The legal status of homesharing in Japan was, for a long time, something of a grey area. While Airbnb had already gained popularity in the country, it wasn’t until June 2017 that the Japanese government officially gave homesharing the green light. With the passing of a new law, Airbnb (and its competitors) will be able to operate without finding themselves blocked by regulatory obstacles.

The minpaku homesharing law, as the legislation is known, provides a framework for the emerging private accommodation industry, and is expected to open the door to growth in line with Japan’s tourism goals. The country entertained a record 24 million visitors in 2016, with the figure set to climb to 40 million in 2020 and a staggering 60 million in 2030, if the government’s tourism targets are met.

For homeowners looking to rent out part or all of their property, these figures hold huge potential. Japan is Airbnb’s most popular destination in the Asia-Pacific region and one of the company’s top ten markets worldwide. Over five million tourists (domestic and international) relied on Airbnb accommodation in the year ending May 31, 2017, and the company estimates that translated to a 920 billion yen boost for the economy.

Currently, Japan has over 55,000 Airbnb listings, a number that could surge as the country battles accommodation shortages in the run-up to the 2019 Rugby World Cup and 2020 Tokyo Olympics. Those looking to become hosts will be required to register with their local government and comply with their specific restrictions (such as designated closure periods). Under the minpaku homesharing law, landlords will be able to rent out their properties for up to 180 days a year. While this may seem restrictive, it is double the cap imposed on London hosts and triple that of Amsterdam.

While US-based Airbnb currently has the lion’s share of the homesharing market in Japan, rivals like Chinese company Zizaike are gaining traction, with an estimated 14,000 properties available for rent. US-based Expedia’s luxury home-rental arm HomeAway is also looking to bolster its presence in the country. 

With the exception of rail giant Keio, which is working to develop private lodgings along its rail lines, Japanese companies have been slow to tap into the private accommodation trend. However, Japanese e-commerce firm Rakuten is making up for lost time; they recently partnered with Tujia, a Chinese rival to Airbnb, to enter the Japanese homesharing market. Chinese tourists comprised an estimated quarter of the 24 million visitors to Japan in 2016, with the number expected to rise. Rakuten have also joined forces with HomeAway.  

It remains to be seen how local authorities will respond to the minpaku homesharing law, which is expected to come into effect in 2018. Concerns about noise disturbances and other disruptions to the harmony that is prized in Japanese neighbourhoods will need to be addressed. However, the overall sentiment seems to be positive, given homesharing’s potential for meeting Japan’s pressing accommodation needs and revitalizing struggling rural communities. 

This article was first published on REthink Tokyo

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