Harumi Flag Rising

That view!

Renovation work on the Tokyo Olympics Athletes Village that will turn the apartments into condominiums-for-sale won’t commence until after the Paralympics end in September, but already business media are exploring the future of the Harumi Flag residential complex, as it’s been dubbed by lead developer Mitsui Fudosan Residential. In the end, the various buildings will comprise about 4,800 units, and so far a bit less than one-third of those have already been sold. Since the Olympics was postponed in the spring of 2020, the date for moving into the complex has been moved back by at least a year to spring 2023, and there was talk that some buyers were angry because that means considerable added expense for them. Whether they have been offered a refund and an escape for their contracts isn’t clear, but, for sure, matters such as mortgage terms for the new condos and leases on rentals that the buyers may have to extend in the meantime could be serious hits to their bank accounts, especially given the current pandemic-affected economy.

However, those who have already signed contracts should be happy in one regard: the value of their condo seems to have gone up in the meantime, which means they got even more of a bargain than those who will sign contracts in the future. Condo prices in Tokyo have been steadily going up in recent months after dipping a bit last year, and it’s likely these increases will be reflected in the prices of the condos that will be put on sale starting in September. After the pandemic struck, sales activities for Harumi Flag were halted, which now seems like a good decision since Mitsui will likely be able to charge more. According to various real estate web sites, Mitsui will not put all the remaining units on sale at the same time, which would flood the market and bring the prices down. Though nobody seems worried right now that prices will drop over the coming months as more units are put on sale, the idea is to maximize demand as much as possible. As it stands, the units were already cheaper than comparable new condos on the waterfront by 30-40 percent, a situation that reportedly upset neighbors who paid premium prices for their apartments. The reason for the lower prices is that they are being repurposed and that the nearest train station is at least 20 minutes on foot (not counting the time it takes to get from one’s apartment to the ground floor), but also because Tokyo sold the land, which is reclaimed, to Mitsui and its partners at a 10 percent discount just because of the Olympics, a move that has also been criticized since Tokyo can’t really afford such largesse considering the larger-than-expected bill for the Games. 

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Baby you can park my car

We sold our car in 2006 and have never replaced it, despite the fact that in the meantime we moved out of the city and into a suburb where a car is considered essential. Our original reason for getting rid of ours was the cost. We were paying for insurance and biannual inspections and parking just for the privilege of owning a vehicle that we really didn’t use that much. Living where we did we had ready access to several train lines and as we both aged what we once considered the convenience of having a car at our disposal faded, mainly because driving in Japan isn’t very enjoyable, what with the narrow streets, highway tolls, and difficulty with street parking. Though we’ve often thought of buying a car again for emergency use, we keep putting it off because it’s really nice not to have that burden any more. We manage just fine with bicycles and car share services. 

The last place we lived had an underground mechanical parking facility. The space you rented was actually a pallet that moved vertically and horizontally. Parking lots are two-dimensional and thus require a lot of ground space. Mechanical parking garages, what we liked to call “3D parking lots,” used space both above and below the ground level to store cars, thus requiring less real estate. When we wanted to use our car, we went to the carousel assigned to us and, inputting a special code, “retrieved” the pallet by rearranging the other pallets in the carousel in order to place ours right at the front of the gate. This means, of course, that you have to wait for all the pallets to be rearranged properly, and sometimes it took a little time. It was especially troublesome if somebody else who had rented a pallet in your particular carousel was retrieving their car just as you arrived. On a few occasions, we needed our car quickly in order to make it in time for an appointment, and someone was already there getting their car so we had to wait. Fortunately, we never had, like, a medical emergency that required an automobile. The only saving grace was the rent, which was relatively cheap for Tokyo. Before living in that apartment we lived close to the Saitama border and rented a parking space from JR under the railroad tracks. It was unpaved but the tracks protected the vehicles from rain, and we paid ¥23,000 a month. The pallet we rented was ¥18,000 a month, and it was much closer to the center of the city. 

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Big One

To mark the tenth anniversary of the disaster of March 11, 2011, we are posting one of the chapters from the book we are working on about Japanese housing. Some of the following appeared in slightly different form in the anthology known as #quakebook. For those who may be interested, we have been looking for a publisher or agent to handle the book for the last year and so far have had no luck in placing it, so if anyone has advice, connections, etc., let us know. 

On March 11, 2011, the governor of Tokyo was Shintaro Ishihara, who later called the massive earthquake that struck off the coast of northern Japan that day “divine retribution” for some imagined slight to the nation’s soul. Never mind that all of the people who died or were left homeless by the disaster had lived in three northeastern prefectures far from the fleshpots of the capital he oversaw. Ishihara, a popular novelist in addition to being a politician, needed to make some sort of apocalyptic statement. 

No one thought there was anything “divine” about the catastrophe, but we could all appreciate a cosmic joke. The quake hit right in the middle of moving season. The Japanese fiscal year, not to mention the school year, begins April 1, and traditionally many people move house during the month of March because of changing jobs and entering university. Consequently, before, during, and after the quake there were moving trucks parked outside our 38-story apartment building in the Minami Senju area of Tokyo, carrying furniture for people who were settling in. Elevators in Japan are designed to automatically shut down in the event of an earthquake and they can’t be restarted until a technician arrives to turn them on again. Given that the entire city was affected, some buildings had to wait hours or even a day before someone showed up to get the elevators working. Movers were stuck on the street with trucks full of furniture while their customers stood in their new apartments appreciating the view as they swayed back and forth during one of the aftershocks that occurred on an almost hourly basis. Did they regret their decision to move into a high-rise? 

Perhaps not. The disaster helped answer a question: Would all these quake-proofed structures that had been built in the previous decades actually withstand a massive earthquake? Of course, the epicenter of the one we had just experienced was hundreds of kilometers away, but no buildings had collapsed in Sendai, the major city nearest to the quake and one with its own share of high-rises. So the technology seemed to work. But while it saved lives and property, it didn’t solve a more intractable problem: Once you’ve been in a major earthquake in a tall building, you don’t want to be in another one.

We had already been living on the 24th floor of River Harp Tower for more than ten years when the quake struck at 2:46 that afternoon, and had been through a good share of them. They just weren’t as intense. Usually, they started with a jolt followed by a gentle swaying. There are two types of quake-proof technologies for high rises in Japan. One is designed for flexibility: the entire structure absorbs the energy and disperses it more or less evenly throughout the frame, and the higher your floor, the wider and longer the sway. The other type, which is more expensive, involves rubber dampers in the foundation. We lived in the former type. On March 11, we didn’t feel that usual initial jolt but rather a slight rumble from the floor that just kept building until the walls started rattling violently. We knew this was going to be bigger than the usual quake and crouched together under a table. The shaking continued, and then gradually changed to swaying, which was much wider than it had been in the past. But the movement wasn’t as scary as the noise: a massive creaking sound that went on for more than two minutes.

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Go with the flow

Kominka interior. Note roka on the left.

Last week the Wall Street Journal ran a story about how proper ventilation of rooms can help prevent the spread of COVID-19 indoors. Japanese twitter responded in particularly derisive fashion by pointing out that in Japan proper ventilation was considered a pillar of the country’s anti-COVID measures as long ago as February as part of the government’s san-mitsu strategy, which told people to avoid “close” contact with others in “closed” rooms. Generally speaking, this strategy covered commercial, educational, or work spaces, since those were the most problemantic places in terms of keeping people safe from the spread of the virus. The operational logic then and now is that the virus doesn’t survive as long in the open, and so bringing the outdoors inside is a good way of keeping it at bay. For businesses, that means opening windows and/or optimizing ventilation systems to keep air moving through the space.

In Japan, however, greater attention is now being paid to transmission within homes, among family members. Coverage tends toward the inevitability of being infected by a loved one, since there is little you can do about your living situation. However, we would be very interested in seeing a study showing the relationship between intra-household infection rates and specific home layouts and other structural conditions. The first question that comes to mind is whether air conditioning systems help or hinder the spread of the virus. Generally speaking, the virus is in its best element in droplets of saliva expelled while talking or breathing, but scientists also talk about aerosol transmission, meaning the virus itself is carried on air currents. These particles can travel greater distances than droplets because they are much lighter and can still infect others by passing into their lungs when they inhale. Scientists are still debating the scale of infection due to aerosol transmission, but one thing that seems certain is that air currents in closed spaces are instrumental in propelling the virus and keeping it viable for longer periods of time than would happen outdoors or in indoor spaces with air flow passages that connect to the outdoors. Air conditioners are typically heat exchange mechanisms, and the public may misinterpret that to mean they exchange outside air for inside air, but that’s not really the case. Mainly they recirculate inside air and expel the ambient heat through outdoor fans. Consequently, there’s the possibility that if there are virulent particles in the inside air AC units may increase the possibility of causing those particles to enter into the bodies of humans in that space, and this is the main issue, especially in Japan where air conditioning, at least in residences, is a modular affair. Central air conditioning usually comes with filters that may be able to take out virulent particles (though viruses are really, really small). Apparently, some manufacturers have been touting anti-COVID features this summer, but one has to take such claims with a handful of salt. Daikin, to its credit, has been up front about air circulation and says that people should open their windows and use circulators and fans to facilitate ventilation. In other words, don’t count on their air conditioners. Because in the end the cooling efficacy of AC is dependent on how closed the room is and the efficiency of the insulation. That means all windows have to be closed tight and that there be no drafts in order to make full use of your AC. The entire home becomes a closed system, and the potential ventilation advantages of the AC unit-fan relationship is reduced by that much. The thing is, we just don’t really know now how this plays into viral infection rates. Read More

Viral market

Delivery of bathroom fixtures from Asia has been delayed

Since consumption has declined precipitously during the CV19 crisis, it’s no suprise that the real estate market has suffered considerably. The Nihon Keizai Shimbun has obligingly looked into the particulars, which are mostly predictable but worth looking at in detail. The Nikkei reports that people have essentially stopped looking for new homes, though the effect hasn’t been sustained enough to cause prices to fall just yet; and, in a sense, it might be better if prices did fall a bit, since that would encourage people who may be sitting on the fence to jump off and sign a contract.

The main problem at the moment is that people who have already signed contracts are getting cold feet, even if it’s too late at this point. Nikkei says that more than a few realtors it talked to have said they receive requests from customers to “disinfect” the used condos they buy, thus placing the realtors in a difficult position. As one agent told the newspaper, he understood the sentiment but how exactly he was going to convince the customer that he had cleaned the apartment “to their satisfaction” was going to be a problem. For people who had already signed contracts, it wasn’t a primary issue, but for those who were about to sign, the agent’s response could prove to be vital to the sale. A number of realtors said that more than the usual number of price negotiations had broken down since the pandemic developed. Demand is quickly evaporating unless something happens soon to change the situation. Read More

The now and future isolated

A superannuated New Town

Around the time the central government finally decided to declare a state of emergency to get people to stay indoors and help halt the spread of the coronavirus, we wondered if anyone would mention our pet peeve—tower condominiums—as an ideal residential accommodation for self-isolating individuals in Tokyo. The problem with living in a metropolis during an epidemic is that most people reside in collective housing, which makes it more difficult to not come into contact with others if you decide to emerge from your apartment. Consequently, the closer you are to the ground, the more insistent the urge to get some fresh air. High-rise apartment buildings make it that much more difficult to leave one’s home, since it requires getting into an elevator, which is the worst environment in a pandemic—cramped and unventilated—in order to come and go. So in a sense people who live in high-rises are already isolated to a certain degree, since, in our own experience as tower dwellers, such residents require more energy and initiative just to get out the door.

Novelist Jin Mayama doesn’t make this exact point in his essay for Asahi Shimbun that appeared April 18, but he comes close. He acknowledges that families will be trapped inside together for an indefinite period of time and hints that people in high-rises will be more stressed out owing to the cramped conditions. However, he sees this as a kind of opportunity, not so much for the residents, who are mostly stuck with their lot, especially if they bought their apartment, but rather for the rest of us who don’t live in high-rises. The epidemic puts the future of tower condominiums in a new light, or, maybe it would be better to say, a new shade.

Mayama predicts that the lot of tower condos will be strikingly similar to that of New Towns right now, which is that the latter have essentially become “slums.” Most of Mayama’s explanation mirrors what we’ve talked about at length in this blog, but it’s worth going through again for the sake of clarity. Collective housing is still a fairly recent trend in Japan, since it wasn’t anywhere near the norm, even in cities, before World War II. To him, the idea of collective housing as a social trend really took off in 1955, when the central housing authority started planning New Towns, which were based on a British idea but, physically, resembled Soviet apartment blocks. The New Towns were broadly covered by the media as being futuristic and progressive, and were instrumental in creating what was called “new families,” which, to Westerners, were basically nuclear families. Extended families, which had always been the norm and ideal in Japan, didn’t fit the new housing plan. Moreover, the New Towns epitomized the government’s drive to create a “100 million-strong middle class.” Read More

Harumi Flag at half-mast

One of the many negative economic by-products of the unavoidable decision to postpone the 2020 Tokyo Olympics for a year is the fate of Harumi Flag, the condo development project attached to the athletes’ village that was built on landfill in the Tokyo waterfront area. It was widely believed that the Olympics would produce a real estate bubble, but the coronavirus epidemic may have already prematurely burst that bubble. Harumi Flag will feature condominium towers, as well as schools and retail outlets to serve the large community that will be moving in after the games. The condos will eventually contain some 5,600 units and, in all, they are expected to attract more than 20,000 tenants, including renters. The entire area will cover the equivalent of three Tokyo Domes. Eleven developers are working together on the project headed by Mitsui Fudosan Residential.

For buyers, the complex has two attractions, according to a February article in Money Post: bragging rights that the units were once used by Olympic athletes, and cheaper prices. The average price of a new condo in the 23 wards of Tokyo is ¥80 million, which is about the same as it was during the bubble period of the late 80s. The median price of the 85 square meter units that went on sale earlier this year was ¥64 million. One real estate professional told the magazine that, per tsubo (3.3 square meters), the Harumi Flag units are 30-40 percent cheaper than new units in surrounding complexes. And a new 85 square meter unit in central Tokyo would go for ¥100 million at auction. A Tokyo municipal government researcher said that this may be the last chance to buy a new condo with the “big three” advantages—central location, large floor area, and affordable price. It’s the best place if you work in central Tokyo, and the schools will be very good.

Another attractive feature of the complex is that, because it is being built for Olympic athletes, the common areas are spacier and more comfortable. In particular, the elevators are larger. However, the negative points that have been pointed out are specific to the kinds of lifestyles of people who are buying the units. For one thing, transporation is not convenient. The nearest train station is Kachidoki on the Oedo Toei subway line, 20 minutes from Harumi Flag on foot, not counting the time it takes to get from one’s apartment to the ground floor by elevator. Mitsui says that there will be exclusive tandem buses operating between Harumi Flag and Toranomon during rush hour using a special lane, but until it actually starts it’s difficult to gauge how fast and convenient the buses will be. Given the density of the living conditions in the towers and the fact that they plan to operate twelve trips a morning with buses that hold a maximum of 40 people, they may not be enough. For that reason alone, one real estate journalist told Money Post that Harumi Flag is attracting few people who buy property as investments, since, in Tokyo at least, they usually aren’t interested in any apartment that is more than 10 minutes from a station. The same writer says that the initial Olympic legacy hook won’t mean anything ten years down the line in terms of resale value. Read More

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

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

…the further they fall

Elsa Tower 55

Continuing in the vein of our previous post, last August the weekly magazine Shukan Gendai ran an article that revealed an “unwritten” belief among real estate agents in the Tokyo metropolitan area that says tower condos will start to “fall into ruin” starting in 2022. The choice of terminology is interesting here and, apparently, quite literal in that the towers themselves will start to deteriorate in ways that will make it difficult to maintain these buildings for many years into the future. The article describes in credible detail how tower condos differ from other condos, in terms of both structural design and real estate value, and how these differences manifest over time.

Gendai starts out with a profile of a tower condo that was built 15 years ago, or around the time that tower condos were making their debut in Tokyo and surrounding areas. Unfortunately, the article doesn’t say exactly where the condo is, but it contains 400 units, of which only 30 percent are occupied at the time the article was written. The facade is riddled with cracks and the entrance to the building is surrounded by overgrown weeds. The building also has a gym, which apparently has been closed for several years already. The current residents are described as people who have “nowhere to go,” thus implying they would like to move if they could, but the value of their properties has dropped so low that even if they were able to sell their apartments they wouldn’t receive enough money to cover a down payment on another condo. And yet, as the article attempts to point out, the overall popularity of tower condos in Tokyo is currently peaking.

As we previously wrote, tower condos are defined as collective housing complexes of at least 20 floors. Between 2008 and 2017, 341 new tower complexes were built in the Tokyo metropolitan area comprising 111,722 units. It was, according to Gendai, a phenomenon that “no one could have imagined” and, in fact, may have been too good to be true. Realtors have always been suspicious of the tower boom, since there was the obvious danger of oversupply, but to developers towers were the geese that just kept laying golden eggs, so they kept building them. Presently, they are still being erected in the Tokyo harborfront area on landfill, and in suburbs that are conveniently situated for easy access to the city center, such as Kawaguchi in Saitama Prefecture and Musashi Kosugi, which was described in our previous post. Now, some ambitious developers are eyeing certain areas of Tokyo for “redevelopment” with tower condos, such as Tsukishima, which is filled with older low-rise buildings. Read More