Osaka Minpaku Rules 2026: What the End of Special Zone Minpaku and the New Ryokan Ordinance Mean for Foreign Investors

Osaka stopped accepting new special zone minpaku applications on May 29, 2026, and a stricter ryokan ordinance takes effect on October 30, 2026. In buildings where people live, new hotel-license applications now generally require reinforced concrete construction, and staff must be on site while guests are staying, including at existing licensed properties. In our view, Osaka has shifted from a market anyone could enter small to one where the building and the operating setup decide who can compete.

1. The Short Answer

Two rule changes reshape Osaka's short-term rental (STR) market. First, the city closed new applications for tokku minpaku (special zone minpaku: a scheme under Japan's National Strategic Special Zones that allows year-round lodging without a hotel license) on May 29, 2026. Second, the city's amended Hotel Business Act ordinance takes effect on October 30, 2026. After that date, a new license in a building that also contains residences generally requires reinforced concrete (RC) or steel-reinforced concrete (SRC) construction, and staff must be stationed on site whenever guests are staying. The staffing rule also applies to properties that are already licensed.

For investors, this means three things:

• New year-round supply is narrowing. Properties that can still add year-round lodging in Osaka are largely limited to buildings with no residents, or RC/SRC buildings.
• Existing special zone approvals are scarce, but may not transfer. The approval is granted to the operator, not the property, so buying the property alone may not carry the approval with it.
• Running a small hotel-licensed property costs more. The on-site staffing duty raises operating costs structurally, especially for one- or two-room properties.

In our view, the short-term priority is to verify how an approval can be transferred and what enforcement risk a property carries before paying a "scarcity premium" for any special zone property. Over the medium to long term, we think RC buildings with no residents, and buildings with a completion certificate for hotel or ryokan use, will be relatively advantaged in a market where supply struggles to grow. Note that The Room has no operating base in Osaka and does not support properties there.

2. What Changed: Two Rule Changes

Special zone minpaku closed to new applications (May 29, 2026). Osaka City announced on November 28, 2025 that it would stop accepting new special zone minpaku applications on May 29, 2026. Applications to add rooms or floor area closed on the same day. Facilities already approved can keep operating as before. Special zone minpaku is an exception to the Hotel Business Act based on Article 13 of the National Strategic Special Zones Act; in Osaka, the minimum stay is two nights, and each guest room must be at least 25㎡, according to the Cabinet Office and the city's procedural guide.

The scale is large. According to a Kyodo News report carried by Kumamoto Nichinichi Shimbun (September 3, 2026), more than 90% of Japan's special zone minpaku are in Osaka City, and 8,887 facilities had been approved by the end of May 2026. This may be a cumulative figure that includes closed facilities, so it is not necessarily the number operating today.

Amended ryokan ordinance (effective October 30, 2026). The amendment to Osaka City's Hotel Business Act ordinance was passed on September 30, 2026, promulgated on October 2 and takes effect on October 30. After public comment, the city decided not to change the draft. It has three main parts, set out in the city's implementation notice:

• Structural standard (new Article 3(1)(xii)): if a building containing a lodging facility also has residential units, it must be RC or SRC at the time of the license application and at any renovation that increases floor area. The mayor may grant an exception if equivalent sound insulation is demonstrated.
• On-site staffing (new Article 9(1)(xii)): while guests are using the facility, the operator or staff must be stationed there. A management office counts as an on-site location.
• Neighbor notification (Article 12): facilities that must notify neighbors before applying expand from those with total guest-room floor area under 33㎡ to those under 200㎡. Notices must now include noise-prevention measures and emergency procedures such as fire response.

Transitional measures apply only to the structural standard and neighbor notification. Facilities that applied or filed plans before the effective date, and cases that take over an existing licensed facility, follow the old rules, but a later renovation that increases floor area triggers the new structural standard. The staffing duty has no transitional measure and applies to all facilities, including those already licensed. Because this is a Hotel Business Act ordinance, it does not apply as written to special zone minpaku, which sit outside the Hotel Business Act.

3. Why Wooden and Steel Apartment Buildings Were Targeted

Data the city published with the draft (public comment materials) show that wooden buildings accounted for 61.8% and steel-frame buildings for 25.0% of noise complaints about special zone minpaku in fiscal 2024 and 2025 combined, a total of 86.8%.

Figure 1. Noise complaints about special zone minpaku by building structure (FY2024–2025 combined, n=280)

Each ■ ≈ 2%. Source: Osaka City. The 280 complaints in this breakdown are counted on a different basis from the totals in Table 1.

Table 1. Noise and garbage complaints

Source: Osaka City. Number of complaints.

Over the same period, special zone minpaku grew from 6,038 to 8,360 facilities, and hotel-licensed facilities from 1,781 to 1,856.

Table 2. Complaints per 100 facilities (our calculation)

Complaints per 100 facilities, calculated from Osaka City data (e.g. 190 ÷ 6,038 × 100). Special zone minpaku had more complaints not only in total but also per facility, and the rate rose.

The city has also tightened enforcement. In March 2026 it revised its guidelines and selected 2,817 facilities for priority monitoring. These include 1,488 facilities that had not responded, as of the end of January 2026, to an operating survey run in November–December 2025, and 692 detached or row houses in residential areas that meet conditions such as a response time of more than 10 minutes. The city says business suspension orders or revocation of approval are possible if problems are not fixed.

The ordinance amendment is designed to stop the same properties from moving to hotel licenses after the special zone window closed and repeating the same problems. Local media report a surge in consultations about opening hotel-licensed facilities since the window closed.

4. Existing Special Zone Properties: Value and Pitfalls

The value: scarce, and no new supply. Approved special zone facilities can no longer be added, and rooms cannot be added to them. From here, their number can only fall. With the two-night minimum, they remain a scarce year-round lodging category. Because special zone minpaku are outside the hotel ordinance, the staffing duty does not apply to them.

Pitfall 1: the approval belongs to the operator, not the property. Practitioner commentary explains that special zone approval is granted to the operator (the applicant), and that a change of operator in principle requires a new approval. On the city's special zone minpaku page, minor change notifications (filed within 10 days) cover items such as a change in the operator's name or address. The same section lists "changing the approved operator itself" as a procedure that cannot be done online. That suggests some counter procedure may exist, but whether it can still be used after the new-application window closed cannot be determined from the city's page or guide. We also found no clear official statement on succession, inheritance or mergers.

Before the window closed, the commentary considered the safest route to be a new operator applying at the same time as the property sale. That route is now closed. In our view, the only reliable way to keep an approval may now be to buy the company that holds it (changing shareholders and directors), which brings risks such as inheriting debts and guarantees and changing what is reported to the authorities. Whether the operator can be changed is a question to put to the Osaka City Public Health Office before you buy.

Pitfall 2: is the property under priority monitoring? Buying a monitored facility means taking on the risk of administrative action. Before purchase, ask the seller about:

• the name on the approval certificate and, if you are buying the company, its debts and contracts;
• whether it responded to the operating survey, whether it is under priority monitoring, and whether it has received guidance;
• its complaint history, and whether staff can reach the property within roughly 10 minutes.

Pitfall 3: the fallback to a hotel license has narrowed. The exit plan of "if needed, we can switch to a hotel license" needs rethinking. For a wooden or steel apartment building with residents, a hotel license applied for on or after October 30, 2026 generally requires RC or SRC. If special zone rules tighten further, or an approval is lost, such a property may be left with only minpaku under the Housing Accommodation Business Act (capped at 180 days a year) or ordinary rental (our view).

5. Starting Fresh with a Hotel License: What to Decide

The building: does anyone live there? The structural standard applies only when the building contains residential units. According to practitioner commentary, wooden detached houses and whole apartment buildings with no residents can still apply as before.

Wooden and steel buildings can also qualify for an exception. At the draft stage, the city listed showing sound insulation equivalent to RC/SRC through test results from an inspection body, or showing compliance with "hotel or ryokan" use under the Building Standards Act through a completion certificate (kensa zumisho, issued after a building passes its final inspection by a building official or designated inspection body, per MLIT). The detailed requirements will be set in the city's implementing guidelines, which we have not yet seen in final form. In our view, proving sound insulation after the fact in an apartment building with residents will often be impractical.

Operations: staffing costs decide the P&L. The staffing rule requires staff in the facility or a management office while guests stay. Commentary notes that ICT tools such as self check-in are welcome for efficiency but do not replace on-site staff. City materials also state that a facility without a front desk needs a management office within 1,000 m.

Estimate: cost of 24-hour staffing (our calculation; hypothetical figures)

• Assumptions: one person on site 24 hours on days with guests; 40 hours per person per week; labor cost of ¥300,000 per person per month.
• Calculation: 24 hours × 7 days = 168 hours per week ÷ 40 hours ≈ 4.2 people → 4.2 × ¥300,000 ≈ ¥1.26 million per month.
• How many facilities one management office may cover depends on the guidelines and is not yet confirmed. If one office covers 10 rooms, that is about ¥126,000 per room per month; for a single room, the full ¥1.26 million.

The staffing duty weighs most on small, scattered facilities. Commentators expect operating companies' costs to rise, with weaker local operators withdrawing or consolidating.

Neighbor notification: almost every small conversion is covered. Under national rules, a change of use to lodging affecting 200㎡ or less of floor area does not require a building-permit review (MLIT notice). The city says it extended neighbor notification to facilities under 200㎡ precisely to cover homes converted without that review. Notification does not require neighbors' consent, but local opposition becomes visible at the planning stage. In our view, plan your funding on the assumption that the time to opening will be longer.

6. How Supply Will Move (Our View)

Reported figures and our estimates are separated below.

• Reported: 8,887 special zone facilities approved by the end of May 2026; 1,856 hotel-licensed facilities in FY2025. In an operating survey of 7,312 facilities approved as of the end of October 2025, 312 of the 5,824 respondents had already closed.
• Our estimate: with no new approvals and stronger monitoring, we expect the number of special zone facilities to decline every year.

Figure 2. Special zone minpaku facilities after three years (our estimate)

Each ■ ≈ 500 facilities. Formula: 8,887 × (1 − annual decline)^years. The 5% and 10% decline rates are our assumptions, not published data, and the starting point may include closed facilities.

Meanwhile, new hotel-licensed supply will be limited to buildings with no residents, RC/SRC buildings and buildings approved for hotel or ryokan use. In our view, supply of small lodging facilities in Osaka will grow much more slowly for at least several years. If demand holds while supply tightens, qualifying existing facilities should benefit in occupancy and rates. We have not, however, verified Osaka's demand outlook with our own data in this article.

7. Impact by Price Tier

Table 3. Impact by price tier (our view)

8. Defense and Offense: What Investors Should Decide

Defense (current owners)

• Special zone minpaku: organize who holds the approval and how the company is structured, so a future sale can be done as a company sale if needed (our view), and check that the property meets the monitoring criteria.
• Hotel-licensed facilities: the staffing duty applies from October 30. Check your operator's setup and whether contract fees will change.

Offense (opportunities created by shrinking supply)

• RC/SRC buildings with no residents: least affected by the new rules, and increasingly scarce in a tighter market.
• Buildings with a completion certificate for hotel or ryokan use: a route to the structural exception.
• Consolidation by operators with scale: if small facilities cannot bear staffing costs, opportunities to acquire them in groups will appear.

Tax and legal treatment, particularly of buying a company that holds an approval, should be confirmed with a Japanese lawyer, tax accountant or administrative scrivener before any transaction.

Our recommended scale and exit (our view)

• Short term (up to 1 year): pay a scarcity premium for a special zone property only once you have confirmed how the approval can be transferred (including the city's answer) and its monitoring risk. Avoid purchases that depend on converting a wooden or steel apartment building to a hotel license.
• Medium to long term (3–5 years): investments built around whole RC/SRC buildings suit investors who can set up on-site staffing, either in-house or with a local operator. The exit we would plan for is a sale to a hotel operator or fund as a licensed RC lodging facility.

9. Which Investors Osaka Suits

Osaka suits investors who:

• have a local operating partner and enough scale to share on-site staff across several facilities;
• have the budget for whole RC/SRC buildings or buildings approved for hotel or ryokan use;
• can spend the time and money on legal due diligence when acquiring a company that holds a special zone approval.

A family office from Singapore or Hong Kong that already has a partner in Osaka, for example, could target consolidation opportunities. For investors who want to run one or two rooms remotely, Osaka after October 2026 is a difficult market (our view).

The Room has no operating base in Osaka and does not support acquisitions or operations there. We operate in Hakone, the Fuji Five Lakes area and Tokyo, where we run whole-house rentals year-round under a Hotel Business Act license. For how the two licensing regimes differ, see Hotel Business Act vs. Housing Accommodation Business Act, and for how Tokyo is tightening, see Shinjuku Minpaku Rules 2027 and Japan's "Zero-Day" Minpaku Rules.

10. What This Means for Investors

Osaka's STR market has changed from one anyone could enter small to one where the building and the operating setup decide who can compete. Existing special zone approvals are scarce, but they have a weakness: the approval may not follow the property. If you are starting fresh, the conditions are an RC building with no residents and an operating setup that can keep staff on site.

The Room specializes in operating high-rate properties with serious investment in the building and the guest experience. If you are considering a year-round, hotel-licensed property in Hakone, the Fuji Five Lakes area or Tokyo, please get in touch.