In our previous post, we talked about rent relief, and how the Japanese government had expanded its assistance to at-risk renters after the onset of the pandemic. As a result, the number of approved applications in 2020 was 34 times the number approved the previous year, though, in the end, it may not be enough since the people who need the money have to apply anew every three months up to a total of 12 or 15 months. Groups that advocate for at-risk households have tried to convince the government to make the relief open-ended, but the current limits are in line with government policy regarding public assistance, which, as once outlined by former Prime Minister Yoshihide Suga, is made available after an individual had tapped their own individual resources, and then those of their “community.” Government aid is the last resort.
An article published by the Asahi Shimbun on Jan. 5 gives some idea of what kind of assistance the “community” might offer in these cases. The piece profiles a 42-year-old landlord named Tomoyuki Matsumoto, who owns about 80 rental units in Osaka, Kyoto, and Tokyo. He rents the properties to people who may have difficulty finding places to live otherwise because they are poor and/or elderly. The article illustrates Matsumoto’s business model by describing one of his properties, a 3-story nagaya (town house) located in Daito, Osaka Prefecture, that’s more than 50 years old. The interior walls are traditional doheki (wattle and daub), the roof occasionally leaks when it rains, and the toilet sometimes overflows. The tenant, an 81-year-old widow who has resided there 3 years, doesn’t seem to mind these inconveniences because the rent is only ¥35,000 a month, which means she can live there on her national pension. Matsumoto shows up once every two months to collect the rent in person, which she finds very agreeable. As he tells the newspaper, having a personal connection with his tenants is very important to him, and as a result he responds to maintenance problems fairly promptly.
Asahi portrays Matsumoto as a different kind of landlord, meaning someone who doesn’t fit the stereotype. Most of his tenants are seniors living on their own, or others whose incomes limit their chances when renting homes. Most landlords and real estate agents tend to not rent to such people for various reasons, the main one being the greater likelihood of payment delinquency owing to cash flow problems, though with older tenants there is also the possibility that they will die in the residence, which leads to all sorts of headaches. Matsumoto looks at the issue from the opposite direction. When you rent a property to a younger, financially secure person, the likelihood of their moving out on their own is greater due to things like promotions, salary increases, and life’s normal developments (marriage, children), which spur the tenant to seek a better, larger home. However, those on the lower rungs of the financial ladder are not likely to move, and so are more reliable in the long run. The point is that it is more advantageous to a landlord to have long-term tenants.
Matsumoto’s business is very small. He started it a little more than 3 years ago after becoming disillusioned with his job at a major life insurance company. As a child, he saw his father’s business fail and thus understands how people who are financially at-risk need help. He started his business by patronizing shin’yo kinko, non-profit-oriented financial institutions that deal exclusively with local businesses in a given community, who are essentially shareholders of the bank. He started buying up vacant houses and apartments, of which there were many to choose from, and fixed them up at minimal cost. He actively rents to at-risk persons and demands no deposits, gift money, or guarantors. He has only one employee and carries out the rental transactions himself, meaning there is no agent fees involved. By visiting each tenant on a regular basis he finds he can pre-empt possible problems, including delinquent payments, though he admits that sometimes it happens. Local governments and people who deal with at-risk individuals contact him for assistance. One, a “consultant” based in Osaka, told Asahi that recently he received a phone call from a man in his 50s who was being thrown out of his house because he couldn’t keep up the loan payments due to pandemic-related unemployment. The consultant referred him to Matsumoto and had him apply for government rent relief. He is now living in a rental house for which he pays ¥45,000 a month.
The Asahi reporter comments that while Matsumoto’s work is a valuable contribution to the community, it is work that should be done by the local government. Ever since the central government got out of the work of providing low-income housing, that work has fallen to local governments, which tend to give it low priority in terms of budgeting. Consequently, they are not building any new public housing and that which exists at present is over-subscribed. Applicants have to meet very strict financial conditions that eventually discourage many at-risk people from even seeking help from the public sector. They have to rely on private landlords, who either reject them or exploit them. Matsumoto, as the Asahi article shows so vividly, is the exception that proves the rule. And the only reason he can do what he does is because of the surplus of vacant homes, which he can buy cheaply, thus implying that local governments, who have access to more resources than an individual like Matsumoto has, could easily mimic his model and greatly expand the pool of housing available to low-income earners and people on fixed incomes.
Because as the leaky roof, clay walls, and overflowing toilet of the house in Daito prove, Matsumoto’s capability to be a landlord who works on altruism rather than profit is still limited. He tells Asahi that so far he’s had four tenants die alone in his properties. They were surviving on pensions or public assistance, but he says he had no trouble finding new tenants quickly because “there are many desperate people.” If Matsumoto represents the “community” of which Suga spoke, it seems to be a community in short supply.