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Sharing Economy

Japanese home-sharing market tangled up in red tape

Key tourist spots like Kyoto have approved half or less of applicants so far

Many local governments in Japan impose additional restrictions on short-term home rentals, such as requiring a building manager to be available to guests at all times.

TOKYO -- A month after Japan legalized short-term home rentals through Airbnb and similar platforms, local governments remain slow to grant would-be hosts the needed approval.

Thirteen of 100 localities allowing home-sharing had accepted around half or fewer of applicants as of July 6, according to the Japan Tourism Agency.

These include such major tourist destinations as Kyoto. Okinawa Prefecture's Naha had accepted only 7% of applicants, while Tokyo's Chuo Ward had not given a single approval.

The new law took effect on June 15, legalizing a market that long operated in a gray area. But hosts must register their properties with the local government and can rent out rooms for just 180 days a year.

Many of the localities falling behind on applications impose additional restrictions of their own, such as on where the properties can be located. Kyoto requires that a building manager be 10 minutes away at all times unless the host lives in the same house. These make applications more complex, resulting in more errors and longer processing times.

Nationwide, 73% of 5,397 total applications had been accepted.

The new law also prohibits platforms from listing unregistered lodgings. Airbnb now displays hosts' registration numbers and other proof that they are operating legally on its website. It is believed to have about 10,000 to 20,000 listings in Japan, down from 62,000 in the spring. Many hosts have raised rates amid shrinking competition.

Still, only about 25% of Airbnb listings in Japan were registered under the new law, according to data collected by Nikkei and research company Keywalker earlier this month. Roughly 65% were registered as inns or hotels. The rest included "monthly" rentals that could actually be booked nightly, as well as listings with fake or no registration numbers. Airbnb is working to delete illegal listings and ban bad hosts from the platform.

The new law sets tougher penalties for illegal rentals. Kyoto has tripled its budget for related activities on the year and added six members to its response team.

Meanwhile, the Japan Tourism Agency is working to make the registration system easier on hosts. It urged local governments last Monday to simplify applications. The central government is counting on home-sharing to alleviate the shortage of hotel rooms for foreign tourists and to prevent properties from being abandoned.

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