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Economy

Japan ruling party decides on 180-day cap for home sharing

New bill will pave way for more Airbnb-style rentals

Short-term rentals of rooms and entire homes, such as through websites like Airbnb, has been a topic of much debate lately in Japan.

TOKYO -- Private citizens in Japan will be allowed to rent out rooms or entire homes to travelers for up to 180 days a year, according to a draft bill agreed on Wednesday by the ruling Liberal Democratic Party, an attempt to promote tourism while showing consideration for party supporters in the hotel industry.

Members of relevant LDP committees met that day for a third deliberation on the proposed bill. The session lasted about two hours. After getting the green light from the party's General Council and Policy Research Council Board, the draft is expected to be approved by the cabinet by March 10 and submitted to the Diet.

The key debate was on the number of days per year that home sharing, a practice known here as minpaku, should be allowed. Real estate developers and rental property operators hope to enter the space themselves and wanted an extremely high ceiling, if any. But veteran LDP lawmakers supported by the hotel industry opposed this.

As a compromise, Tokyo is looking to allow prefectural and select city governments to lower the 180-day cap if home sharing leads to excessive noise or other negative fallout on the local community.

But the central government will ensure that municipalities do not stem the growth of home sharing through excessive regulation. It has made clear through various meetings that any local ordinance that prohibits home sharing altogether will not be acceptable. It has also stressed that local governments will only be able to reduce the cap in specific areas, not across their entire domain.

Initially, the national government had planned to create guidelines on what constitutes a negative impact on local communities separately from the legislation itself. But lawmakers who support greater home sharing argued that such guidelines would have no legal basis and could expand indefinitely. Tokyo is now looking to issue a ministerial order to set clear and strict parameters for when local governments can lower the 180-day limit.

The draft bill also leaves room for a revision three years after it takes effect. The initial plan was to have that be five years, but it was shortened as a courtesy to the hotel industry, who LDP heavyweights helped win over. But many issues still must be ironed out to prevent localities from abusing their ability to tighten the cap on home sharing.

A government committee on regulatory reform in May 2016 had requested that Prime Minister Shinzo Abe lift all restrictions on home sharing. It requested that necessary legislation be submitted by this March in a reform plan greenlighted by the cabinet in June.

But the debate within government and the LDP dragged on as lawmakers debated how much home sharing should be allowed, given the interests of the hotel industry. No bill on the topic was submitted to the extraordinary Diet session last fall.

(Nikkei)

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