In Japan, any property you buy will likely not increase in value over time. Structures themselves, whether houses or condominiums, lose value as a matter of course because that’s the way the government and the housing industry planned it. And since the end of the bubble economy of the late 80s, even land prices have dropped and continue to do so, thus contributing to the cycle of deflation that keeps the economy in the doldrums.
The only exception to this trend is Tokyo, and the media has lately been reporting on how healthy the condo market is in the capital, but according to AERA it’s only specific areas of Tokyo, and not necessarily the ones you might expect. For instance, the “3A area” of Aoyama, Azabu and Akasaka–expensive locations favored by well-to-do expats–has been losing value steadily since the so-called Lehman Shock because of decreasing demand for rental property. Read More
Today we wrote a letter to the Japan Times about an article they printed last week about rentals for foreigners. Here it is:
In the May 15 article “Housing glut opens door to foreign tenants” Takahide Ezoe of the Shinjuku Japanese Language Institute states that “Japanese…know that you don’t usually get the amount of deposit back” when they move out of a rental property, and thus potential foreign renters have to be made to understand this point since, According to Ezoe, “to foreigners, a deposit is something that will be returned fully.”
In principle, the purpose of a security deposit, or shikikin, is to provide reserve funds in the event that the tenant is delinquent with his or her rent. However, many landlords consider it money that can be used after the tenant moves out for repairs and maintenance. In most developed countries, landlords are legally responsible for normal wear-and-tear on a rental property, not the tenant. Foreigners who have not caused any unusual damage to their residences should by all rights expect to receive their security deposits in full when they leave, as should Japanese tenants. In fact, many Japanese have sued landlords to recover their security deposits and won.
As the article points out, potential renters should read their contracts. If they don’t understand the security deposit issue then they should have it clarified by the landlord or agent. When they move out and do not receive their deposits back, they should confront the landlord and demand an explanation. Many landlords use security deposits, key money (reikin), and contract renewal fees as tools to gouge tenants, whose rights in these matters are not clearly defined by Japanese law. To call these conditions “customs,” which is what realtors tend to do, is to obfuscate their questionable legality. They are certainly unethical.
In an otherwise unexceptional news item about local governments fixing up abandoned properties in order to rent them out cheap and thus attract newcomers to their dwindling communities, this little nugget of economic foreboding was revealed. Although it’s no mystery that vacant homes are on the rise in Japan, the number was specified in a new survey conducted by the Ministry of Internal Affairs and Communications. In 2009, the ministry found, 7.56 million residences in Japan were unoccupied, accounting for 13 percent of all houses and apartments in Japan. That’s a 15 percent increase since 2004. In some prefectures, the vacancy rate is as much as 20 percent, and the ministry predicts that the number will only rise, which you don’t need to be a Nostradamus to figure out. The population is dropping and there’s just no market for old homes anyway because the government only cares about building new homes and condominiums.
Considering how expensive housing is in Japan, foreigners just off the boat tend to be surprised that there isn’t more communal living going on. Usually the only shared residences outside of company and student dormitories are those occupied by foreigners just off the boat, those little oases of non-Japanese manners and mores known as “gaijin houses.” Of course, most Japanese apartments, even the larger ones, are not really adequate for communal living the way apartments in the West are, and in any case Japanese landlords tend to frown on renting out properties to multiple persons if those persons are not married or otherwise related. Consequently, there’s no vocabulary for shared dwellings, much less a market.
That is until now, and it appears to be a market-driven development. The explosion of vacant rental properties in the larger cities have prompted some real estate companies to take it upon themselves to offer what is being calle “share rooms,” meaning houses and apartment buildings with communal living rooms, kitchens and bathrooms. These companies rent out the bedrooms as they would apartments, and the practice has caught on so much so that the media is covering it as a fashionable trend. The internet is overflowing with share room bulletin boards. Read More
The column for legitimacy
In Japan, if you are the mother of a newborn baby you have to check a column on the birth report you file with your local government office acknowledging that your baby is “legitimate.” On May 5th, which is Children’s Day in Japan, the justice ministry issued a directive saying that the authorities can now accept birth reports with the “legitimacy” column left blank.
The Koseki (family registration) Law stipulates that a child’s legitimacy must be indicated in writing on the birth report. If the parents refuse to check the column, the report will not be accepted. That means your newborn baby cannot be included in your family registration form (koseki), which in turn means that the newborn baby doesn’t exist legally. The child cannot receive any services from the local government because the child cannot be issued a residence card, which is based on the existence of a koseki; although, depending on the particular local govenment, some babies without kosekis have been issued residence cards in the past under special circumstances so that the child can receive services such as public education or medical insurance.
If the local government offers these services regardless of legitimacy, then as long as the child remains in Japan he or she will have no problem, but if he or she wants to get married or wants to travel overseas, then there is a big problem. Without a koseki a passport cannot be issued, nor can the person register his or her marriage. In the past few decades several parents and children have appealed to the authorities, including the justice ministry and the foreign ministry, which issues passports, to repeal this rule, but they have not been successful. The government uses the passport law as a means to assert its authority over the matter of legitimacy, thinking that parents who disapprove of the law will eventually yield and make a koseki for their children. It means that the parents acknowledge that their children are not legitimate persons. Many of the parents who have refused to check the column do so as a kind of protest against Japan’s legal discrimination of “illegtimate” children. So even though the authorities now no longer have to force them to check the column, discrimination is still built into the law. More than two decades ago the UN Human Rights Commission asked Japan to abolish this law.
The central government would like nothing better than to rid itself of its public housing organ, UR, which is actually a semi-public corporation but bleeds so much money that the government constantly has to prop it up. Recently, the government committee tasked by the new ruling party to screen budget requests by the overstuffed bureaucracy took aim at UR, and for good reason. The public housing organ has attracted all sorts of superfluous amakudari (“descent from heaven,” or offices/agencies that basically exist just to give work to retired bureaucrats) projects that should be excised posthaste. And, in fact, UR should probably be privatized, but before the government does that it should first study why UR is so popular and try to figure out a way of retaining those features through law. Read More