Not quite

We’ve always been interested in town houses and are still thinking of dedicating a Japan Times column to them. Town houses were briefly popular in the late 70s and early 80s. Japan has always had an indigenous town house, called nagaya or machiya depending on which part of the country you’re in, but the structures called “town houses” in English (sometimes “terrace houses”) were more like their Western cognates: two-story structures with walls adjoining their neighbors. In urban environments town houses offer more effective utilization of land than normal detached houses while providing a similar level of creature comfort. However, once land prices skyrocketed in the mid-80s town houses were considered economically inefficient, even in the suburbs, which is where you normally found them anyway. Everybody started building condos with boxy floor plans in order to get as much cash out of a block of air as possible. Every so often we come across an old town house on sale and check it out, but because of their relative scarcity they tend to be overpriced. Of course, “overpriced” is all a matter of perception. Because town houses are relatively unusual, owners think that makes them more valuable, but they’re still old and always need a lot of work, as much as a detached house of the same vintage does if it hasn’t been renovated (and usually they haven’t been). A few weeks ago, as a matter of fact, we were amused to see a listing in which town houses were qualified as being “popular.” They aren’t, at least not in the general definition of the word. They are simply “rare,” which means it’s assumed some people will pay a bit more to have one.

Several weeks ago we took the train to Kita Kashiwa on the Joban Line to inspect a town house that was located about midway between Kita Kashiwa station and Abiko station. The town house itself was in Abiko city, though it was just a stones throw over the Kashiwa city line. This was closer to Tokyo than we’d been for quite a while in our house hunting adventure, though, again, “close” is also a matter of perception. From Abiko station the Joban express gets to Ueno pretty fast. Given our budget and the kind of place we wanted, we had given up looking for a place this close to the metropolis, but the town house we were going to see was only ¥5.8 million. Usually, that price within a half hour of Tokyo will get you a shack in the shadow of an abattoir. This was a town house built in 1983 in a residential neighborhood, though, as we walked the ten minutes from Kita Kashiwa to the property we realized it wasn’t the sort of residential neighborhood we wanted. For one thing we walked along Route 6–popularly referred to as Mito Kaido–one of the ugliest, noisiest, most pollution-choked arteries on the Kanto Plain. The neighborhood was just south of Route 6 by a few blocks, and we were surprised when we arrived to notice that, owing to a trick of the terrain, we couldn’t hear the roar of trailer trucks at all. This was a good sign, along with the knowledge we had already gathered that the land under this particular portion of Abiko was quite solid and had held its own admirably during the March 2011 earthquake (some parts of the city famously liquefied).

By definition a town house will be part of a group of town houses, and this one was built by a developer called Common City, which constructed a number of town house developments in various localities throughout northern Chiba Prefecture in the early 1980s. There were more than a dozen units to this one, bulit along the perimeter of a long block with gardened brick pathways in the center. The one we were looking at was on the northeast corner of the block. It was a typical suburban neighborhood of its particular vintage. The streets conformed to whatever helter-skelter arrangement of paths had been carved between plots of farmland when the area was developed for residences. There was no unity of width or direction or even purpose, and nary a tree in sight except the few that clung to the sides of a houses as if trying to hide from someone. The architecture was similarly ramshackle and random, but in any case we had already learned that there was a height limit in this area so no one would be building a tower condo to block out the light. As inconsequential as the neighborhood looked, it obviously possessed some sort of collective will.

The agent who met us was fortyish and soft (all the realtors we’ve met lately resemble industry minister Yukio Edano), and like everyone in his position seemed genuinely surprised when we told him we had taken the train and not driven. In fact, the main reason we liked this location was its proximity to two train stations that connected comfortably to lines going pretty much anywhere. As it happened, the people who owned the town house were still living there: a couple approaching retirement who had lived in the place since they bought it brand new and who were planning on spending their twilight years in Kyoto, where they were from originally. Speaking in stage whispers in the shade of the development’s refuse station–it was a blindingly hot day–the agent told us that the couple had originally put the place on the market for ¥9.8 million in the early spring, reduced it after a few months to ¥7.8 million, and a few weeks ago lowered it again to 5.8. It’s an old, sad story, one we are familiar with, though a more compelling one than usual owing to the appearance. The place looked great from the outside, having been recently painted by the management company that kept the development up. Even better, the floor space added up to 106 square meters.

The lady of the house let us in. Inspecting a property in the presence of the owner is always intimidating, especially when she is still living there with all her possessions in place. In theory, it should be an ideal situation since you can get information from the horse’s mouth with regard to matters the realtor won’t know about, such as the situation with neighbors, the way the light changes throughout the day, ambient noise levels, and what it feels like when an earthquake hits. And though the owners are pretty desperate to unload their place, we’ve found they’re usually frank and don’t try to hide unpleasant truths. This woman, however, was reticent, as if she were afraid to say anything without her husband’s approval. We did learn that they had lived in New York City, where he was transferred for work, for several years before buying this house. We asked where and she said in the east 90s in Manhattan. We said it’s a very expensive place to live. She replied maybe it is now, but it wasn’t then.

The place was clean but it was obvious they hadn’t done much with it in the almost three decades they had lived there. The wallpaper darkened toward the corners and ceilings. The floors were dull and weathered, but not in a pleasant way as with real wood floors. They had a lot of stuff, which made it difficult to arrive at a fair assessment of the interior. The bottom floor was occupied by the long living-dining-kitchen area that looked out on a narrow garden and the town house opposite. It was morning but difficult to tell due to the heavy gauze curtains. Because of the owner’s uncomfortable silence we felt it necessary to ask permission to open the drapes. The room brightened considerably but still felt gloomy owning to the accumulation of bric-a-brac. The kitchen area was small but practical. The main problem was the bathroom. It was the only part of the house they’d ever renovated, but all they did was put in a new bathtub. The washroom with the sink felt cramped because of the way it was oriented and they had placed their washing machine in front of a utility door that led to a small space in front of the house, effectivelly making it unusable.

The second floor was carpeted, except for the one tatami room. The two small northern rooms had gabled ceilings, but they were currently being used to store all the things that were ready to be moved to Kyoto, so it was difficult to judge their utility. The tatami room was pleasant and very old-feeling. The remaining room was dark and musty, and there was an attic above it with a skylight. Under normal conditions we would have left without even looking back, but along with the usual disappointments there were enough pleasant surprises to make the very low price tag something of a game changer. We walked to Abiko, which was a much nicer experience than the walk from Kita Kashiwa–urban vegetable gardens amidst the housing developments–and caught the Narita Line, getting off at Ajiki. We walked about 20 minutes to yet another development to look at yet another cheap house, this one detached and going for ¥7.5 million. It had a nice view to the southwest toward a park and, beyond the park, some rice fields. But it was in typically bad shape for a house built in the late 80s. Though the town house we had just seen wasn’t a big deal, it was better than this, which would have required a whole mess of money to renovate.

So we talked about it more. What would make the town house acceptable to live in and how much would it cost? Several walls had to go, in particular the north wall of the LDK, which seemed superfluous since all it did was separate the LDK from a hallway. Then, the bathroom needed to be redone, opened up so that air could flow from the north window into the kitchen. Upstairs, we could remove the walls separating the two pairs of rooms, creating two large rooms and one walk-in closet in the space where two smaller storage areas were now located. Also take out the ceiling in the one room with the attic, thus allowing more light in through the skylight. We called the agent and asked what we were allowed to change. He said we couldn’t change anything related to the exterior of the building because that was considered communal property, and so couldn’t make windows wider. But inside we could do anything that didn’t compromise the town house structurally. He offered to get us in touch with a home improvement company that could answer all our questions.

Frankly, we found this all very exciting, probably because after so many years of not getting anywhere we had actually gotten this far; though, in truth, we hadn’t made much in the way of actual progress. There were things we didn’t like about the town house, but we had reached a place a long time ago where we knew we couldn’t have everything we wanted so it was more a matter of which compromises we were willing to make. Transportation-wise, the location was great, but aesthetically it was unappetizing. With our imagined improvements, the house should be bright and cheerful, but there was nothing really to look at through the windows. It was even difficult to get a good piece of sky. In any event, we would have to go back and look at it again, and a few weeks later we made an appointment to revisit the town house.

On the day we did, we learned there was an open house for another town house not far from the one in Abiko, this one in Kashiwa proper, but also accessible from Kita Kashiwa station, on the other side of Route 6. As it happened, that made all the difference in the world. This particular piece of Kashiwa was leafy and old and well taken care of; not rich, but middle class in a permanent, proud sort of way, and the town house complex was in the midst of an old semi-public housing complex, the kind where the layouts made human sense. This town house was more than 90 square meters, comprising a large dining-kitchen area, a separate living room, and a bathroom area on the first floor, and four separate rooms on the second. The place had completely been renovated by a real estate company and was beautifully done. We didn’t particularly care for the spongey flooring, but it was much better than the usual thing you get in a renovated old apartment, and it was dark so the difference wasn’t that obvious. Better was the wallpaper. Instead of the boring, conventional “kurosu” that is applied to every Japanese wall, this place actually had texturned coverings in different shades throughout the house. The windows were all transparent and large, with the ones on the second floor allowing for large patches of sky to be seen from anywhere in their respective rooms. The cross-ventilation was marvelous, and the refitted kitchen was stylish and utilitarian. It cost ¥15.8 million, not necessarily beyond our means but much more than what we wanted to pay.

So we walked out of that nice, comfortable town house, out of that relaxing neighborhood of tree-lined streets and canals, and across the Maginot Line of Route 6 to Common City. This time the master of the house was present, and he turned out to be as reticent as his wife, though slightly more accommodating in terms of answers. It was also much later in the day, which meant the light was even less available than during our previous visit. We used our tape measure to gauge counter lengths, window sizes, sash heights. We discussed the removal of walls with the realtor as the owners stood there in awe or horror, it was difficult to tell. He had made copies of the construction diagrams of the house, which we didn’t understand (“So this wall is necessary right? Uh…which wall is it?”) and halfway through our second tour we understood that we couldn’t do anything without an architect or designer. But it wasn’t exciting any more, not after seeing the renovated town house in Kashiwa, which, in truth, wasn’t how we would have done it if given the choice, but it was still a lot better than what we could imagine this place might look like, even with the new wallpaper, hardwood floors, and greater abundance of breathing room we wanted to bring to it. Our imagination just didn’t take us that far.



  1. Chris · September 22, 2012

    I really enjoy this blog. I lived in Tokyo (Nishi-Funabashi) for a year and a half and met my wife there. We have been back many times to her home town in Hakodate. Moving back to Japan permanently is always on my mind and I find the insight about the housing market very interesting.

    I am comparing prices for some of the houses you’ve looked at and I must say that I am surprized at how much cheaper they are than I expected. 5.8MYen ($72,000 CDN) for a town house that needs work, 30min from downtown Tokyo, is pretty good I would think.

    Where I live, Ottawa, Canada, that would start at 3-4 times that price. I guess a better comparison would be the house price to annual salary index. For example the house price I paid at the time was 4 times my annual salary. Is this similar for your environment?



    • catforehead · September 22, 2012

      Four times sounds about right, but you have to remember that the housing market in Japan is strange. People looking for property overwhelmingly want new homes. Used properties, outside of Tokyo, at least, are much, much cheaper because they’re much, much less in demand. And that situation causes a vicious cycle; or, at least, it has up to now. It’s very difficult to sell a property, even at ¥5.8 million within 30 minutes of Tokyo.

      Also, our particular situation is special. We’re both self-employed and do not have guaranteed incomes, and those circumstances combined with our ages (we’re in our 50s) make it very difficult for us to get a standard bank loan. But we want to pay cash anyway. We have some money saved. It’s just that a lot of that money is, to use a tired expression, our nest egg, as well as a hedge against those times when the income dips. The fact is, we’re perfectly happy renting the rest of our lives because owning is, to put it bluntly, a pain in the ass. Our desire to buy is based solely on the possibility that our income may dry up. If we own and don’t have a mortgage then we at least have a roof over our heads. We figure on how much rent we would pay over the next 10-15 years and have limited our budget to that amount. That way if we can’t sell the house when we’re old at least we haven’t “lost” any money. We certainly don’t expect to make any.


      • Troy · September 22, 2012

        yes, I am in a similar situation, assuming I can relocate myself to Japan this decade like I hope to.

        Demographically, the entire nation will begin centripetally shrinking towards central Tokyo starting about now.

        The age 20-64 population peaked at ~78M in the 1995-2005 period.

        It fell under 75M in 2010, and will fall to under 68M by 2020, just about the same working-age population level Japan had in 1975.

        Compared to 1975, in 2020 there will be 15M fewer 0-19 yos, and 27M more elderly (of that, 16M more age 75+).

        And since Japan’s postwar baby boom was so short — just 2 or 3 years, ending in 1950 — Japan’s elderly population will begin topping out in 2020 more or less (I’m looking at this chart).

        Compared to 2010, by 2030 there will be 6M fewer youngsters, 12M fewer working-age people, 1M fewer age 65-74, but 9M more age 75+.

        Between 1950 and 2000 Japan gained ~40M working-age people. Between 2000 and 2030, Japan is going to lose 16M from this population segment — 2030 will look like 1970 in this department, with 63M working-age people around again.

        Real estate is very much driven by regional supply vs. demand, (this is almost more important) disposable (after tax) household incomes, and also mortgage interest rates.

        The BOJ has thrown the kitchen sink at the latter, and they will probably stay as low as they are now for the foreseeable future.

        Demand vs. supply is the interesting question — where are the old people going to want to move to, and where are the young people going to want to live, too. . .

        The major cities should continue to vacuum the youth from the countryside, but I don’t know what’s going to happen to the elderly.

        The middle factor, after-tax household incomes, seems to me to be rather critically dependent on that t-a-x thing.

        Since the mid-90s, Japan has cut income taxes to try to aid recovery from the bubble crash. At any rate, Japan has very low personal tax burdens compared to every other western country (other than the US, but let’s not go there).

        If Japan is ever going to actually pay on its 1 quadrillion yen public debt, it is clearly going to have to raise the tax burden, and it’s my thesis that this additional tax hit will come right out of rents and land values.

        So, the general macro picture of land values is none too unfavorable, if one is a buyer.

        If one is a seller, than the story of the townhome owners is a needed reminder to me that real people are being hit by these over-arching financial megatrends.

        So many people got fat & happy on the 1980s run-up, but since then it’s been an almost unrelenting decline.

        What a story, and tragedy of economic malpractice.


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