Osaka city government will stop accepting new applications for its special-zone private lodging program after May 29, 2026 [3].

This decision marks a shift in how the city manages its tourism infrastructure. By capping the growth of these specific short-term rentals, officials aim to stabilize the local housing market and reduce the friction between international tourists and permanent residents.

Mayor Hiroyuki Yokoyama and city officials are moving to curb the over-concentration of these lodgings [1]. The city has become the primary hub for this specific regulatory framework, with approximately 90% of Japan's special-zone private lodging located within Osaka City [1].

Local authorities said the move is necessary to address growing resident complaints and regulatory concerns [2]. The rapid proliferation of these rentals has led to issues with noise, trash, and security in residential neighborhoods. To manage these risks, Osaka City has already designated 2,817 facilities as priority monitoring targets [2].

Beyond resident quality of life, the city is concerned about economic stability. Officials said the restriction is intended to prevent a market bubble in the private lodging sector [2]. By limiting new entries, the city hopes to avoid a scenario where speculative investment outweighs actual demand.

The special-zone program allowed for more flexible operating rules than the standard national laws governing private lodging. While existing operators may continue their activities, the freeze on new applications prevents the further expansion of this specific business model across the city's wards.

“Approximately 90% of Japan's special-zone private lodging is located in Osaka City”

Osaka's decision reflects a growing tension between the economic benefits of tourism and the sustainability of urban living. By restricting the special-zone program, the city is prioritizing residential stability and regulatory control over unrestricted growth in the short-term rental market, potentially signaling a broader shift toward more sustainable tourism management in Japanese urban centers.