The government considers such "externalities" from the perspective of the dwelling itself, but moreover from the perspective of the user and the operator. As such it follows that the government should have a say in publicly available housing.The regulations you seek will be found in a few areas. One in terms of what requirements a structure must meet prior to being able to house guests as a hotel or short term residence. These include fire dept. regs and others. A veritable plethora of regs. You are most welcome to dig through at your leisure. Google will be your friend in that search. It may behoove you to start with a search based on “What do I need to comply with in order to register a dwelling as a hotel or short term residence?” This will give you a good idea of the scope of the hoops through which all hotels and serviced apartment operators have jumped to operate a business.
For an individual to have the right to skip all of that because they own a piece of property is laughable. Japan is far better regulated than that. Being skeptical is one thing and I think that is likely a first reaction for many of us with newly imposed regs in any area of our lives. That said, a little digging and learning about the actual process to become a legal hotel or serviced apartment will show you very quickly it has nothing to do with any sort of price discrimination nor to stop competition. It in fact has everything to do with standards being maintained for very good reasons.
I actually know a little bit about it since I had the misfortune of having to manage a $350 million mixed use development project that included lodging. That's why having spent countless hours with engineers, consultants, architects and builders on this subject, I'm skeptical that's there much in there beyond the normal fire and earthquake regs that provides any additional safety benefit. If you look objectively at health safety risks in Japan, I think besides the fire/earthquake regs the only thing for which is there is a reasonable actuarial argument is insect screens in the windows.... or maybe asteroid shields.
Others may have a different opinion, but IMHO Japan is way over-regulated and this (together with the confiscatory tax rates) is the reason Japan is in an economic death spiral. Had Japan de-regulated and reduced taxes in the late 80's per the recommendations of the Maekawa report, the economy would be twice the size it currently is and the health/safety (and other) benefits accruing to doubling everyone's income would vastly outweigh any possible benefit derived from the regulations. Just saying
..... others may have a different opinion.