Osaka City has ended the acceptance of new applications for special zone vacation rentals as of May 30 [2].
The move comes as the city struggles to balance a booming tourism industry with the quality of life for local residents. Because Osaka represents 94% [2] of all special zone vacation rentals in Japan, the city has become the primary flashpoint for conflicts between short-term guests and permanent residents.
On the final day of registration, long queues formed at city offices as operators rushed to submit paperwork. More than 1,000 last-minute applications were filed within a single month [1]. One applicant said, "I made it just in time" [1].
City officials cited a critical increase in neighborhood disturbances to justify the suspension. Residents, particularly in the Higashinari ward, reported frequent issues with noise, improper trash disposal, and the illegal use of fireworks [1], [3]. A city representative said that the number of complaints in the 2025 fiscal year reached a record high [3]. While some reports estimate complaints at approximately 400 [4], the city maintains that the volume of grievances necessitated a change in policy.
There are currently more than 8,000 special zone vacation rental facilities operating within Osaka City [3]. The city's decision to pause new entries reflects a growing trend of municipal pushback across the country. Seven municipalities have already expressed their intent to withdraw from the special zone system entirely [2].
An Osaka City spokesperson said the city intends to suspend new applications for the time being [2]. Mayor Hideyuki Yokoyama and a dedicated project team are now reviewing how to strengthen regulations to prevent further residential disruption.
“"I made it just in time"”
The suspension of new licenses signals a shift in Osaka's tourism strategy from rapid expansion to sustainable management. By halting the growth of the special zone system—which allows for more flexible operating rules than standard hotel laws—the city is attempting to mitigate the 'overtourism' effect on residential neighborhoods. This move likely foreshadows stricter zoning laws and a potential reduction in the total number of legal short-term rentals in the city.
