Further on from our April Home Truths column about temporary housing for evacuees in the Tohoku region, local governments in the area are also facing another related problem: an oversupply of permanent public housing built expressly for victims of the Great East Japan Earthquake. These are apartment buildings, not unlike public housing complexes erected in other parts of Japan, that accept people who were left homeless by the disaster and were either already living in public housing destroyed in the disaster or who were living in their own homes and, for whatever reason, do not plan to rebuild those homes due to financial limitations or age.
An article in the March 15 Asahi Shimbun describes three such buildings that are now completed in Kesennuma–two 6-story structures and one that’s 10 stories, altogether comprising 165 units. People started moving in in Jan. 2015, and at present more than half the residents are over 65. As the 51-year-old community leader of the complex told the newspaper, already ten residents have died in the past two years, among them three people who were living alone and whose bodies weren’t discovered for a few days. The leader is concerned because, while the vacancy rate for this particular complex is low right now, Kesennuma eventually will have 2,087 units of public disaster housing, to be completed this May, and it seems to be too much. Given that most of the victims who move in are elderly, the local government has now estimated that by 2025, 27 percent of the residents will have died or moved into nursing homes, and by 2035 51 percent will be gone. This is only to be expected, but there doesn’t seem to be anyone to replace them. The city has said that when vacancies arise it will solicit low income families to apply for units, but projections are that there won’t be many of those since so many young people moved away from the area after the disaster. As it stands, Kesennuma will have five times as many low-income public housing units as they had before the earthquake, but now they have much fewer residents overall and few prospects for any influx. The population now stands at about 64,000, or 13 percent less than a year ago. The trend is that after graduating high school, young people are leaving the city. Read More
Here’s this month’s housing column in the newly designed Japan Times. This one’s about emergency housing, which we’ve talked about before but we never really got into the legal aspects, which are quite interesting.
We’ve already talked about the sublease racket. The term has a special meaning in Japan that’s related to a specific real estate scheme designed to sell apartment buildings to people with extra money. Construction companies build small apartment buildings on unused land for the owners of that land and then manage the property for them through a sublease arrangement that requires them to pay a guaranteed “rent” every month. The logic is simple. The property owners have to pay higher taxes on land that is empty and so they build an apartment building for purposes of reducing those taxes and providing income. The construction company then does all the work of finding tenants and managing the property.
As we’ve mentioned in past posts about this scheme, it heavily favors the construction company, which gets out of its obligation for guaranteed payments to the landlord through various small print loopholes. The construction company, which usually has a real estate subsidiary, is only really interested in building, and understands that as Japan’s population declines it is going to be more and more difficult to find enough tenants to make even small apartment buildings profitable. Consequently, they make sure there is something in the management contract that allows them to get out of the deal if things go south, and invariably they do. Read More