How Tokyo’s Tighter Short-Term Rental Rules Affect Licensed Inns

This is not simply a story of minpaku being banned. Tokyo has several accommodation regimes that are legally quite different from one another. The current wave of regulation is changing the value of each of them in very different ways.

We are not minpaku specialists or analysts. We run residential rental property across Tokyo, Kanagawa, Saitama and Chiba, and we follow this market. Here we bring together the information published so far and set out how we read the change.

First, the four types of accommodation business in Tokyo

In conversation all of these may be called “minpaku”, but in law they fall into four types.

A minpaku under the 2018 Act may operate for up to 180 days a year, counted from noon on April 1. Ward ordinances can shorten that further. Licensed lodging under the Inns and Hotels Act has no such limit.

Sources: Japan Tourism Agency, minpaku portal: What is the Private Lodging Business Act? (Japanese)↗ · Ota City, minpaku systems in Ota (Japanese)↗ · Ota City, Q&A on special-zone minpaku certification (PDF, Japanese)↗

2018 opened the door; 2025–2026 is closing it again

1. June 2018 Private Lodging Business Act takes effect — in effect, minpaku is legalised
2. 2018 onward Use of the system expands rapidly
3. 2025–2026 Wards tighten their ordinances one after another
4. June 2026 All 23 ward mayors jointly ask the national government to review the private lodging system

The mayors ask for wider local powers and a move from notification to licensing with periodic renewal. They also want a domestic address requirement for overseas operators, tighter rules for management companies, and regulation of online travel agencies that list illegal properties. The Act has not yet been changed. But the direction has moved a long way since 2018.

Tightening is not happening in one ward only; it is spreading across the 23 wards. Shinjuku matters most. With 3,775 minpaku, about 22% of the total, applying new rules to existing facilities there would have the largest effect of any ward.

Sources: Edogawa City press release: request on the proper operation of private lodging businesses (June 18, 2026) (Japanese)↗ · Request document (PDF, Japanese)↗

How many minpaku are there in Tokyo’s 23 wards?

As of July 15, 2026. Source: Japan Tourism Agency, notification and registration status under the Private Lodging Business Act↗

They are highly concentrated. Shinjuku, Sumida, Shibuya and Toshima alone account for 9,760, about 58% of the 23-ward total. A rule change in these four wards moves the whole Tokyo market.

Despite the tightening, the number is still rising: 16,243 on March 13, 2026 and 16,920 on July 15. That is 677 more in four months (+4.2%). The claim that regulation has already forced large numbers to close does not match the statistics.

What matters more than facility count is how many nights can legally be sold. A minpaku that can open 180 days a year and one that can open 63 days supply very different amounts of accommodation.

In Toshima, the legal maximum for its existing 1,826 minpaku falls by about 33%. For new facilities in Shibuya’s designated areas, 180 days become 63, about 65% less. In Sumida, Katsushika and Taito, new minpaku are confined to weekend- and holiday-centred operation. How many will close cannot be said yet.

Source: Japan Tourism Agency, notification and registration status under the Private Lodging Business Act — as of March 13, 2026 (PDF)↗ · as of July 15, 2026 (PDF)↗

How much licensed lodging does Tokyo have?

Facilities licensed under the Inns and Hotels Act in the 23 wards, end of FY2024:

Source: Tokyo Metropolitan Government, Tokyo Statistical Yearbook↗

A hotel can have hundreds of rooms, so facility counts are not supply. But the pattern is clear. Minpaku are most numerous in Shinjuku, Sumida, Shibuya, Toshima and Taito, exactly where rules are tightening. The wards are not suppressing demand for accommodation. They are

tightening the constraints on a model that converts large numbers of homes into short-term stays.

The demand does not disappear. It moves to hotels, simple lodging, existing ryokan and legally compliant whole-building lodging.

Why running a minpaku in Tokyo has got harder

That is the regulation. What follows is our own sense of the market. It comes from viewing properties, including inspections for M&A deals, and from talking with people in real estate and hospitality.

On the ground, the first reason is simpler: a great many people rushed to open minpaku before the rules arrived, and supply has run ahead of demand. Inbound demand in Tokyo is not falling. But Japan–China relations and visa issues have reduced Chinese visitor numbers somewhat, and a fair number of minpaku are not reaching the bookings their operators assumed. In the early days, individual investors leased ordinary homes and sublet them for short stays. Now there are simply too many players.

Several problems have also come to the surface:

• Amateur, half-finished operation producing complaints and trouble
• Landlords raising rents at renewal, or fixed-term leases that are hard to renew, or cannot be renewed on the same terms
• Well-capitalised investors entering, complying properly with the law, and offering better buildings and service

With a leased property, it is always uncertain how much you can justify investing in something you do not own. So lease-based minpaku have lost their edge, and the market is moving to more professional hands. Licensing is tightening too. In some cases, rules applied retroactively can stop an operation that was previously fine.

We suspect the only operators left will be those with real capital, who own good buildings themselves and are in it for the long haul — not a hit-and-run business.

What may become scarce: existing whole-building inns

This is not the end of minpaku. But operating days are being shortened, new entry in residential areas is being closed off, and the rules are reaching unstaffed inns. We expect legal accommodation supply to consolidate into lodging facilities with proper management, building and fire compliance, and operating systems.

The scarce asset is not simply “a property with an inn licence”. We think it is one that meets these conditions:

• It already holds an inn licence.
• The whole building can be owned.
• Its building, fire and inn-licensing compliance can be confirmed, not only the licence itself.
• It can be staffed if that is required in future.
• The licence and business can pass to the next owner. Under the 2023 amendment to the Inns and Hotels Act, operator status can be succeeded through a business transfer with prior approval from the authorities.

Why the whole building? In a condominium unit, the owner cannot change the shared entrance, corridors, lifts, stairs or management office. If future rules require staff on site or separate guest routes, it may be physically impossible to comply. Toshima has already flagged single-room inns. Its licensed lodging facilities grew to 510 by 2026, about 70% more than in FY2024. Complaints rose to 80 in FY2025, about four times the previous year. The ward is considering an on-site staffing requirement for inn-licensed lodging as well. With a whole building, the owner can add a management office, staff, cameras and fire equipment, and change guest circulation. That freedom is itself a source of future value, we think.

An inn licence does not, of course, guarantee that an asset will rise in value. Location, purchase price, building and fire compliance, management costs, the economics of a staffed operation and whether the licence can be succeeded all need to be checked property by property.

That perspective will matter more than ever. It is what we see beginning to form in Tokyo’s hospitality real estate: regulatory scarcity.

Sources: Ministry of Health, Labour and Welfare, amendment of the Inns and Hotels Act (Japanese)↗ · Toshima City, mayor’s address to the 2nd regular ward assembly session of 2026 (Japanese)↗

Sources