The Lie of the Land

Here is another chapter from our unpublished book about housing in Japan based on our own experience of trying to buy a home. This one is about residential land usage.

Example of a private road built for a future fukurokoji housing development

“It’s about the size of a cat’s forehead” – proverbial Japanese rejoinder when asked how much land a person owns

The real estate agent picked us up at the train station in a company car with long scratches on the side, probably inflicted during attempts to park in tight, unfamiliar spaces. We drove to the property through dense suburban sprawl overshadowed by pylons and interrupted by small plots of farmland. 

The two-story house had royal blue siding and was sixteen years old. The owner moved out two years ago. The wallpaper was discolored, the laminate wood floors spongey, the second floor “veranda” filled with debris. The price: ¥5.8 million. We estimated it would take at least ¥6 million to make it livable, but ¥12 million for the whole thing seemed too much. Moreover, anyone who bought the house would have to assume the lease for the land, which was ¥38,000 a month.

The agent explained that the same landlord owned the property under the other four houses on the street. The owners all had them built at the same time and paid the same rent. The leases were 50 years, which meant the owner of the blue house was still paying rent even though he didn’t live there any more, and would continue paying rent until he found someone to buy the house and take over the lease. He originally wanted ¥12 million, but had come down to ¥5.8 million about a year ago. We asked what the options were if he couldn’t find a buyer.

“Oh, he could easily rent this place, depending on how much he asked,” the agent said. “Many people in this situation do that.”

This concept of owning a house on rented land, in Japanese called shakuchiken, isn’t uncommon. According to the land ministry, between 1993 and 2007, 35,492 single-family homes and 18,937 condominium units were built on rented land, a trend that peaked in 2001, when many companies in the Tokyo Metropolitan area starting selling off property, fueling a development boom characterized by cheaper condos. When prices rose after 2005, shakuchiken started becoming popular again. The agent said that the number of people building houses on rented land was increasing, “but you don’t see so many for sale.”

As a rule, the value of homes in Japan depreciates rapidly, but land is still expensive, and not just in urban and suburban areas. Because of usage laws that make it difficult to shift land designated for agriculture to residences, even the countryside can be costly. 

We had decided to check out shakuchiken after talking to a friend, also self-employed, who had a house built on rented land seven years earlier. He and his family wanted to live in Kamakura, the trendy center of traditional culture located on the Miura peninsula just south of Tokyo, but were looking to rent since they didn’t think they could afford to buy a house there. A real estate agent directed him to a plot of land being developed by a housing company. The plot was owned by a local Buddhist temple.

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The sky above, the mud below

Typical “morido” terrace formation for housing development

The disastrous mudslide that hit the city of Atami on July 3 brought attention to the term “morido,” which has no real equivalent in English, though some people might use “landfill.” In some cases, morido does qualify as landfill, but as it literally means “added soil” it has a wide variety of applications. In the case of the Atami mudslide, the consensus now is that the disaster was caused by an accumulation of soil at the top of a ravine that came loose during torrential rains and rushed down the ravine toward the sea, destroying dozens of houses along the way. The soil in question was apparently deposited there by a real estate company more than ten years ago, though it hasn’t been clearly explained what the purpose of the soil was. Media reports say that the company submitted a “report” to local authorities saying that they planned to build housing on the land, which they owned at the time, but the local government never properly checked the progess of this plan. Neighbors, however, startled by the succession of dump trucks that constantly came through to deposit soil on the site, contacted the authorities, who then “warned” the real estate company that it might be breaking the law. The company never responded to the warning and, in any case, there is no indication that they ever really intended to build anything on the “added soil.” Local regulations only permit soil accumulation of up to 15 meters, but just prior to the disaster it is estimated that the mound was 50 meters deep. The volume of soil, rock, and what is deemed to be industrial waste that flowed down the ravine is estimated to be 56,000 cubic meters. 

Some anti-solar (i.e., pro-nuclear) elements have pointed to the subsequent owner of the land as being to blame for the mudslide, since they cleared trees above the already existing mound and installed a solar farm. For sure, the clear-cutting removed some of the area’s water-retention capability, thus contributing to the disaster, but the solar energy company did not create the morido, and whatever the drawbacks of so-called mega-solar installations in terms of environmental impact, it appears that the company was operating within the law. The real estate company, which has since gone out of business, has yet to explain what the purpose of the mound was, but circumstances seem to point to it being a place to simply dump refuse and excavated soil, probably from construction projects far away. The local residents, for instance, said that the dump trucks all had Yokohama license plates. And then, of course, the industrial waste mixed in with the mud. This sort of problem is becoming more prevalent as construction continues undeterred with a dwindling number of places approved for refuse landfill. We’ve written about this before and the measures some contractors go to in order to find places to get rid of soil and other junk. 

Another kind of morido is that which is used to fill in valleys or create terraces on the sides of inclines in order to create level land for residential or agricultural development. As with all situations where soil is deposited on existing land, drainage must be assured by laying pipes within the mound of soil and the soil itself must be manually compacted so that it will not come loose. Unfortunately, even these measures may not be enough, though from what we’ve learned the main problem with this kind of morido doesn’t come from excessive rain but rather from earthquakes, which can cause the soil to shift, or, if it contains lots of ground water, liquefy. This happened throughout residential subdivisions affected by the 311 earthquake. Consequently, when we were shopping for land in 2012-13, we consulted topographical maps of the areas we were interested in in order to find out if a particular property was the result of morido. If it was, then we avoided it. We also avoided low-lying properties because of Japan’s problem with typhoons and heavy rains. But, in any case, morido is more prevalent than you might think, and most of it is perfectly legal, though not necessarily safe. That said, media reports have also said that the kind of morido that caused the Atami disaster is also very prevalent, despite the fact that it is illegal, so we can probably expect more of this kind of catastrophe. 

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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Dirty deeds done dirt cheap

Mound of dirt created after we had our septic tank installed.

In the six years we’ve lived in our house we’ve done some landscaping and in many cases were left with soil that had been removed from the ground. The contractor would always offer to dispose of the dirt for a fee, but we always had them dump it on the adjoining property, which is mostly covered with a bamboo grove. We know this is illegal, because it is not our land, but the plot, which is quite large, already has loads of dead wood and bamboo, and the amount of dirt we leave there is hardly noticeable. Besides, we’ve often helped ourselves to the soil we put there for gardening purposes.

But there is a real problem in Japan of where to put excavated soil resulting from large-scale construction projects. This week, Asahi Shimbun ran a fairly in-depth story that illustrates almost too perfectly this problem. Read More

Make Mine Maglev (2)

Section of maglev route, in red, that goes through Shizuoka

Right now there are much more serious matters on people’s minds than the maglev Chuo Shinkansen, or “linear motor car,” as it’s called in Japanese. Nevertheless, the train, which will spirit bodies from Tokyo to Nagoya in about 40 minutes, is set to become a major public works project that many in government and industry probably think could help revitalize the economy in the new post-pandemic “normal,” though no one has actually taken the time to publicly explain its role in such a brave new world. But one thing is for certain. It’s not going to be finished by its planned completion date in 2027. Actually, we never thought that was possible in the first place, but now it seems to be definite because the major media have said so.

Though there are actually a lot of reasons why the project won’t be completed on time, the only one the media is talking about is the governor of Shizuoka Prefecture’s refusal to allow construction to proceed on the 10-kilometer portion that passes through his bailiwick. Consequently, Heita Kawakatsu is the scapegoat for everyone who has a stake in the maglev. The governor of Aichi Prefecture, Hideaki Omura, is especially aggrieved, since the city of Nagoya is spending a great deal of money redeveloping the area surrounding the new maglev station. If it doesn’t open by 2027 everything will be screwed up fiscally. A think tank has estimated that the maglev will generate ¥2.3 trillion for Nagoya during the ten-year period after the station opens.

Kawakatsu’s gripe is about water, specifically the water supply for the 600,000 residents who live along the Oi River, which is 168 kilometers long. In 2013, JR Tokai, the company behind the project, carried out an environmental assessment that found construction of the tunnel through Shizuoka would result in a loss of ground water amounting to between 1.07 and 2.12 tons per second, equivalent to 17 percent of the river’s volume at any one time. Read More

Heirs? Apparently

This land is your land?: Property marker in the middle of a residential street

An ongoing headache for the government, in particular the land and justice ministries, is all the land in Japan whose titleholders are only vaguely determined. The reason this is a problem, of course, is that the central and local tax authorities don’t know to whom they should send property tax bills, but also when public works projects are being planned that involve the appropriation of land the relevant authorities don’t know whom to deal with. For a more detailed discussion of this problem see here, but suffice to say that the volume of property nationwide with undetermined owners amounts to a piece of land the size of Kyushu.

The reason for this confusion has to do with inheritance laws. When a title holder dies, if no formal transfer of the property has taken place, their property automatically passes to their heirs, meaning spouse first and then children. If those heirs never properly register the land in their names, then it then passes on to all their heirs when they die, and so on. According to a Nov. 18 article in the Nihon Keizai Shimbun, there is one piece of land—location undisclosed—that has up to 700 potential titleholders since the land has not been re-registered since the registered titleholder died many years ago. The amount of money and resuources needed to sort out these matters is beyond the ability of local governments. Of course, in most cases, the land is worth probably nothing to the family—maybe it’s on the top of a mountain or in a remote forest—and they simply don’t want to be taxed for it. However, a good portion is located in already developed areas. In any case, the local government or maybe a developer may want to exploit that land someday. The central government would like to have everything properly registered.

The Civil Code states that the titleholder must be consulted in order to dispose of the land or any portion of it, so if the government really wants to solve this problem it should amend the law, and that seems to be the plan. The Nikkei article says the government is now considering an amendment to the law that will allow the sale of plots of land or any portions of it if a certain number of heirs agree to the sale. At present, all titleholders must agree to such disposal. The land and law ministries plan to send this bill to the Diet in 2020, and are currently carrying out research that will better define vague property lines. As of 2017, about 16 percent of the land in 80,000 “locations” classifed as “urban,” meaning designated for residences and commercial businesses, does not have a definite titleholder in accordance with existing records. The portion of undetermined land is probably more, since the 16 percent mainly represents lots that are being disputed for some reason—either neighbors want to buy the land for expansion or local governments want to use it for parks and other public facilities or a developer wants to build a condominium on it. None of these entities have the money to negotiate with all the heirs, and according to most local laws any property line disputes have to be mediated through the consultation of surveyors and other experts, and those services have to be paid for by the parties involved.

On the surface, passing such a law should be easy. All the government has to do is specify the problem and how many of the identifiable heirs or titleholders must be located in order to dispose of the land. But because Japan has such a weak concept of eminent domain, it’s likely there will still be limitations to what the government can do unilaterally. And it’s apparent that people who have rights to a piece of land but are coy about being located have a reason for being coy. The main obstacle will be defining how much work should be involved in “notifying” all the interested parties. They must also determine if unpaid back taxes can be waived. One solution, according to Nikkei, would be a condition that the land in question must be sorted out within a certain timeframe due to health or safety concerns, and while that may sound like a limiting condition itself, the government has never been averse to bending such laws when it serves them.

Suckered

Recently, we were near Gotanda Station on the Yamanote Line and decided to check out an abandoned property that’s been in the news lately. This piece of land, which still has an old-style Japanese inn (ryokan) sitting on it unused, is about five minutes by foot from the station, overgrown with weeds and other vegetation. It covers 600 tsubo, or almost 2,000 square meters, and thus is worth a lot of money. Many developers would love to get their hands on it. One, Sekisui House, thought it had. Almost 2 years ago it signed a contract with a company that claimed it represented the owners, and Sekisui transferred ¥6.3 billion to the company before finding out that the company did not represent the real owners. Since then there have been arrests and stories in the media about this particular instance of jimenshi (real estate swindle), but so far the money itself has not been recovered, and some of the main players may have gotten away.

In the past few months, the story seems to have died down. When we walked around the property, which is surrounded by a deteriorating mortar wall and a makeshift fence, we came upon a dozen or more people assembled around a standing ashtray, smoking, on the street that lies between the property and the river, at the base of a bridge that crosses the river. At first we thought it was a strange place to put an ashtray since there weren’t any office buildings right there. These days, many companies don’t allow smoking in their offices and so employees who do smoke have to go outside. But then we realized that these people were not workers at nearby companies. Most seemed to be reporters who were hanging around just in case something happened at the property. Obviously, the story is not dead, though we had to wonder what the reporters were actually waiting for. Read More

Inzai as the future of Japan

New housing going up in the Inzai portion of Chiba New Town

It was a little odd to open the Japan Times this morning and find a feature about the city we live in, Inzai; odd in the sense that for as long as we’ve lived here whenever we tell people our address, in almost every case they’ve never heard of Inzai, which is the city just to the west of Narita in Chiba Prefecture. The article, written by Elaine Lies of Reuters, uses Inzai as a model for future growth in Japan, which is seeing its population shrink and age. For this purpose, the article compares Inzai’s situation with that of its neighbor to the south, Sakura, which is aging much more rapidly. The reason for Inzai’s good fortune is what Reuters sees as its aggressively pro-growth outlook. Inzai is one of the three cities that are part of the Chiba New Town development project, while Sakura is a typical suburban bedroom community that was developed in the 70s-80s during the lead-up to the Japanese bubble period. Though it includes some neighborhoods, like Yurigaoka, which was planned around an offshoot of the Keisei Main Line, that continue to attract young families, for the most part Sakura is made up of isolated housing subdivisions that no one is really interested in any more, probably because most of them are far from train lines. Inzai, on the other hand—or, at least, the part of Inzai that Reuters was covering—is built along the Hokuso Line, which also happens to follow Route 464, a major road that goes from the edge of Tokyo almost to Narita airport. In fact, the first item in the article that raised any eyebrows on our part was the factoid that says Inzai is 40 minutes from the airport. Actually, if you take the Airport Access train from either of Inzai’s two express stops, it’s only about 20 minutes, so we suspect the reporter got her information from someone who drives to Narita. As of now, 464 doesn’t reach as far as the airport. After it gets to the town of Sakae, you have to take back roads to get there.

And in a sense, this ironic lack of ready automobile access to the area’s most prominent feature is what makes Inzai less progressive than the article makes it out to be. Interestingly, Lies does not mention one feature of Inzai that the local government plays up constantly—that it has been named multiple times as Japan’s most livable city by the business magazine Toyo Keizai. The reasons have to do with things like affluence, green spaces, and convenience. Inzai’s tax base, as Lies implies, is quite sturdy owing mainly to the fact that new housing developments are booming along the 464 corridor. After we moved here in 2011, much of the land that had been put aside for the Chiba New Town project was opened up for development by UR, the semi-public housing corporation that managed the land. Because the land had been held for so long in the hopes that it would someday regain the value it had at the end of the 1980s (it never did), and UR was losing money in the process, the central government had for years been pressuring the corporation to liquidate it, and finally gave them a deadline. So they mostly sold it to developers and housing companies at prices far below those they’d paid, and all at the same time. The most valuable properties in the New Town area, those immediately adjacent to 464 and the Hokuso Line, were originally slated for commercial development, either for retail businesses or office buildings, and while Inzai did manage to attract a fair amount of commercial interests, it wasn’t nearly as much as Reuters seems to think. There are at least three shopping malls within 15-minute bike rides from our home and two of them are only half-occupied, despite the huge amount of residential development taking place. And as far as office buildings go, most were built two decades ago around the Chiba New Town Chuo Station. For the most part they are data centers for banks and other major financial institutions. Inzai is built on bedrock, so in the event of a major earthquake the records of these companies should be safe. As far as new commercial facilities go, the only things we’ve noticed is more logistics centers, which take advantage of Inzai’s proximity to Narita Airport. Read More

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.