Osaka City to Halt New Short-Term Rental Permits Amid Complaints and Visa Exploitation Concerns
Osaka Moves to Suspend New Short-Term Rental Approvals in 2026
Osaka, Japan — In a significant shift for Japan’s tourism and real estate sectors, Osaka City announced it will suspend new applications for special zone minpaku — short-term rental operations allowed under the national strategic special zone regulations — starting May 30, 2026. The decision follows a surge of public frustration over neighborhood disruptions, rising housing prices, and concerns over how foreign nationals are using the system to obtain business management visas.
A cross-departmental committee established by Osaka City in July concluded after months of review that tighter regulation was necessary. The recommendation, made official at the end of September, will now move to Japan’s national strategic special zone conference for formal consideration. Final authorization must come from the prime minister’s certification, anticipated following policy discussions scheduled next month.
Resident Frustration Over Noise and Waste
The minpaku system was initially introduced to stimulate Japan’s tourism industry and urban revitalization, particularly in metropolitan centers like Osaka. However, in popular residential districts such as Naniwa Ward and the Shiongrass district, the growth of short-term rentals has led to widespread complaints. Residents have voiced grievances over loud parties, improper waste disposal, and transient visitors who treat apartment complexes like hotels.
City officials have acknowledged receiving hundreds of reports related to noise disturbances and illegal renovations for rental purposes. Neighborhood associations in areas near Namba Station, Tennoji, and Shin-Osaka have also expressed concerns that the integrity of long-standing communities is eroding.
“People are tired of not knowing who their neighbors are from one week to the next,” said an Osaka City housing official in a recent town hall meeting. “We’re hearing from elderly residents who no longer feel safe.”
Visa Loopholes and Rising Suspicion
One of the most controversial aspects of Osaka’s minpaku boom involves the alleged misuse of Japan’s business management visa system. Under existing rules, foreign applicants can obtain this visa by establishing a company in Japan with at least 5 million yen in capital and maintaining a local business address.
According to reports, some Chinese nationals have exploited the program by creating shell companies and attaching mailboxes bearing false business signage outside residential buildings to fulfill the requirement for a local office. This method effectively allows them to remain in Japan long-term, circumventing the restrictions applied to conventional tourist or temporary stay visas.
Immigration experts and local officials have expressed concern that this pattern poses regulatory and economic risks. It not only undermines the intent of Japan’s immigration policy but also puts pressure on local housing markets, driving up property values and rents in districts where investors purchase multiple units for quasi-commercial rental activity.
Historical Context of Japan’s Minpaku Regulations
Japan’s approach to short-term rentals has evolved rapidly over the last decade. In 2018, the Private Lodging Business Act (Minpaku Law) came into effect, allowing private citizens to rent their homes for up to 180 days per year, provided they register with local authorities and meet specific safety and hygiene standards.
However, Osaka — like Tokyo’s Ota Ward and Fukuoka City — took advantage of the special economic zone legislation enacted under the National Strategic Special Zones Act of 2013. This framework allowed them to issue more flexible minpaku permits designed to encourage tourism-related entrepreneurship. Operators under this program are exempt from some of the stricter conditions of the national Minpaku Law, including the 180-day limitation.
These looser rules attracted investors and foreign entrepreneurs eager to enter the booming hospitality sector without the high costs of hotel operation or traditional real estate investment. According to city data, Osaka granted over 3,500 special zone minpaku permits between 2016 and 2023, primarily concentrated in central wards such as Kita, Chuo, and Naniwa.
Tourism Boom and its Consequences
Osaka’s dynamic tourism growth has mirrored Japan’s wider surge in inbound travel across the 2010s and early 2020s. The city became one of Asia’s most popular urban destinations, drawing visitors for its food culture, landmarks such as Osaka Castle and Dotonbori, and its proximity to Kyoto and Nara.
Official data from the Osaka Convention and Tourism Bureau shows that foreign overnight stays in the city exceeded 25 million in 2019 before the pandemic brought travel to a halt. By 2024, inbound tourism had returned to approximately 90% of pre-pandemic levels, fueled by pent-up travel demand and the yen’s historic depreciation.
But this revival has also renewed strain on infrastructure and housing. Apartments once rented to local families have increasingly been converted into short-term accommodations, setting off bidding wars that drove average rents in downtown Osaka up by 18% between 2020 and 2025, according to real estate analytics firm AtHome Research.
Comparing Regional Approaches in Japan
While Osaka is now preparing to suspend new minpaku permits, other regions have begun imposing stricter local rules or caps on the practice.
In Kyoto, home to some of Japan’s oldest neighborhoods, regulations were tightened in 2019 to restrict short-term rentals to specific tourist zones and require host presence on-site. Those controls enabled the city to significantly reduce the number of illegal minpaku, though complaints continue near popular areas like Gion.
In Tokyo’s Shinjuku and Shibuya wards, authorities have implemented zoning limitations that bar short-term rentals in most residential-only neighborhoods. Meanwhile, Okinawa Prefecture has leaned into the model, promoting short-term rentals in remote island communities as a way to attract tourism revenue and compensate for population decline.
Osaka’s decision therefore positions it somewhere between Kyoto’s preservationist stance and Okinawa’s economic openness. Observers believe Osaka’s temporary pause may serve as a benchmark for other municipalities reconsidering their balance between tourism promotion and community welfare.
Economic Impact and Property Market Effects
The immediate effect of the moratorium could be a cooling in Osaka’s real estate investment segment, particularly for properties formerly marketed as Airbnb-compatible. Market analysts predict a short-term slowdown in new construction targeting overseas buyers, many of whom have treated Osaka as a gateway for rental-based revenue streams.
While the tourism industry fears the move may reduce accommodation capacity ahead of major events, such as Expo 2025 Osaka, Kansai, others argue that stabilizing the housing market is vital to maintaining quality of life for residents. The city government’s stated intent is not to dismantle the existing system but to prevent further uncontrolled growth until revised compliance mechanisms are introduced.
Hotels and registered lodging facilities — which have suffered from the proliferation of unregulated rentals — are expected to benefit from the moratorium. Industry representatives say they welcome the decision as a step toward fair competition, particularly as Osaka prepares for an expected 30 million visitors during the Expo year.
Public and Industry Reactions
Reaction among Osaka residents has been largely supportive. Community boards in Naniwa and Minato wards have praised the city for listening to public concerns, noting that previous complaint-driven investigations were too fragmented to produce lasting results.
Some small-scale operators, however, worry that the policy could create uncertainty and discourage legitimate enterprise. A licensed minpaku operator in Chuo Ward described the move as “necessary but heavy-handed,” arguing that rogue agents should be targeted rather than the entire industry halted.
Travel agencies and tourism leaders remain cautiously optimistic. They emphasize that the moratorium allows existing rentals to continue operating and that Osaka still plans to promote responsible tourism through transparent regulatory channels.
Outlook for Osaka’s Tourism and Housing Policy
Osaka’s planned suspension of new short-term rental permits underscores the city’s shifting priorities in navigating the intersection of economic growth, global mobility, and residential harmony. It reflects a maturing phase of Japan’s post-pandemic tourism recovery — one where local governments are not only seeking visitor revenue but also safeguarding community stability.
Discussions at next month’s national strategic special zone conference will be crucial in determining how Osaka adjusts its policy framework. Experts suggest that future reforms may include more rigorous background checks on foreign corporate registrants, tighter building compliance requirements, and digital monitoring of registered rental units.
In the long term, Osaka’s experience may help shape a new national model for managing short-term rentals across Japan. The challenge remains finding equilibrium between the city’s role as an international tourism hub and the daily lives of its residents.