Make mine maglev (1)

In December, four of Japan’s biggest general contractors were accused of bid-rigging with regards to their involvement in the construction of Japan’s maglev shinkansen, vernacularly referred to as the “linear motor car.” Bid-rigging is a fairly common practice among Japanese general contractors, and so far two have owned up to the charges. They will be fined, executives will be shuffled around in a bid for self-reflection, and everyone will get back to work, because the ¥8 trillion project is too important to be sidelined by a mere money scandal.

In terms of media coverage, the scandal provided a kind of shade that was necessary so that the press couldn’t be accused of avoiding other, deeper, more problematic issues regarding the maglev project, which involves building a line between Tokyo and Nagoya by 2027. In fact, the scandal is probably the best news that JR Tokai, the arm of Japan Railways that is building the maglev, ostensibly with its own money, could have received since it diverts any media attention away from the deep-seated problems that are already plaguing the project. Since construction has already started, it’s too late to cancel the thing, but it seems likely that the company won’t make its deadline owing mainly to the fact that it still hasn’t purchased all the land it needs.

Because of the technology involved and Japan’s peculiar topgraphy, 246 kilometers, or 86 percent, of the initial route between Tokyo and Nagoya will be built underground, thus making it, basically, a very long subway line. Besides the obvious negative ramifications this aspect of the project could have on its appeal as a tourist attraction, the fact that the tracks have to be underground brings up significant logistical issues, and so the central government passed a special law that said space that is at least 60 meters below the surface is not owned by the title-holder of the land on the surface. The law thus allowed JR Tokai to avoid having to negotiate with landowners along the route planned for the tracks, as long as those tracks are located at least 60 meters below the surface.

However, the surface must still be taken into consideration. For instance, all new stations between Tokyo and Nagoya have to be built on the surface, and often surrounding tracts also have to be bought for ancillary purposes (parking lots, retail outlets, etc.). Also, according to the law, underground railways must provide egress to the surface every hundred meters or so in case of emergency, which means the land on the surface where the exits are built must be purchased.

But the most pressing need for land on the surface is for roads on which dump trucks will transport excavated soil and rock. These roads have not been built yet (for that matter, places to deposit the excavated rock and soil haven’t been designated yet, either), because the land has not been secured. According to Hideki Kashida, a journalist who seems to have made it his life’s work to report on the maglev, approximately 5,000 people own the various tracts of land that JR Tokai will need to buy for the construction of the maglev. The cost, they estimate, is about ¥342 billion. However, some of the land owners are not selling, a big problem in a country that doesn’t have eminent domain.

The reasons for not selling are numerous, and most are personal–basically farming families who are loath to give up their legacies. Some, however, are more practical minded. Environmental groups are protesting the transport roads because they will ruin national parks and the natural environment. The tunnels will destroy aquifers, upon which many rural residents rely for their water–several rivers may dry up as a result. Since the maglev uses up to four times the amount of electricity that a conventional shinkansen uses, residents along the route are afraid of electromagnetic fields.

Kashida says that so far several hundred people have filed lawsuits against JR Tokai to stop or restrict construction, and though courts have traditionally backed up large corporations in such suits, the trials could cause delays. They will also increase the cost of the project, but that doesn’t seem to be a big problem because the central government has already stated its interest in completing the maglev, not just to Nagoya by 2027, but to Osaka by 2045. It’s already guaranteed a ¥3 trillion loan to JR Tokai. With the government in the game, public opposition will become meaningless.

In any case, we don’t expect to see the maglev shinkansen completed–at least to Osaka–within our lifetimes, but we will continue to cover the story in this blog as it develops.

Kill Your (Vacation) Landlord

Judging from the amount of coverage it’s received from the domestic and foreign press, Airbnb’s decision to remove 80 percent of the properties from its Japanese listings is a big deal. That wouldn’t be surprising except that previously the Japanese press, at least, didn’t seem overly interested in the house-share service. What makes it news is mainly timing. On June 15, the new Minpaku Law, which regulates the short-time rental of private property, goes into effect, right before the vacation and tourist season starts. Apparently, Airbnb, nervous about a government crackdown, decided not to take any chances and dropped listings of properties that couldn’t prove they had already received permission to operate under the new law. That means people who had made reservations at these properties in the past are out of luck unless their owners can somehow get a license to operate by the time the visitor is scheduled to occupy the room or home. Some people are blaming Airbnb itself for, presumably, not being prepared for this sort of outcome, which has been apparent at least since the beginning of the year. Whether the visitors who made reservations have gotten the message isn’t clear, but it’s likely that, come next month when they show up in Japan after having spent money on air fare and other vacation-related expenses, they may find themselves locked out of the place they thought they would be staying at. One can imagine scores of foreigners wandering the streets of Tokyo and sleeping under bridges. Thank God it’s a safe country.

Seriously, though, the Minpaku Law, regardless of how poorly it was conceived and written, was inevitable, and its purport with regard to Airbnb is hardly limited to Japan. What makes it momentous, and, in the long run, perhaps prescient, is that it adds a layer of national intent to locally enacted rules that weren’t being enforced very strongly before. In other words, Airbnb didn’t take local regulations at face value until the central government said they supported them through the law. Ostensibly, the reason for the stricter definitions is public order–protecting communities where property owners rent out rooms to strangers. Less obviously, the Minpaku Law supports the powerful hotel and innkeepers industry, which has been calling for the banning of peer-to-peer short-term rentals. And even less apparently, but no less potently, the law favors another powerful lobby, the real estate industry, which can use the law to corner whatever market is left of short-term vacation rentals, since many of the rules call for oversight by corporate entities, or, at least, entities that act like corporations.

The Minpaku Law essentially covers two types of properties. The first type is a property that has applied for and received the proper permits, meaning they comply with the hotel law. From the outside, they may look like a regular private residence, but inside they adhere to fire regulations and there is someone who manages the property on site. Minshuku, capsule hotels, and guest houses fall into this category. The second type are properties that heretofore fell into the so-called gray zone, rooms that did not comply to the hotel law but weren’t really breaking any laws–until now. Though fire laws and other related safety regulations will presumably be more strictly enforced for these properties, the main difficulty will be stricter enforcement of zoning laws, which are locally enacted. The main blanket, national rule is the one that says minpaku can only rent out rooms for a maximum of 180 days out of the year. Also, if the property is in a condominium, the owners association must be apprised of the existence of a minpaku and approve of it in writing, which may end up being the most difficult condition to satisfy, even when localities don’t prohibit minpaku from residential zones. Read More