Japan's "Zero-Day" Minpaku Rules: Why Overseas Investors Should Focus on 365-Day Hotel Business Act Properties

Japan's tourism authorities now accept that local governments may cut minpaku operating days to effectively zero. Read past the headlines and two implications stand out for investors: license type now decides who wins, and the operators who remain may face far less competition.

On July 15, 2026, the Japan Tourism Agency and other national bodies issued a notice to local governments stating that ordinances which effectively reduce the operating days of minpaku to zero are permissible "to the extent reasonably recognized as necessary." Minpaku here means home-sharing operated under the Housing Accommodation Business Act (the so-called "minpaku law"), which requires only a notification (todokede) rather than a license. You can read the Japan Tourism Agency's July 15 announcement and the accompanying notice. The notice is a form of "technical advice" (gijutsuteki jogen): guidance the national government gives local governments on how they run their affairs under Article 245-4 of the Local Autonomy Act, and it is not legally binding.

Our conclusion is simple. Overseas investors buying short-term-rental (STR) property in Japan from now on should, as a rule, limit themselves to properties that are likely to obtain a Hotel Business Act license, which allows operation 365 days a year, or properties that already hold such a license and are operating under it.

There is also an effect that is hard to see from the headlines. If zero-day rules or shorter operating limits make minpaku unprofitable, more operators will exit. As a result, the facilities that stay, especially those licensed under the Hotel Business Act, will face substantially less competition, putting upward pressure on ADR (average daily rate) and occupancy. That is our view; it is a forecast, not an established fact. We think tighter regulation should be seen not as "the end of minpaku investing," but as a point where winners and losers are separated by license type.

Shinjuku City in Tokyo is the clearest example. The ward plans, in principle, to ban new minpaku in exclusively residential zones and education districts, and to cut the annual operating-day cap in commercial zones from 180 to 120 days, with an ordinance amendment scheduled for 2027, according to Kenbiya and a Kyodo News report carried by Kumamoto Nichinichi Shimbun. In this article we read these developments one level deeper from an investor's perspective, covering property selection criteria, what to do with existing 180-day minpaku properties, and how to operate when competition thins out. This article is general information only. Whether a specific property can obtain a license must always be confirmed with a gyoseishoshi (licensed administrative scrivener), an architect, and the relevant local authority (such as the public health center).

1. Key Terms Used in This Article

For a detailed comparison of the two regimes, see our article Hotel Business Act vs. Housing Accommodation Business Act. Here we cover only the essentials.

• Hotel Business Act (Ryokan-gyo ho): The law regulating businesses that accommodate guests for a fee. Operating requires a license from the local government, and there is no annual cap on operating days.
• Simple lodging (kan'i shukusho): One of the license categories under the Hotel Business Act. When home-sharing is operated without relying on the minpaku notification system, obtaining a license in this category is the common route.
• Housing Accommodation Business Act (the "minpaku law"): In force since June 15, 2018. It allows lodging to be provided in a "residence" on the basis of a notification, but in exchange limits it to 180 days a year.
• Stricter local ordinance (uwanose jorei): An ordinance under the Housing Accommodation Business Act through which a local government further restricts minpaku by designating areas and periods.
• Zoning district (yoto chiiki): An urban-planning classification that divides cities into 13 types and sets the permitted uses and forms of buildings in each. Hotel Business Act operations are not permitted in exclusively residential zones.
• Education district (bunkyo chiku): A district designated to protect the environment around schools. In Tokyo, building or converting to hotels and ryokan is prohibited in Type 1 education districts, and in Type 2 education districts it is restricted in principle, with exceptions possible by permission of the ward mayor.

2. What Happened: The Notice and Shinjuku's Plans in Brief

The main points of the July 15 notice are as follows.

Shinjuku's review is the leading example of a response. The reported details are below; all are plans or expectations as of September 2026.

Kenbiya reports that "about 2,000 of roughly 3,900 notified residences" would be affected. The backdrop is a surge in complaints: according to Shinjuku City's published data, complaints handled concerning notified residences rose from 70 in FY2021 to 924 in FY2025. For how regulation has tightened across all of Tokyo's 23 wards (April 2022 to April 2026), see STR Regulatory Tightening Across Tokyo's 23 Wards.

3. Reading Deeper (1): The Problem Is Not the Number of Days, but the Notification System Itself

News coverage tends to focus on the numbers: "180 days becomes 120," "down to zero." But the point investors should take away lies elsewhere. The Housing Accommodation Business Act was designed from the start to let local governments restrict areas and periods by ordinance, and this notice has extended the lower limit of that restriction all the way to zero. In other words, the number of days a notified minpaku can operate has become a variable that can change even after purchase, decided not by the owner but by the local government.

The notice also accepted, albeit with conditions, restrictions on existing notified residences. In Shinjuku, too, existing facilities are reportedly expected to become subject to the rules after a two-year transitional period. The fact that a property "works at 180 days today" is no guarantee of future income.

A Hotel Business Act license, by contrast, has no cap on annual operating days. Set side by side from an investment perspective, the two compare as follows (the assessments are our own, and future regulation will differ by municipality).

We explain the exceptional cases in which operating within the 180-day limit is rational in Only 2 Cases Where Operating Under the 180-Day License Makes Sense. For ordinary investment purposes outside those cases, we believe the first criterion in property selection should be "can it obtain, or does it already hold, a Hotel Business Act license?"

4. Reading Deeper (2): Why We Believe Minpaku Exits Will Sharply Reduce Competition for Remaining Licensed Facilities

This is the part the headlines do not show. Regulation also affects supply. If operating days fall to zero or 120, we expect many notified minpaku to become unprofitable and exit. Demand for accommodation in the same area will not suddenly disappear, so the remaining facilities will absorb it.

Take Shinjuku as an example. Based on our own research (the reference date and counting method are our own), Shinjuku has approximately 3,500 minpaku (notified under the Housing Accommodation Business Act), compared with only approximately 800 Hotel Business Act facilities. For reference, public data shows 3,749 notified residences currently in existence as of March 31, 2026, according to Shinjuku City, while a Sumida City review committee document puts the number of Hotel Business Act facilities in Shinjuku at 549 (as of the end of December 2024, including hotels). The figures differ depending on reference date and definition, but the underlying picture is the same: notified minpaku outnumber Hotel Business Act facilities several times over.

Against this backdrop, about 2,000 notified residences are reportedly affected. The following is our own simple estimate; it is not a forecast of the actual number or timing of exits.

Note: The figure of about 2,000 is a reported number based on 3,775 notified residences (as of July 15, 2026). Because that base differs from our own figure of approximately 3,500, we converted it into a ratio (about 2,000 ÷ 3,775 ≈ 53%) and applied that ratio. Existing facilities are assumed to become subject to the rules once the grace period ends.

When you consider not only the number of facilities but also the number of days they can operate, the remaining minpaku are expected to be able to operate for only about one-third of the year, even in commercial zones. We expect weekday and long-stay demand in particular to gravitate toward Hotel Business Act facilities that can operate year-round. Our outlook, therefore, is that ADR and occupancy at those facilities will come under upward pressure.

This outlook rests on assumptions, however. First, demand must hold up. If demand itself falls because of the economy, exchange rates, or inbound tourism trends, the effect will weaken. Second, illegal minpaku must not increase. The Sharing Economy Association, Japan, an industry body, has expressed concern that zero-day rules will drive out only compliant operators while illegal operations actually increase. Third, there is the supply of hotels and other accommodation. Please read the numbers as indicating direction only. For supply and demand across the Tokyo market as a whole, see also Tokyo STR Market Analysis and Investment Strategy.

Our view: zero-day rules are a headwind for notified minpaku, but by pushing many of them out, they may reduce competition for licensed facilities that can operate 365 days a year. This is a forecast, conditional on demand holding up, illegal operations not increasing, and the wider hotel supply.

5. New Property Selection Criteria: Work Backward from "Can It Operate 365 Days?"

Once you decide to focus on Hotel Business Act properties, the way you look at property changes. Check the following points before you look at the yield sheet.

Zoning and district designations

Hotel Business Act operations are not permitted in exclusively residential zones, and hotels and ryokan are prohibited or restricted in principle in education districts. Of Shinjuku's 3,749 notified residences, 264 are in exclusively residential zones, 1,500 in residential zones, and 1,566 in commercial zones (as of March 31, 2026). The starting point is to check the property's address on the municipality's urban planning map and confirm both its zoning district and any district designations, such as an education district.

Change of use under the Building Standards Act

Converting a residence into accommodation raises the issue of a change of use under the Building Standards Act. Under amendments that took effect on June 25, 2019, converting a building of 200 m² or less to another use no longer requires building confirmation procedures. However, even where the procedure is not required, whether the building must still meet the standards for accommodation is a separate question (this is our understanding; please confirm with an architect). "Building confirmation" (kenchiku kakunin) is the procedure that checks before construction whether the plans comply with the Building Standards Act, and the "inspection certificate" (kensa zumisho) is the document issued after the completion inspection. For a building without an inspection certificate, it is not clear whether it was built in compliance with the law, and when it is extended or altered, compliance with the standards in force at the time of construction must be verified. Floor area, number of stories, and whether an inspection certificate exists are all items to check before purchase.

Fire safety equipment

Fire safety equipment is required for both Hotel Business Act and Housing Accommodation Business Act operations. The cost of additional works, such as automatic fire alarm systems, varies widely by property, so consult the fire department in advance and factor a quotation into your purchase decision.

Additional local requirements

Some municipalities are also tightening requirements on the Hotel Business Act side. Osaka City's proposed amendment to its Hotel Business Act ordinance includes requirements such as on-site staffing while guests are staying and, for buildings with residents, reinforced-concrete or similar construction. Sumida and Katsushika wards have also added requirements such as on-site staffing for new Hotel Business Act facilities. While these requirements are a barrier to new entrants, we believe they will tend to raise the relative value of properties that already hold a license (estimate).

Assessment by property type

6. Options for Owners of Existing 180-Day Minpaku Properties

For existing owners, the key is to use the transitional period as preparation time. In Shinjuku's case, public comment is reportedly scheduled for October and submission of the ordinance to the ward assembly for February 2027.

Whichever option you choose, start by establishing exactly your property's zoning district, district designations, and notification date. For condominiums, it is also essential to confirm that the management rules do not prohibit lodging use.

7. Operating Strategy as Competition Thins (for Hotel Business Act Facilities)

To capture demand reliably as competition decreases, we focus on the following points. All of them reflect our own operating approach.

• Review pricing flexibly: We expect demand to concentrate on weekdays, when nearby minpaku cannot operate, and in the latter part of peak seasons, when notified minpaku tend to reach their operating-day caps. Rather than sticking to past pricing, we look for room to raise ADR while watching how bookings come in.
• Become the home for long stays: Multi-night and long-stay demand that overflows from minpaku unable to operate for most of the year is an area where year-round facilities have a natural edge.
• Treat neighbor relations as a compliance asset: The trigger for tighter regulation was the rise in complaints. Noise and garbage measures, along with careful communication with neighbors, are an investment for Hotel Business Act facilities too, helping them avoid future regulation and official guidance.
• Keep licensing and operating records in order: At a future sale, the status of the license and records of occupancy and complaint handling will support the property's value (our view).

8. Conclusion: Read Behind the Headlines and Choose by License Type

The acceptance of zero-day rules is a headwind for minpaku. But reading one level deeper as an investor reveals two implications. First, rather than notified minpaku, whose operating days can change at the local government's discretion, investors should focus on properties with a Hotel Business Act license that can, in principle, operate 365 days a year (either properties with a high likelihood of obtaining one, or properties that already hold one). Second, as minpaku exit and competition falls, the remaining Hotel Business Act facilities may enjoy a tailwind in ADR and occupancy (our view).

Whether a Hotel Business Act license can be obtained differs property by property, depending on zoning, the building, fire safety equipment, and additional local requirements. Always confirm feasibility for a specific property with a gyoseishoshi, an architect, and the local authority.

The Room can help with everything from an initial check of a property's licensing potential through to operation.