed the proper fire safety equipment, another rule, it would be impossible to adhere to the regulations. She charges between ¥2,000 and ¥3,000 a night, and only rents to single women and couples. She’s never had a problem with guests or with neighbors, but, then again, she’s never told neighbors about her rentals and suspects that if she did–another new requirement–they’d reflexively disapprove.

The woman’s main gripe is that she lives on the premises, and thinks that such a condition automatically cuts down on any potential problems. She would hope that the authorities would cut her some slack for just that reason, and Tokyo Shimbun implies that the regulations may be altered in the future as local governments begin to see the effect the laws have on local economies. They may relax the rules to allow more flexibility in peer-to-peer rentals if local businesses see a benefit. One professor told the newspaper that, in a sense, the rules were probably made purposely strict in the beginning because that would satisfy more people who are worried about strangers in their midst. Once the excitement dies down, local governments may become more liberal.

So Airbnb may simply be counting on this possibility and decided to go with the program for the time being so as not to draw the regulatory wrath of the government, which could very well ban the whole system. As of now, only a fraction of the owners who previously ran rental properties have applied for certification, but that could change after June 15. The battle isn’t over, but it could still prove to be a bloody one.

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One comment

  1. Margaret · June 20

    The Minpaku law will regulate and legislate the Airbnb industry in Japan.
    The Airbnb hosts who are on the Airbnb website after the 15th of June are all legit business, as Airbnb has asked them to provide the company with the JTA registration certificate.
    That registration certificate should also be displayed at the Airbnb property.
    In case now that you booked before the 15th of June and your booking has been cancelled, you need to contact Airbnb ASAP to claim the cost of the reservation plus any additional expences that you might had to pay because of the cancellation.
    Airbnb also give a $100 compensation voucher for future use.
    See more here: http://hotels-fairy.com/airbnb-in-japan-cancelled/

    Like

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