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Converting a House into an Accommodation Facility vol.1

Some readers may be considering purchasing an atmospheric old Japanese house and operating an accommodation business in Japan. In this article, I will explain the rules and key points to be aware of when renovating a residential building into an accommodation facility in Japan.

A futon laid out on tatami mats in a traditional Japanese-style room. In some accommodations, the futon is prepared in advance, while in many ryokan it is not set up initially; instead, staff members come to lay out the futon after dinner. By contrast, in inexpensive guesthouses, guests are often expected to set up the futon themselves and to fold and put it away at check-out. Traditionally in Japan, futons are laid out before sleeping and folded and stored away after waking up, allowing the same room to be used for meals and other activities by placing a low Japanese table in the space where the futon had been. This is also why guest rooms with futons generally require less floor area than rooms with fixed beds: the futon can be put away when not in use, making the room feel more spacious.

First, accommodation facilities in Japan are classified into several categories depending on their scale and business model, and the applicable rules differ accordingly. Although details will be explained later, these can broadly be divided into two types: accommodation facilities defined under the Hotel Business Act and treated as “special buildings” such as hotels under the Building Standards Act, and accommodation services defined under the Residential Accommodation Business Act, which are treated as residential buildings under the Building Standards Act. Operating rooms or buildings as accommodation facilities without registering under either of these systems is illegal.

In addition, buildings that violate the Building Standards Act, or buildings located in areas where accommodation facilities are restricted―such as exclusively industrial zones or certain residential-only zones―may not be eligible to be used as accommodation facilities. For this reason, it is essential to confirm these conditions before purchasing a property.

Permits and approvals related to accommodation facilities are handled by local government departments, and rules may vary by region or be updated over time. Therefore, the information presented here should be treated as general guidance only. You should always consult the relevant local authorities in advance to confirm the specific rules that apply in the area where you plan to open an accommodation facility.

1. Hotel and Ryokan Operations

These are accommodation facilities defined under the Hotel Business Act. They are overseen by prefectural or municipal public health centers, and permission from the prefectural governor is required.

This category includes general accommodation facilities that do not fall under more limited categories such as simple lodging facilities, private lodging (minpaku), or boarding houses, which are explained later. “Hotels” refer to Western-style accommodations that use beds, while “ryokan” refers to traditional Japanese-style accommodations where guests sleep on bedding such as futon mattresses laid out on tatami mats.

Each guest room must have a minimum floor area of 9 square meters if beds are used, or 7 square meters in the case of tatami rooms without beds. A front desk, or an approved alternative arrangement, must also be provided to handle guest reception. (The acceptability of alternative front desk arrangements varies significantly by municipality and should be confirmed in advance.)

In addition, detailed requirements apply to bathing facilities based on the number of guests, as well as to ventilation, natural lighting, artificial lighting, drainage, and fire safety equipment. For this reason, unless you have specialized knowledge of accommodation operations, it is essential to work with professionals such as architects who can prepare renovation plans and instruct contractors, and administrative scriveners who can handle applications and procedures with government offices.

2. Simple Lodging Facilities (Kan i-shukusho)

These facilities are also defined under the Hotel Business Act and are overseen by prefectural or municipal public health centers, requiring permission from the prefectural governor.

Many guesthouses, where multiple guests share accommodation spaces, fall under this category. Compared to hotels and ryokan, some facility requirements are relaxed, such as the absence of a mandatory front desk.

The general standards related to building renovation for simple lodging facilities are as follows: If the building contains other business uses, such as restaurants or shops, or residential areas for the owner or staff, these must be clearly separated from the accommodation area.
As a general rule, areas used by guests and residents should be separated. In some municipalities, owners or staff who live on-site are not permitted to share kitchens, bathrooms, or similar facilities with guests.

The total floor area of guest rooms must be at least 33 square meters. However, if the facility accommodates fewer than 10 guests, a minimum of 3.3 square meters per guest is sufficient.
More than half of the guest rooms must be designed to accommodate two or more people.
The minimum floor area per guest is 3 square meters when using beds, 2.5 square meters when using futons, and 2.25 square meters when using bunk beds with two or more tiers. Adequate ventilation, natural lighting, artificial lighting, moisture control, and drainage must be provided. Openings such as windows must provide a lighting area of at least one-eighth of the guest room floor area. Windows must be lockable.

Guest rooms must be separated from other rooms or facilities by fixed walls or doors; temporary partitions do not qualify. Measures must be in place to block visibility into guest rooms from outside, such as curtains on windows, to ensure privacy. If no front desk is installed, locks to control entry, equipment to monitor access (such as security cameras), and communication devices such as telephones must be provided. Necessary fire-resistance measures and fire safety equipment must be installed. The specific requirements vary depending on building size, but because most simple lodging facilities are relatively small, the standards are often less strict than those for hotels or ryokan. Details should be confirmed with the relevant public health center and fire department.

3. Boarding Houses (Geshuku)

Boarding houses are long-stay accommodation facilities defined under the Hotel Business Act, intended for guests staying for extended periods, typically on a monthly basis or longer. They are overseen by prefectural or municipal public health centers and require permission from the prefectural governor.

Although boarding houses are often associated with student housing, many also cater to business travelers staying for one to several months. If you are simply renting out rooms under a lease agreement, such as in rental housing or a share house, the building standards required are generally less strict. However, if meals are provided within the accommodation facility, permission to operate as a boarding house is required.

For example, if a building has a restaurant on the ground floor and rental residences on the upper floors, and the restaurant and residences are completely separated, the residential units are not considered boarding houses and may be rented out as ordinary housing. Dormitories operated by schools or companies are often treated as exempt from the Hotel Business Act even if meals are provided, but depending on their operational structure, they may be classified as simple lodging facilities.

Unlike rental housing with a fixed group of residents, boarding houses are treated as hotel-type buildings under the Building Standards Act, based on the assumption that an unspecified number of guests will come and go. As a result, building and fire safety standards similar to those for hotels, ryokan, or simple lodging facilities are required, depending on the size of the building.

4. Residential Accommodation Business (Minpaku)

This is an accommodation service operated in residential buildings under the Residential Accommodation Business Act. To operate such a business, it is necessary to submit a notification through the Minpaku Registration System to the prefectural governor with jurisdiction over the property’s location and obtain approval. Compared to accommodation facilities that require formal permission from the prefectural governor, the application process is relatively straightforward.

Because the building is treated as a residence rather than a special building such as a hotel under the Building Standards Act, the required standards are more relaxed. However, operation is limited to a maximum of 180 days per year, and the property must qualify as a “residence,” such as a home where people live, a property actively being offered for tenants, or a second home, vacation house, or secondary residence that is in use. These restrictions are intended to demonstrate that the property is fundamentally a residence providing accommodation services only on a limited basis.

Residential accommodation properties must meet the following equipment requirements.
The residence must contain a kitchen, bathroom, toilet, and washbasin. These four facilities do not need to be located within a single building; if they are distributed across multiple buildings on the same site, it is possible to register all of them together as one residence. For example, in traditional Japanese houses, bathrooms or toilets may be located in small detached structures, or there may be separate guest buildings. In such cases, all buildings can be collectively registered as a single residence.

Guest rooms must provide at least 3.3 square meters per guest, excluding shared spaces that guests cannot exclusively occupy, as well as closets or alcoves such as tokonoma. Depending on the structure and scale of the house, emergency lighting, evacuation route signage, fire prevention measures, and fire safety equipment must be installed to ensure safety. Further details can be found on the official Minpaku website.

5. Special Zone Private Lodging (Tokku Minpaku)

This is a special accommodation system permitted only in designated areas under the National Strategic Special Zones Act. Areas where this system is currently implemented include Ota Ward in Tokyo, Osaka City in Osaka Prefecture, Chiba City in Chiba Prefecture, Niigata City in Niigata Prefecture, Fukuoka City in Fukuoka Prefecture, and some more.

Compared to accommodation facilities regulated under the Hotel Business Act, procedures are simplified and facility standards are less strict. However, unlike residential accommodation businesses, a change of building use may be required. There is no annual limit on the number of operating days, but guests are required to stay for a minimum of two nights.

Additional requirements, such as a minimum floor area of 25 square meters, also apply. These conditions vary slightly by area, and because the zones where this system is permitted are limited, a detailed explanation is omitted here.

First, you should confirm whether the property you are considering is located within a designated special zone. If it is, I recommend visiting the local city office to consult with officials and confirm the detailed requirements.

When operating an accommodation facility in Japan, one of these five business models must be chosen. The most suitable option depends on the scale of the property, the intended business model, and your lifestyle.

For example, if you plan to operate accommodation as your primary source of income, a business model regulated under the Hotel Business Act will likely be necessary. On the other hand, if you wish to generate supplemental income by allowing guests to stay in part of the house you live in, a residential accommodation business may be more appropriate.

In the next article, I will explain key points to consider when renovating a traditional Japanese house into an accommodation facility.