Empty nest syndrome

Occupied house undergoing a Sumitomo makeover

A Kyodo news report carried by the March 18 issue of the Tokyo Shimbun clarified an important point in the discussion of abandoned or otherwise empty homes in Japan, vernacularly referred to as “akiya.” According to a survey of 700,000 properties throughout Japan conducted by the Ministry of Internal Affairs and Communications, 46.4 percent of akiya are at least 50 years old. Moreover, among the reasons given by present owners for not having unloaded the properties or demolishing them, 52 percent said they had inherited them or received them as gifts and, essentially, didn’t know what to do with them. As years passed, neglect took its toll, and in many cases if not most, the homes, especially if they are single-family houses, have become uninhabitable.

Five years ago the central government enacted a special housing law that would compel local governments to manage vacant properties more proactively. According to Kyodo, the government is now going to “check the effectiveness of the law” in order to see whether it should be revised or supplemented. As of October 2018, the last time the land ministry released findings from its national housing and land survey, which it conducts every five years, the number of vacant homes stood at 8.489 million. That includes apartments and condos that have not been occupied for at least one year. According to the government, there are 12 percent more akiya than there were when the survey was conducted in 2008. In addition, 14 percent of all homes in Japan right now qualify as akiya, and the ministry estimates that 40 percent are “abandoned,” meaning they are permanently unoccupied. Last year, Nomura Research Institute projected that by 2033, the number of akiya would increase to 19.55 million, or 30 percent of all homes in Japan.

In a related story, Nikkei Business Daily’s March 15 edition explained Sumitomo Realty and Development’s new project to exploit vacant single-family houses. The project accepts orders for renovations of derelict houses in order to turn them into share houses (i.e., homes with multiple residents who share common spaces), minpaku (guest houses or airbnb properties), or social welfare facilities. Sumitomo has a lot of experience in the home renovation business through its Shinchiku Sokkuri-san brand home “reform” service. “Shinchiku sokkuri-san” roughly translates as “making an old house look just like a newly built one.” Since the service started in 1996, Sumitomo has renovated about 130,000 houses, and is now working on expanding the business to include renovations that turn old single-family houses into share houses or guest houses.

Sumitomo’s target with regard to akiya are wooden houses, which number about 2.39 million. The land ministry says that about 480,000 akiya in Japan that are judged to be easily renovatable are also located within one kilometer of the nearest train station, making them easily sellable after going through the reform process. Last year, the government relaxed the building standards law so that usage of a structure could be changed more easily, for instance from residential usage to commercial usage. Consequently, Sumitomo wants to turn some of these old family houses into airbnbs or share houses or even restaurants/cafes. Sumitomo, in fact, projects that its revenues for reform business will amount to ¥123 billion in fiscal 2020, a 6 percent increase over fiscal 2019. So there may be some life in those old empty houses after all.

Slipping away

That first step is a doozy: First world elderly problems.

Here’s a fairly common retirement strategy: The kids are gone and have families of their own, so the house you bought so long ago and which is likely paid for by now becomes too big, so you sell it and use the money to buy a condo somewhere in or near an urban center where public transportation and retail resources are easy to access. However, a recent feature in the weekly magazine Shukan Gendai warned people who are thinking of doing this to think twice. It may not be as easy as you think, and, in fact, it could end up being a disaster.

The number of people in Japan over the age of 65 recently exceeded 35 million, an expanding demographic that has become a target for real estate agents who are selling used or new condos, which tend to retain their value more readily than single-family homes. As it stands, many of these new retirees probably live in single-family homes in the suburbs of large cities to which the heads-of-household used to commute. These houses are likely two stories, a structural feature that becomes more of an inconvenience the older you get, and they are also probably far from public transportation hubs, meaning the people who live in them require a car to get around. Realtors use such reasonings to convince people to sell their homes and buy condos, and it makes sense, but not as much sense as it used to. First of all, there are just too many single family houses on the market and not enough people who want to buy them, and that disadvantageous ratio will only get worse as the population greys further.

Gendai also brings up the magic amount of ¥20 million, which is what a retired couple should have in savings to supplement their pensions. Actually, ¥20 million is probably not enough unless the couple is able to invest in some kind of financial instrument that can guarantee a small income, but most people still have their savings in time deposits, which generate almost no income, so the thinking here is that the couple lives off their pensions and doesn’t touch their savings since they may need it for emergencies. It’s a precarious way to live. Read More

Alone again, naturally

Public housing complex run by Saitama Prefecture

Low income public housing is available in Japan through different levels of local government, either prefectural or municipal, though some larger cities also have public housing run by wards (ku). In almost every situation, however, the applicant, traditionally, has to have a guarantor, ostensibly as a backup in case the tenant is unable to pay their rent. Obviously, because public housing is only available for people of limited or no income, coming up with a guarantor could pose a problem, since it’s entirely likely that the applicant does not have anyone, meaning relatives, they can lean on for such support. In Japan, welfare authorities do not extend public assistance to applicants without first making sure that the applicant cannot tap a close relative for such assistance. It’s one of the uses of the koseki (family registration) system. Once it is understood that the applicant has no relation they can turn to, then welfare officials grant assistance. Of course, this isn’t a universal requirement—as with most bureaucratic processes, it’s up to the individual official—but it’s enough of a protocol to make applying for assistance difficult for many, and when it comes to housing, guarantors are thus required. Usually, officials insist on relatives, since they are more likely to honor the contract.

Now, apparently, some local governments are facing up to reality. An article in the Jan. 20 Asahi Shimbun reports that an increasing number of local governments are eliminating the guarantor requirement for public housing. Asahi Shimbun apparently carried out its own survey and found that 13 major cities in eight prefectures have waived the requirement, and the newspaper predicts that many more will follow.

According to the land ministry, in 2018 1,674 local governments provided public housing, and of these 366 reported cases where applicants were rejected because they could not provide guarantors. This problem is becoming more acute with the aging society, since single elderly people without means are less likely to have living relatives who can vouch for them. Consequently, the land ministry itself some years ago started sending out notifications to local governments to remove guarantor requirements. In the end, of course, it is the local government’s decision, but since the central government subsidizes welfare assistance, many local governments have taken the notification as a kind of directive. Read More

Am I high?

Tower condos in central Kobe

Local governments are starting to realize the disadvantages of tower condos and doing something about it. According to a Jan. 3 article in Tokyo Shimbun, last July the city of Kobe implemented regulations that would limit construction of new condominium complexes in the city center. As mentioned in a previous post, last fall’s kanto area typhoons brought home to the residents of at least one tower condo in Kanagawa Prefecture the truth that high-rises were especially vulnerable to storms in ways residents hadn’t counted on. Western Japan has had more immediate encounters with typhoons in recent years, and that seems to have been part of the reason for Kobe’s new regulations, though the main impetus may be purely economical.

The new law covers land to the south of Sannomiya Station. For the 22 hectares closest to the station, all new residential construction, including single-family houses, has been banned. Then, in the surrounding area, for any plots of land that are 1,000 square meters or more in size, the capacity rate for new residential construction is limited to 400 percent. That means, for instance, if a building with a footprint of 500 square meters is built on these plots, it can be no taller than 8 floors. Tower condos are defined in Japan as being at least 20 floors, and usually they contain at least 100 units. Currently, Kobe has 69 high-rise condos, 24 of which are located in Chuo Ward, which is where Sannomiya Station, the main transport hub, is situated.

One of the reasons for these restrictions is that the city can’t provide all the services required for tower condos. The trend at the moment is for younger people to move as close to city centers as possible so as to be nearer to their jobs. They are willing to pay for such proximity because they understand, having grown up in the suburbs watching their fathers commute two or three hours a day to and from work, what that commute does to their lives. And a lot of these young people have families, but Kobe can’t provide enough schools in the city center. At the moment, in fact, many existing schools in the area have had to provide prefabricated classrooms off-site, because there is no land left in the city center to expand schools or build new ones, and one of the reasons is that there are so many tower condo complexes taking up room. For the same reason, there aren’t enough stores or other commercial facilities and, most significantly, there is a paucity of employment, which means, ironically, that the city center has become a kind of bedroom community for surrounding areas, including Osaka. Read More

Help the rich

The Japanese government expects 40 million foreign tourists in 2020, which would be a new record. Obviously, many of these people will be coming for the Olympics, but the government seems to think this wave with money to spend is going to be a regular and permanent thing, and they want to be prepared for a future where such people feel welcome. Legalizing casinos is part of this vision, but that plan was mostly formulated before the current foreign tourist boom was confirmed, and, in a real sense, the so-called integrated resorts that are being planned as excuses to allow casino gambling may not be as necessary as they once seemed, but it’s too late to stop now.

You can’t have too much for rich people to do, so the latest plan, reportedly the brainchild of Chief Cabinet Secretary Yoshihide Suga, is to build 50 luxury hotels by the mid-2020s. Why luxury hotels and not just regular hotels? Why 50? So far, nobody has really clarified the reasoning behind this ambitious scheme, but in the end the biggest unasked question is: Why the government? Japan is a resolutely capitalist country, reverent to the invisible hand of the market. And while Japan has been jokingly called the most socialist liberal democracy in the world owing to its schemes to game the economy through elaborate spending plans (which invariably help political vested interests), the idea that they would blatantly come up with such a concept to lure rich foreigners seems almost funny.

Some media are saying the scheme was suggested by David Atkinson, a former Goldman Sachs analyst and advisor to the Japan National Tourism Organization who has been promoting inbound tourism for years as a solution to Japan’s fiscal woes. In the interviews Atkinson has given over the years, he doesn’t mention luxury hotels exclusively. He mainly says that Japan needs more rooms of a less traditional sort—fewer ryokan and onsen inns and more conventional Western style hotels where foreign guests can feel comfortable and make their own plans. The trouble with traditional Japanese accommodations is that they tend to take the guesswork out of everything. You eat what they serve you when they serve you and even tell you when to go to bed. Read More

We’re on Twitter!

We recently opened a Twitter account under the catforehead moniker. The Twitter handle is @catforehead1. We will use it to tweet links to English or Japanese articles and other items on the internet related to housing in Japan. Please follow us and tell your friends about it. Part of the reason for starting a Twitter account is to attract more attention to this site as we look for a publisher for our book. If anyone could help us in that department, please feel free to contact us through this blog or through the Twitter account. Thanks.

Notes from underground

One of the older neighborhoods in Inzai without utility poles.

In recent weeks, we heard that the city where we live, Inzai in Chiba Prefecture, has become notorious for something. This has happened before; in fact, it’s happened several times. Though Inzai is about as nondescript as a Tokyo suburb can be, it occasionally pops up on the news for some reason or another. Earlier this year we were the butt of jokes because of a PR video produced by the city that had gone semi-viral because of its conflation of the name “Inzai” with the word “Indo,” which is the Japanese pronunciation of India. The video, fashioned after a low-budget Bollywood production, featured Indian tourists supposedly flocking to Inzai because they somehow mistook the city for their home country. Yeah, it deserved all the derision it attracted, and not just for the bad humor. More often, however, Inzai gets cited as one of the most “livable” cities in Japan for reasons we’ve talked about before and don’t need to get into again.

This latest blast of fame apparently originated on the prime time TBS information program “Newscaster,” which ran a mini-feature during its “7 Days” weekly review segment in September about all the homes on the Boso peninsula that had lost electric power during and following Typhoon Faxai. The main problem was that the strong winds blew over utility poles, many of which were in poor condition due to neglect. Because of all the work involved in getting utility lines back up, some sections of Chiba Prefecture didn’t have power for more than two weeks. In order to illustrate what could be done in the future to avoid such disasters, TBS visited Inzai, where a lot of new single-home construction is currently taking place. They went to one development near Inzai Makinohara Station on the Hokuso Line, the same station we use, because this neighborhood did not have utility poles. All the electrical cables are underground. Burying cables is the norm for most of the developed world, but Japan is way behind. In Tokyo only 8 percent of cables are buried; in Osaka only 6. In Hong Kong, London, and Paris all the cables are underground. Read More