The inability to sell or rent out vacant houses and condominiums is not just a concern for the owners. In many places it’s something that the community as a whole worries about, especially now with all the talk about the erosion of “kizuna” (bonds) and the attendant loss of community-mindedness, which may have been over-stated in Japan, but in any case the atomization of urban life is definitely on the increase. A neighborhood in Chiba Prefecture is actually doing something about the problem in an unusually proactive way.
In a section of Chiba City’s Mihama Ward near Kaihin Makuhari Station, residents have put together a non-profit organization called Chiba Regional Renovation Research, whose job is to rent out vacant properties at less than their market value as a means of “reinforcing communication.” The idea is not simply to find tenants, but to make the neighborhood more viable as a community. A recent article in the Tokyo Shimbun explained that collective housing in the area in question was developed by the prefectural and municipal governments in the 1960s, and now the apartments are superannuated and mostly occupied by elderly people. After last year’s earthquake, even more people moved out of the area over fears of liquefaction, which affected many coastal areas Chiba along Tokyo Bay. The NPO is made up of 107 condominium associations in the area. Their research found that out of 800 units, about 300 were empty. (The vacancy rate for all of Chiba Prefecture is about 15 percent) In most cases, the owners of the units didn’t live there and/or were unable to rent them out, but in some cases, the owners of the units could not be identified or located. Of those empty units whose owners were interviewed–245 in all–30 percent said they wanted to rent or sell but couldn’t, and in the meantime they have to pay monthly management fees and repair fund contributions, not to mention property taxes. Since many are retired, this is a big burden for them.
The condo associations formed the NPO because their membership is so diluted it has become difficult to formulate disaster and anti-crime countermeasures. The purpose of the organization is to act as a bridge between owners and potential tenants. For instance, by offering units for less than market prices they hope to attract students. They also think that some units could be used by younger families as collective daycare centers or leisure facilities for seniors. At the same time, they will promote renovations in terms of both safety and comfort, working with prefectural authorities and the construction ministry.
In 1941, 22 percent of all dwellings in Japan were owned by the people who inhabited them. By 1948, the portion had swelled to 48 percent in the cities and 67 percent nationally. Even before the war housing was at a premium, but thanks to the wholesale destruction of the Japanese archipelago during the final years of the war, it had become even more dear when the American occupation started. Inflation was rampant, and in order to make sure property prices didn’t spiral out of control a directive was issued in 1946 to freeze land prices and rents. It wasn’t the first time. Similar directives were issued in 1939 and 1940, but they were provisional. The 1946 directive was more open-ended, and the result was that landlords couldn’t raise rents. One of their countermeasures, at least in Tokyo, was to implement the now infamous koshinryo system: Every time the rental agreement expired, the landlord would charge the tenant an extra month or two worth of rent as a renewal fee. (This will be the topic of our next “Home Truths” column in the Japan Times on Tuesday) However, most landlords, unable to pass on maintenance costs, simply sold the properties to their tenants. Moreover, there was no incentive to build new rental properties, so construction companies started building houses for the few people who could actually afford to buy them. Ever since then, there have been more homeowners than renters in Japan.
The home ownership rate first peaked to 71 percent in 1958, then slid down to 64 percent by 1963 and 60 percent by 1968. The main reason is that more people migrated to cities for jobs. They couldn’t afford to buy houses, so more rental properties were built in urban and suburban areas. However, by this point home ownership became a national priority, since it spurred growth. With the population increasing and nuclear families replacing extended families as the household norm it wasn’t difficult for the government to promote home ownership through schems such as the Home Finance Law (1950), which made mortgages affordable; and the Public Housing Law (1955), which set up a government corporation to oversee the building of affordable rental properties in cities so that young families had a stepping stone to home ownership. The main problem is that in order to make home-ownership possible for the new generation of urban workers they had to be made relatively cheaply, since land prices have always been high. In other words, the houses themselves weren’t meant to outlast their mortgages. Read More
Housing complex along Sumida River run by Tokyo-to
There are two types of public housing available in Japan. A national public corporation called UR runs semi-public housing whose rents are pegged to property values. Meanwhile local governments at the prefectural and municipal levels provide housing for low-income families and individuals. Last week, the Asahi Shimbun surveyed this latter category among Japan’s 47 prefectures and 19 major cities. The newspaper found that 1/3 of these entities planned to reduce the number of units of low-income housing in the future.
In fact, the only two local governments who said they planned to increase low-income public housing was the prefecture of Okinawa and the city of Sagamihara in Kanagawa Prefecture. Everyone else said they either would keep the number they already have, or had not made any plans at all.
The governments who said they would decrease public housing stated as their main reason the declining population. The second most common reason was difficulty in securing funds for maintenance of existing housing. Two prefectures said they were planning on rebuilding their housing facilities, since the bulk of low-income public apartments were built in the 60s and 70s. When they carry out the reconstruction work, they will probably reduce the number of units per building. Another reason that wasn’t mentioned as often but certainly had a significant impact is the fact that subsidies for public housing from the central government have dropped by 40 percent in the past ten years. Read More
This baby’s only 40 years old!
Japan will shortly start paying for its shortsighted housing policy with a depressed real estate market that will probably never recover, according to findings by Nomura Research Institute. If the depreciation of home values continues at its current rate and the number of new home construction is the same as it was in 2003 (1.2 million units), then the vacancy rate for all dwellings in Japan will be 43 percent in 2040. And even if new home construction is halved over this period of time, the vacancy rate in 2040 will be 36 percent.
Of course, that’s a completely hypothetical situation and probably doesn’t reflect what will really happen since in 2015 it’s projected that the total number of households in Japan will start to decline. In 2008 there were 50 million households in Japan and 57.5 million housing units, meaning that the vacancy rate in that year was 13 percent. Read More