Sa Japan, gamay ra kaayo ang populasyon kay daghan hapon wala ma minyo. Tungod ani,daghan pud balay na bakante na pwede ra rentahan. Kung moadto kag Japan mas maayo na manarbaho gyud ka isa or duha ka tuig. dayun pwede pud ka makautang sa bangko, pwede pud nimo paliton imo gi rentahan na balay pinaagi sa pag utang sa bangko, dayun

kung ma ka luag naka, pede na pud kamag utang sa bangko og balay dayun pa rentahan napud nimo para mahimong negosyo nimo.Mas maayu gyud sa Japan ang magpalit kahg lote og balay pa rentahan nimo pinaagi sa pag utang sa bangko.

https://fudousanbaikyakuguide.org/ieul-2/

Chapter 1

Introduction

It is very common to see many abandoned house in Japan. These ghost homes are the most visible sign of human retreat in a country where the population last a half-decade ago and is forecast to fall by a third over the next 50 years. The demographic pressure has weighed on the Japanese economy, as a smaller work force struggles to support a growing proportion of the old, and has prompted intense debate over long-term proposals to boost immigration or encourage women to have more children.

Many of Japan’s vacant houses have been inherited by people who have no use for them and yet are unable to sell, because of a shortage of interested buyers. But demolishing them involves tactful questions about property rights, and about who should pay the costs. The government passed a law this year to promote demolition of the most dilapidated homes, but experts say the tide of newly emptied ones will be hard to stop.

The essential problem is that buildings don’t hold their value that is why people don’t maintain the houses. But since they don’t hold value, it costs more to tear them down than they worth, so they don’t get torn down when the land isn’t being used. When they do get torn down and replaced, people cut corners because buildings don’t hold their value. When buildings are cheaper to tear down and replace, people don’t build to last, and they don’t maintain them, so they don’t hold value.

The number of residential property for decreased to 310,000 from 350,000 of former survey. It has decrease by 40,000 houses. The number of residential property looking for renter has increased from 4,120,000 to 4,290,000. It has increased by 170,000. The number of houses that owner has another residential houses are 410,000. It is same as former survey. The number of houses that are not included in mentioned above has increase from 2,700,000 to 3,200,000. It has increased by 500,000.

Statement of the Problem

Since the problem rooted due to the short term payable loans, the citizens focused on working too much and forget to earn for marriage. The researcher aims to resolve the abandoned house problem in Japan as observed by the people living in the community through selling or keeping it. To make clear the inflexibility of investment lending in Japan and show that if a degree of flexibility like the current one of home lending in Japan were introduced for investment lending, then the real-estate market would revive and, by extension, the Japanese economy would revive as well

Theoretical framework

  This study intends to make clear the causes of this short-term growth in Japan’s economy and the return to a sluggish economy as well as primary factors in economy recovery, from looking at the real-estate loan system. Japan experienced first-time economic growth during the postwar period. Since the collapse of the bubble economy of the 1980s Japan’s economy has remained sluggish.

Conceptual framework

The problem of the abandoned houses in Japan had been studied long time ago. However, this didn’t make any change. The researcher would want to propose the concept of home loan which will last for 30 years or more, unlike the usual 10 years. This is believed to be a way to help decrease the number of abandoned houses in Japan, as the owners will stay in their homes while paying less to their property and enjoying bigger portion of their salary.

Significance of the study

Japan is a country that cannot afford to let space be wasted. It only makes sense that there should be eminent domain laws to get rid of derelict properties and reclaim to land so everyone has more breathing space. If the power and sewage has been off for more than three years and the building is functionally obsolete (30+ years old), tear it down and ask questions later.

The Japanese government provides financial assistance to people living in public housing which is constructed by local municipalities. Public housing rent is also lower than market rents. However, the country’s local municipalities are facing severe budget conditions and spending on new public housing (as opposed to renovating existing vacant homes) would put more pressure on their budgets.

This study is believed to make clear the forms that real-estate lending should take in other countries by enabling them to learn from the real-estate market the primary factors behind the short-term growth and failure of Japan’s economy. It is also believed that taking responsibility to the nation’s problem would help the economy of the country.

Scope and Limitation

This study aims to provide an alternative in solving the growing numbers of abandoned house in Japan. This includes the presentation of the ideas of its advantages and disadvantages, the probable result in the future, its difference from the previous strategy that the government used, and of course the introduction of the real-estate program. It is limit only in providing the probably solution of the problem and explain the concept of the idea. The presentation of the survey will only limit on how many respondents responds to the poll question via online.

Definition of Terms

Ghost homes– these are houses abandoned by the families where the spirits of                                           the family member died in that house

demographic pressure– Pressures deriving from four sources: high population                                    density relative to food supply and other life-sustaining resources;                                           group settlement patterns that affect the freedom to participate in                                        common forms of human and physical activity, including economic                                productivity, travel, social interaction, religious worship, etc.;                                                 settlement patterns and physical settings, including border disputes,                              ownership or occupancy of land, access to transportation outlets,                                      control of religious or historical sites, and proximity to                                                             environmental hazards; and skewed population distributions, such                                    as “youth or age bulge,” or from divergent rates of population                                   growth among competing communal groups.

Demolish- It means to destroy or ruin (a building or other structure), especially on                         purpose.

Dilapidated homes- A house that is fallen into a state of disrepair or deterioration,                         as through neglect; broken-down and shabby.

Depreciate- It means to lower the price or estimated value of the property and to                                        deduct from taxable income a portion of the original cost of (a                                                 business asset) over several years as the value of the asset decrease.

Real-estate market-It refers to the medium that allows buyers and sellers of the                              property consisting of land and the buildings on it, along with its                               natural resources such as crops, minerals or water; immovable                                                property of this nature; an interest vested in this (also) an item of                                real property, (more generally) buildings or housing in general to                                  interact in order to facilitate an exchange.

Sluggish economy- A state in the economy in which the growth is slow, flat or                                 declining. The term can refer to the economy as a whole or a                                                   component of the economy, such as weak housing starts. Sluggish                                         economies left to themselves may become recessions, as consumers                                      and investors cut back on buying activity out of fear of tough                                                   economic conditions, leading to further slowdowns.

Home loan- A sum of money borrowed from a financial institution or bank to                                  purchase a house. Home loans consist of an adjustable or fixed                                  interest rate and payment terms.

Investment loan- An investment loan allows you to borrow to invest using                                                      accepted shares, managed funds and cash investments as security                                          and provides you with the opportunity to invest more than you could                     using your own money, thereby increasing your potential for higher                                  returns. The amount you can borrow depends on the investments                                      you provide as security. Each investment we accept as security has a                                         borrowing limit, which is the percentage of the investment’s value                                        that you can borrow.

Chapter 2

Review of Related Literature

Vacant houses pose a problem

The number of vacant houses improperly managed is increasing as the nation grows grayer and some areas experience depopulation. Many problems plague vacant houses as they fall into disrepair, including arson and other crimes, blight and safety issues. In 1988, there were 3.95 million vacant houses across the nation. The number increased to 7.57 million in 2008, or 13 percent of the total number of houses. Of these vacant houses, 1.73 million are wooden.

Many local governments have established by-laws in an effort to try to prevent problems involving vacant houses, including by-laws that strongly urge owners to properly manage their properties. But in many cases, owners live far away from the vacant houses they own and they fail to take sufficient steps to remedy the situation. Therefore the central government must provide concrete assistance to local governments that are struggling to deal with this problem. The assistance should be given on an individual basis because the problems municipalities face vary from case to case.

If vacant houses deteriorate to the point where they pose a danger to other people, municipalities can tear them down as execution by proxy under a provision of the Building Standards Law. More than 200 local governments have enforced by-laws to deal with problems of vacant houses as of April 1 — more than 10 percent of Japan’s prefectural and municipal governments. Many of them want to prevent vacant houses from posing a danger to local residents.

A by-law of Daisen City in Akita Prefecture is aimed at preventing roof tops of vacant houses from injuring people due to heavy snow or storms. If the city finds that vacant houses are likely to pose a danger, it will tell the owners to repair them. If they do not comply, the city will carry out the repairs and demand that the owners pay the cost. A by-law of Tokorozawa City in Saitama Prefecture empowers the city government to tell owners of vacant houses to carry out necessary repairs but stops short of empowering the city to do the repairs. The Tokorozawa by-law takes into account the fact that owners of vacant houses in the city, which is near Tokyo, can find buyers rather easily. A by-law of Kyoto City is rather mild and only strongly urges owners of vacant houses to rent or sell them. This is a rather practical approach as it would increase the financial burden shouldered by local governments if they have to repair or tear down vacant houses.

Local governments can experience difficulty in trying to identify house owners by checking property tax records. If the municipality tax section discloses this information, it is considered to be a violation of the duty of confidentiality. The central government should consider revising the Local Tax Law to help local governments identify owners of vacant houses.

One of the reasons for house owners not tearing down their vacant houses is that property tax for owning a vacant house is lower than the same tax imposed on empty lots. The central government should consider equalizing the tax burden to eliminate this disincentive. The central and local governments also should consider how to best promote the leasing or sale of vacant houses. (http://www.japantimes.co.jp/opinion/2013/09/06/editorials/vacant-houses-pose-a-problem/#.WVTUuJIrLMw)

Abandoned Buildings Still House Problems

Japan’s vacant house problem will become worse before it becomes better. According to government estimates there are 8 million residences in Japan with no one living in them, a number that Bloomberg reports will increase to 20 million by 2033, representing a third of all the homes in Japan. A good portion of these residences are abandoned. There are no plans for anyone to live in them ever again, a prospect that alarms the central government, as it should. Abandoned homes are firetraps. Often they are filled with garbage that breeds vermin and surrounded by overgrown vegetation. Unmaintained sewage systems and septic tanks can spread disease. They are eyesores that diminish surrounding property values.

For that reason, the central government implemented a law last year that allows for the designation of certain properties as abandoned houses (akiya) and outlines steps for them to be destroyed. The law gives local governments the authority to make the designations, after which a notice is sent to the owner of the property demanding that he or she remedy the situation and stating that if nothing is done within a certain period of time, the special property tax cut for residences will be rescinded. Normally, land for residential use that contains a structure is taxed at only one-sixth the normal rate, and the structures themselves at one-third the normal rate. So if owners ignore the akiya notice, they will be charged the full 100 percent rate on all property taxes, national and local. Then, if the owner still does nothing, after a certain period of time the local government will have the authority to tear down the house and send the bill to the owner.

Though this sounds simple enough, it is difficult to carry out. In many cases it is almost impossible to determine title to some properties owing to the fact that the person whose name is on the deed has died. In such a situation, the heirs to the property will have to be tracked down and if there is more than one, each person must be contacted and notified of the akiya designation before any action can proceed. This, in itself, can be an expensive undertaking and many local governments don’t want to do it.

To make things easier, some local governments provide subsidies in order to encourage property owners to tear down abandoned buildings. For instance, Kasama in Ibaraki Prefecture will cover one-third of demolition expenses up to ¥300,000. Toyohashi in Aichi Prefecture will pay up to two-thirds the cost of demolition when the expense is over ¥200,000, but only for wooden houses. In Minami Aizu, Fukushima Prefecture, you can receive a demolition subsidy of up to ¥800,000 if you do not pay any local taxes due to low income, or up to ¥500,000 if you are eligible for local taxes. Tokyo, as well as most other major cities, offers no demolition subsidy.

The process of tearing down a house is called kaitai, and some companies specialize in such a service. There are various portal sites on the internet that list these companies on a regional basis, with examples of jobs that give property owners an idea of what the cost may be. On one site we found an outline of a job for a house in Mitaka, Tokyo. The floor area of the house was 33 tsubo (about 100 sq. meters), and the cost of dismantling was set at ¥25,000 per tsubo. In addition, the property had a 33-meter-long cinder block wall that cost ¥2,500 per meter to take down, and a shed that cost ¥15,000 to remove. The disposal of various appliances on the property cost ¥30,000. Additional costs covered the use of special machinery (¥100,000) as well as scaffolding and other equipment to keep the demolition work contained (¥81,600). After a discount was applied, the total cost of the job came to ¥1,260,000.

Additional costs include removal of septic tanks and underground pipes, as well as refuse disposal. After the house is torn down, the kaitai company must get rid of everything. Such companies must be issued certificates to recycle construction materials, and they will definitely pass on the cost to the customer and maybe add a surcharge.

If you’re looking to knock down a building, as with any large job, it’s best to shop around in order to find the best price. In order to do that, however, a representative of the company has to visit the structure to be torn down. The owner should be there during the inspection in order to pin the contractor down on an estimate and make sure they explain every detail of the job. At the same time, the owner should talk to their neighbors so that they understand that this kind of work, which can be noisy, is going to take place.

After the contractor is chosen, the local government must be informed of the work at least one week before it commences if the size of the structure being demolished is more than 80 sq. meters. The contractor will normally handle the paperwork, including permits for recycling refuse and using public roads in case the property doesn’t have enough space to park vehicles and equipment. In addition, electrical and gas utilities should be informed, and if there is a septic tank that is going to remain it should be cleaned before work begins. Waterworks should remain turned on since demolition requires water to keep down dust.

First, the contractor will erect scaffolding and hang tarp so that dust and debris don’t escape. Then workers rip out walls and floors, and after that the frame is dismantled. All refuse is sorted by hand. Some local governments also mandate that the soil be checked for contaminants and cleaned if any are found. After all the refuse is carted away, the contractor will level the ground.

When demolition and removal is complete, the owner must report the work to the local branch office of the Ministry of Justice so that the structure can be removed from maps and other registries. If this isn’t done within a month after the work is finished, the owner will be fined. Notaries can do this work as proxies for a fee. ( Philip Brasor And Masako Tsubuku)

SEP 25, 2016

Kansai uses subsidies to fill empty homes, but persuading aging population to pull up stakes remains a challenge

Some central Japan prefectures and even cities like Kyoto and Nara are increasingly adopting measures to reduce the number of vacant homes, including via subsidies for owners. ( Eric Johnston)

JAN 21, 2016

Japan to set target for curbing rise in abandoned houses

The government will work to keep the total number of abandoned houses and apartments in Japan at around 4 million or fewer by fiscal 2025 amid projections it could spiral to as much as 5 million. The target is included in a new 10-year. (http://www.japantimes.co.jp)

MAY 27, 2015

Law to allow razing of abandoned dwellings seen not going far enough

Tuesday’s enforcement of a law allowing municipal governments to order the demolition of hazardous vacant houses has sparked concern among local groups and activists who say the legislation is not enough to address the growing problem, while communities have been working to demolish empty. (http://www.japantimes.co.jp)

MAY 26, 2015

Law for forced demolition of derelict houses takes effect

A law that allows municipal governments to order the demolition of unoccupied, dangerously derelict houses goes into force as the number of empty homes in Japan soars. (http://www.japantimes.co.jp)

AUG 2, 2014

Japan to reduce unsafe abandoned houses by cutting tax breaks

The government will review fixed property tax breaks for housing land to reduce abandoned houses that are rapidly increasing in number across the country due to the shrinking population, informed sources said. Decaying houses will be disqualified from the tax incentives once they are. (http://www.japantimes.co.jp)

Japan Is Filled With Vacant Houses As the Population Shrinks

Unlike Detroit, which will run out of cash next month, Japan prints its own money, so bankruptcy in the Detroit sense is not in the cards. But they do have two things in common: depopulation and a ballooning stock of abandoned houses. For Japan, it’s an issue that even the most prodigious money-printing binge cannot resolve. These decrepit buildings dot neighborhoods in surprising places. There was one just down the street from our apartment building near the South Korean embassy in Azabu-Juban, Tokyo. Not a cheap neighborhood. It was a diminutive wooden building, turned black with age and soot. In places there was rusted sheet-metal siding. The roof was made of rust-perforated corrugated iron. The tiny garden had morphed into a thicket of weeds.

I saw numerous such places. Sometimes they were incongruously wedged between groomed buildings. Other times, they were in rougher areas. Sometimes they were larger buildings. Further out, a neighborhood might be dotted with these pockmarks. Japan isn’t the only place with blight. But the sheer quantity of abandoned houses in Japan is stunning – and has been getting worse at an accelerating clip.

Now the government wants to do something about it. But unlike the stock market, which can be goosed by the intoxicating vapors of money-printing promises, the real economy is tougher to deal with, and housing stock, when the population is declining and shifting, is even tougher.

The Ministry of Internal Affairs and Communications surveys vacant houses every five years, splitting them into two categories: houses that could be rented, sold, or used as secondary houses; and abandoned houses. Over the fifteen years from 1993 to 2008, according to the most recent survey, total vacant houses ballooned by 72% to 7.57 million. They made up 13.1% of all houses nationwide, the highest proportion ever. Vacant but still usable houses increased by 63% to 4.88 million. And abandoned houses jumped by 91% to 2.68 million. It’s not just in small towns suffering from depopulation, as the young migrate to urban centers. Over the decade through 2008, the number of abandoned houses in Tokyo jumped 60% to 190,000; and in Osaka 70% to 180,000! That was in 2008, before the financial crisis slammed into the housing market. Since then, the abandoned-house phenomenon has gotten worse.

Many of these structures were cobbled together during the postwar decades into the 1970s, “one-generation buildings” designed to last 30 years. While land is considered valuable, much of that value has been wrung out of it over the last 20 years. And buildings are considered an expense; they become worthless over time and have to be torn down – another expense – to be replaced by an even greater expense.

During my first foray into Japan in 1996, I stayed in a rundown apartment in a four-story building from the 1960s, in a dreary area in Ekoda, Tokyo. In 2004, I went back to check on it. It was gone. A train line had been built under the main street. The entire area had been razed. New mid-rise buildings had sprouted up. The commercial center was around the spotless station. And there was a tiny gleaming Citroën dealership, Urban renewal, the hallmark of big Japanese cities. It never stops.

But it can’t keep up with the growing fiasco of abandoned houses. There are reasons. The structure of the Japanese family has changed, with kids moving away. They might have no interest in the house. Or heirs might not have the money to maintain it. Selling a property like that in a market with a declining population and with plenty of newer houses is tough. Municipalities want owners to tear down these houses, but often they can’t find the owners. And owners are reluctant to tear them down; to continue receiving the tax benefits, they’d have to build another house on the property. Expense after expense!

It has gotten so bad that the Land Ministry has changed its stance on unoccupied houses: before, it would only allow local governments to tear them down in areas of depopulation. As of this month, it will allow all municipalities to tear them down anywhere, but warned that they might get sued by the owner if they razed a house under administrative subrogation. And to motivate owners to tear down their house, the central government and municipalities will cover 80% of the costs!

The abandoned-house phenomenon illustrates how the real economy gnaws relentlessly on Japan. It has nothing to do with interest rates, liquidity, and the value of the yen: there simply aren’t enough people to fill any of the 7.57 million vacant homes. Next year, there will be even fewer people and more vacant homes.

For foreigners, piling into this market is unappetizing: with Abenomics hell-bent on devaluing the yen, their investment is destined to lose value. So now the solution is to raze these houses across the nation, largely at the expense of a government that is already up to the nose in debt and can only stay afloat because the Bank of Japan has promised to print whatever it takes – that’s how far Japan has boxed itself into a corner.

The status of the US dollar as the world reserve currency gives the US tremendous advantages. Among them: it allows the Fed to export inflation, while the Federal Government can run a huge deficit with impunity. But now an angry Russia has had enough! (Wolf Richter and Testosterone Pit)

A Sprawl of Ghost Homes in Aging Tokyo Suburbs              

YOKOSUKA, Japan — Ever since her elderly neighbor moved a decade ago, Yoriko Haneda has done what she can to keep the empty house she left behind from becoming an eyesore. Ms. Haneda regularly trims its shrubs and clips its narrow strip of grass, maintaining its perfect view of the sea.

The volunteer yard work has not extended to the house two doors down, however. That one is vacant, too, and overgrown with bamboo. In fact, dozens of houses in this hillside neighborhood about an hour’s drive from Tokyo are abandoned.

“There are empty houses everywhere, places where nobody’s lived for 20 years, and more are cropping up all the time,” said Ms. Haneda, 77, complaining that thieves had broken into her neighbor’s house twice and that a typhoon had damaged the roof of the one next to it.

Despite a deeply rooted national aversion to waste, discarded homes are spreading across Japan like a blight in a garden. Long-term vacancy rates have climbed significantly higher than in the United States or Europe, and some eight million dwellings are now unoccupied, according to a government count. Nearly half of them have been forsaken completely — neither for sale nor for rent, had they simply sat there, in varying states of disrepair.

These ghost homes are the most visible sign of human retreat in a country where the population peaky a half-decade ago and is forecast to fall by a third over the next 50 years. The demographic pressure has weighed on the Japanese economy, as a smaller work force struggles to support a growing proportion of the old, and has prompted intense debate over long-term proposals to boost immigration or encourage women to have more children.

For now, though, after decades in which it struggled with overcrowding, Japan is confronting the opposite problem: When a society shrinks, what should be done with the buildings it no longer needs?

Many of Japan’s vacant houses have been inherited by people who have no use for them and yet are unable to sell, because of a shortage of interested buyers. But demolishing them involves tactful questions about property rights, and about who should pay the costs. The government passed a law this year to promote demolition of the most dilapidated homes, but experts say the tide of newly emptied ones will be hard to stop.

“Tokyo could end up being surrounded by Detroits,” said Tomohiko Makino, a real estate expert who has studied the vacant-house phenomenon. Once limited mostly to remote rural communities, it is now spreading through regional cities and the suburbs of major metropolises. Even in the bustling capital, the ratio of unoccupied houses is rising.

Yokosuka is on the front lines. Within commuting distance of Tokyo and close to naval bases and automobile factories, it attracted thousands of young job-seekers in the era of roaring economic growth that followed World War II. Land was scarce and expensive, so the newcomers built small, simple homes wherever they could.

Today the boom is relentlessly reversing itself. The young workers of the postwar years are now retirees, and few people, their children included, want to take over their homes. “Their kids are in modern high-rises in central Tokyo,” Mr. Makino said. “To them, the family home is a burden, not an asset.”

Japan’s birthrate has been stuck below the level needed to maintain the population since the 1970’s, as young people postpone marriage and many women put off having children as they enter the work force.

The city of Yokosuka is trying to change that, by encouraging owners of abandoned houses to tidy them up and put them on the market. It has established an online “vacant home bank” to showcase houses that commercial real estate agents will not touch. Land prices in Yokosuka are down by 70 percent since their peak at the end of the 1980s.

The houses are a steal for the rare souls who will have them. But just one has been sold through the home bank so far, a 60-year-old single-story wooden home with a patch of garden that was listed for 660,000 yen, or $5,400. Places farther up the hill can be had for the equivalent of just a few hundred dollars. Four have been rented, including one to students in a nursing-care program at a nearby college who receive a discount in return for checking up on elderly people in the area.

Other towns have tried their own creative solutions, including offering cash payments to outsiders who move in and buy unoccupied homes. A few have succeeded in attracting pockets of artists and freelance workers, who stay tethered by the Internet to their urban clients.

There is even a sprawling art project, the Echigo-Tsumari Art Field, which has taken unoccupied buildings in a cluster of towns northwest of Tokyo and turned them into contemporary artworks. Visitors can spend the night in a “Dream House” designed by the performance artist Marina Abramovic, with coffin-like beds and tinted lights designed to elicit dreams, or tour other buildings that have been intricately carved, painted or filled with sculptural installations.

“They may not be used for their original purpose anymore, but preserving them physically is important,” said the project’s founder, Fram Kitagawa. “The key is to preserve them in a positive way.”

Raw numbers suggest there is a limit to how many homes can be rescued through reuse, however. Japan’s population of 127 million is expected to drop by a million a year in the coming decades. Efforts to increase its low birthrate have been only modestly successful, and the public has shown no appetite for mass immigration. “We have too much infrastructure,” said Takashi Onishi, an urban planning professor and the president of the Science Council of Japan. The government, he believes, will eventually have to cut services like water and road and bridge maintenance in the most depopulated areas. “We can’t maintain it all. We’ll have to make those hard choices.”

The most blunt solution for abandoned houses is to tear them down before they become hazards or their neighborhoods earn an irreversible reputation for blight. But owners can be hard to track down, and are often reluctant to pay demolition costs.

The house that Ms. Haneda tends is owned by the family of Mioko Utagawa, 74, who lives a 10-minute walk down the hill. Ms. Utagawa’s husband bought it for an aunt in the 1970s after she divorced and moved here from Tokyo. Now she is in a nursing home. The family has been paying her modest property taxes but has otherwise left the house alone. The interior is a musty wreck; a small addition that once housed the bath has been ripped out, and the bathtub sits upturned on the faithfully manicured lawn.

“Even if we fixed it up nobody would want it,” Ms. Utagawa said.

The Utagawas recently agreed to have the house demolished, after the city offered to subsidize the estimated 3 million yen cost, under a municipal program introduced last year to deal with hazardous or hopelessly unsellable homes. It is scheduled for destruction this fall. Noriyuki Shima, the director of the city’s planning department, said cost considerations meant the city was targeting only the worst-affected neighborhoods.

“Giving public money to demolish a private house isn’t something we can do lightly,” he said.

The new national law, which came into effect in May, could help more municipalities cull their vacant houses. Among other changes, it removed a perverse incentive that has contributed to the problem. A tax break introduced decades ago to encourage home construction sets property tax rates on vacant lots at six times the level of those on built-up land. That means that if an owner demolishes a home, the tax rate soars — a big reason many let even crumbling houses stand.

Now the government can revoke the preferential tax treatment for houses whose absentee owners are letting them fall apart. But some critics say Japan needs a more fundamental shift in its approach to housing, which has long prioritized new construction over reuse.

Hidetaka Yoneyama, a housing specialist at the Fujitsu Research Institute, a think tank, said that until recently, homes in Japan were built to last only about 30 years, when they were then expected to be torn down and rebuilt. Building quality is improving, but the market for secondhand homes remains tiny. Developers are still building more than 800,000 new homes and condominiums a year, despite the glut of vacancies.

“In the high-growth era, everyone was happy with this arrangement,” Mr. Yoneyama said. But in 20 years, he calculated, more than one-quarter of Japanese houses could be empty. “Now the tables are turned. The population is declining and no one wants to live in these old houses.”( Jonathan Soble , Aug. 23, 2015)

What the U.S. Needs to Know About Japan’s Vacant Property Crisis

Any way you measure them, Japan’s population figures are dire. The country is expected to lose more than one-third of its population by 2060, thanks largely to low birth rates and an aging populace. In 2012, according to Japan’s Statistical Yearbook, the country’s annual death-to-population ratio passed one percent. This isn’t astoundingly high: the U.S. Central Intelligence Agency’s World Factbook ranks Japan’s death rate (the deaths during a year per 1,000 populations) at 54th out of 225 countries. But the trouble comes when you factor in the fertility rate: Japan currently has the third-lowest recorded birth rate in the world.

All of this has already had a profound effect on Japanese housing. Between the mid-1990s and 2013, the number of vacant or abandoned properties in Japan doubled. These neglected structures now make up an estimated 13.5 percent of the country’s housing stock. The phenomenon of abandoned Japanese homes is so widespread that people have begun writing poetry about it. When the Tokyo Association of Housing and Land Investigators put out a call for satirical haikus on the topic, it received 4,000 responses. “Where we were born, vacant houses gather, for legacy’s sake,” read one. “Watch out! Earthquakes and Thunder! Burning Vacant Homes,” read another.

It’s as though the entire country is facing a U.S. Rust Belt-style population problem. “Tokyo could end up being surrounded by Detroits,” one Japanese real estate expert told The New York Times in August. And like some Rust Belt cities, Japan has taken to dealing with it through legislation.

Passed in May 2015, Japan’s newest Vacant Housing Law is similar to moves in some shrinking U.S. cities that give government more latitude to enforce code violations and tear down structures that have become blighted and potentially dangerous. But the Japanese law’s real innovation, according to Peter Manda, a New Jersey-based fraud investigator with EY (formerly Ernst & Young) who’s working toward an advanced international law degree at Boston University, is its focus on creating a database that not only identifies vacant properties and their owners, but also helps bring those properties into public use.

In the current edition of Cityscape, the journal of the U.S. Department of Housing and Urban Development, Manda analyzes Japan’s Vacant Housing Law with an eye toward the U.S. experience.

“They’re not just going in and razing the properties,” Manda tells CityLab. “They’re also turning these properties into municipal buildings and affordable housing.”

“What happens in 20 years when there aren’t any more seniors in the community?”

Here’s how it works: In Japan, local municipalities are authorized by the country’s national government to create councils that keep track of properties showing signs of possible abandonment. Those councils then report vacant properties to national tax authorities, who hand over ownership data and log the information into a national database. That database tracks where the vacant properties are located, and whether any progress has been made to remediate. If no progress is made after the councils notify owners what needs to be done, fines are levied. If the owners are unable to remediate—or they can’t be located at all—the councils then have the right to demolish or refurbish the properties as long as that use is approved by the national government for, as Manda puts it, “cultural, social, or governmental purposes that are predefined in an approved smart growth-oriented response plan.” In addition to fines, a national tax funds the whole process.

It’s too early to say whether Japan’s program is a success—or whether municipalities might face accusations of unfair practices in targeting certain properties—but the model is sound, Manda says. The national scope is what makes the program novel and, if the U.S. is smart, it will follow Japan’s lead. As Manda sees it, Japan’s vacant housing problem foreshadows what the U.S. could soon face.

The Census Bureau projects that the United States’ overall population will grow by about 31 percent over the next 45 years. But dig into those projections and you’ll find that the increase hinges in large part on immigration: nearly 15 percent of the people contributing to the increase from 2010 to 2060 are expected to be foreign-born. The Pew Charitable Trusts puts that number even higher. If the nativist rhetoric of the Republican presidential campaign extends beyond the primaries, the Census bureau and Pew might want to reconsider their estimates.

“Given the current political climate,” Manda writes, “it could well be that decision-makers will prefer a more restrictive immigration policy.”

According to the U.S. Government Accountability Office, vacant and abandoned structures currently make up about 8 percent of U.S. properties. But as Baby Boomers—who are about 80 million of the country’s 319 million people—come to the ends of their lives in increasing numbers, the U.S. death-to-population ratio could easily match the level Japan reached in 2012. Figures like these should encourage U.S. stakeholders to think more seriously about how they’re planning for a post-Baby Boom future, Manda says.

“If you’re going to be a non-profit and say, ‘Oh, wow, we could get grant money to build a senior home,’ and then build a senior home, what happens in 20 years when there aren’t any more seniors in the community because all of them have died off? What are you going to do with that senior home?” he asks. “These are the kinds of things we need to start thinking more about. There are communities that design buildings such that they can convert homes to other uses at some point—that needs to go into the whole planning process a little bit better.”

In his Cityscape article, Manda puts the goals for U.S. housing policy into context. “A response to the shifting demographics of a rapidly expanding elderly population and contracting younger population that includes planned, focused, and proactive policies must nevertheless include a ‘what then?’ calculus,” he writes. “By including the ‘and after death?’ question into housing policy, policymakers can make the tough optimization choices necessary to spare the next generation the costs of dealing with a national blight problem similar to the one currently experienced in Japan). .” (Matt Stroud, Dec 31, 2015)

TO TURN JAPAN’S ABANDONED HOUSES INTO QUASI-PUBLIC HOUSING

January 18, 2016

The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has announced that it plans to introduce measures to convert the growing glut of vacant and abandoned houses in Japan into quasi-public housing.

According to the MLIT, in 2013 there were 8.2 million vacant houses throughout Japan, a 24.4% increase compared to 2003. This is about 13.5% of the entire residential stock and a much higher percentage than for other countries. Without new measures, Nomura Research Institute has estimated that 21% of all residential buildings will be abandoned by 2023.

The MLIT sees a number of potential positive effects from turning this large stock of abandoned homes into quasi-public housing, including renting them out to low-income families with children. The MLIT is also considering providing direct rent subsidies to help these low-income households with children.

Also, with Japan’s public finances already stretched the MLIT projects that converting abandoned houses into quasi-public housing will be less expensive than spending on new infrastructure.Once the MLIT finalizes the details of the legal framework, it aims to put the proposed law before the 2017 ordinary Diet session.

Currently, the Japanese government provides financial assistance to people living in public housing (which is constructed by local municipalities). Public housing rent is also lower than market rents. However, the country’s local municipalities are facing severe budget conditions, and spending on new public housing (as opposed to renovating existing vacant homes) would put more pressure on their budgets.

The MLIT hopes to kill two birds with one stone: To assist low-income families with children by offering them quasi-public housing and to lower construction costs that have to be paid for by local municipalities.

It should be noted that there is currently a shortage of public housing, in general, not just for families with children. In 2013, nationwide there were about 2,160,000 public housing units, but as mentioned above, due to tight public finances, this number is unchanged from the number recorded in 2003.

The MLIT envisions that the elderly could also move into these new quasi-public housing residences.

The MLIT states that the framework for converting abandoned homes into quasi-public housing will work as follows:

• Vacant abandoned apartments and detached houses in the private sector that meet earthquake-resistance, sound-proofing, and other building standards qualify to be designated by the national government as suitable for quasi-public rental housing.
• The national and/or local government will do any additional necessary renovation or construction and local governments may directly administer and operate this housing.
• Because these residences will have construction quality standards mid-way between private rental housing and full public-housing, they will be designated as “quasi-public housing”.
• The government will also provide rent subsidies so that the net rent paid by residents will be less than for equivalent private sector housing.

Local municipalities will ultimately decide which families qualify to move into quasi-public housing. The MLIT projects that households that have incomes of up to less than 25% of the average income of all households would qualify. The 25% mark is equivalent to income of 158,000 yen ($1,347) a month.

As the goal is to also help families who face financial hardship in raising children, the MLIT also plans to expand the program to include families with children who have incomes of up to 40% to 50% of the average income of all households. The 50% figure is equivalent to about 259,000yen per month. It is estimated that semi-public housing rent will be more expensive than full public housing rent, but because residents will receive subsidies, their net rent will be lower than what they would pay for equivalent private sector housing.

Separately, families with children will also receive additional rent subsidies from the government. To prevent delinquent rent payment, the government will assist residents with premium payments to rental insurance companies. According to the MLIT, as a rule, residents who are delinquent with rent payment for several months in a row will be evicted.

The MLIT also plans to establish new building standards (including earthquake, energy-saving, and soundproofing standards) that will be applicable to abandoned and vacant houses that could potentially be designated as quasi-public housing. The Ministry also plans to provide financial assistance to owners of vacant houses to help them fix or renovate them to meet the new standards.

It may be seemed contradictory that vacant houses could have owners, but due to Japan’s ageing society, many people inherit un-occupied homes from their deceased parents.

These homes are no longer occupied, as adult children often live in cities far from their hometowns. However, as they have inherited the property, they are still responsible for maintaining them and paying the property taxes.

Some people stop maintaining their parents’ homes, as they are located too far away. These houses end up becoming not just abandoned eyesores but also a drag on the local housing market. It is also important to point out that even in urban areas, vacant and abandoned houses are a growing problem.

Thus, the MLIT’s proposal could ultimately help with liquidity in the housing market in general, not just the issues of helping low-income families and cutting down on public spending.

In this framework, the MLIT envisions that real estate agents will have a role as intermediaries, helping people decide whether renting in the private sector or opting for quasi-public housing is more appropriate for them. The MLIT notes that it is aware that converting abandoned houses into quasi-public housing will increase the supply of rental housing as a whole, which would impact real estate brokers (who rely on commissions for their income), and it is weighing these disparate issues in finalizing the overall framework. (Jeff Wynkoop)

YOKOSUKA CITY FIRST TO TEAR DOWN A VACANT HOUSE UNDER NEW LAW

November 27, 2015

On October 26, 2015, Yokosuka became the first city to tear down a property under the new law called “The Law for Special Measures to Promote Dealing with Vacant Houses, etc.” brought into force earlier this year. Yokosuka City is located in Kanagawa prefecture, about 60 kilometers south of Tokyo.

The purpose of the law is to encourage municipalities to tackle Japan’s growing abandoned house problem. Without new measures, Nomura Research Institute has estimated that 21% (!) of all residential buildings in Japan will be abandoned by 2023.

Earlier this year, the Ministry of Land, Infrastructure, Transport, and Tourism published guidelines for application of the new law (with concrete examples, etc.), and already over 430 municipalities have enacted ordinances to bring the guidelines into effect.

Although in the past it was possible for the authorities to have a property condemned and demolished, the new law creates a special streamlined process for designating a property as a ‘vacant house,’ and encourages local authorities to demolish such properties after a period of notice and public announcement, etc. Prior to designation, the new law gives the authorities the right to enter and inspect abandoned properties as well as the right to review private fixed asset tax records to search for the owner.

Most importantly for potential investors, the law calls for each local government to create a searchable, public database of designated properties, and to provide subsidies and consulting services to owners to further repairs and transactions with such properties.

In the above Yokosuka matter, Yokosuka City received multiple complaints about the property in October 2012, and tried to locate the owner to demand rectification without success. In Japan, owners are not obliged to register ownership at the local legal affairs bureau.

Since the building was subject to multiple neighbor complaints, vacant for at least one year (i.e., common utilities such as water, electricity, etc. had not been in use for at least one year), and the owner not found, the authorities carried out a physical inspection and decided the building was a potential hazard to public safety.

Consequently, the local authorities designated the property as a vacant house under the new law. On September 1st, Yokosuka made an official public notification on the city’s home page and the Official Gazette to demand the vacant house be repaired or demolished by October 22nd; otherwise the city would take action.

When there wasn’t a response and the owner still not found by October 21st, the mayor announced the property would be demolished on October 26th.

Why are there so many abandoned houses in Japan? The usual response includes an explanation of the Japanese demographic situation (and resulting declining demand), coupled with the long-standing tradition of young Japanese leaving the countryside for big cities. There is, however, a more direct financial incentive.

Under Japanese tax law, there is a reduced basis for fixed asset tax and city planning tax calculations for land where there is a residence situated on such land. Accordingly, rather than remove the residence and lose the tax benefit for the land, it pays for owners to keep the building on the land indefinitely, even if the building is decrepit and the owner has no plans to use the property. The situation is, however, changing. In May this year, the rules for the tax reduction above were amended so that properties designated as a ‘vacant house’ by local authorities will automatically lose the reduction in fixed asset tax and city planning tax basis for the land. The new rules are to become effective from next year on, so hopefully in the future this will spur a noticeable decrease in the number of abandoned houses in Japan. (Jeff Wynkoop)

Growing Number of Vacant Homes

In 2013, Japan had 8.2 million vacant homes, or a vacant housing rate of 13.5%, the country’s highest rate to date.

Vacant homes are divided into four categories: “for sale”, “for rent”, “second home (villa)”, and “other”. Particularly troublesome are residences in the “other” category, which is defined as vacant properties which owners neglect without looking for buyers or tenants. One common example of how such vacant homes come to be is when someone allows his or her parents’ house to sit unused after the parents pass away. The majority of “other” vacant homes are of wooden construction, and as long as regular maintenance is performed, these houses don’t need a resident. If neglected for a long time, however, there is an increased danger for these wooden houses to become subject to collapse, squatters, fire, or illegal disposal of rubbish, any of which could have adverse effects on the surrounding neighborhood. The percentage of “other” vacant homes has risen from 35% of all vacant homes in 2008 to 39% in 2013.

The “other” vacant housing rate (“other” vacant homes / all housing) has also increased from 4.7% to 5.3% over the same five-year span. Looking at prefectural rates, those regions suffering from depopulation are ranked highly, e.g., Kagoshima at 11% and Kochi at 10.6%. In contrast, urban areas have low rates of “other” vacant homes, e.g., Tokyo’s rate of 2.1% is the lowest in Japan.

“Other” vacant housing rates are highly correlated with aging rates: prefectures with aging populations have larger numbers of “other” vacant homes. As the aging rates of individual prefectures and the whole country increase, so too will the rate of “other” vacant homes rise.

Urban areas have low rates of “other” vacant homes, but that doesn’t necessarily mean fewer problems. While urban rates may be low, the overall numbers of vacant homes are quite high, as exemplified by Osaka and Tokyo, which sit at #1 and #2 for most “other” vacant homes. Furthermore, because urban areas have closely spaced buildings and residences, a single problematic vacant home can adversely impact a large number of surrounding properties.

Looking at the survey results of five years ago, Tokyo remains unchanged in 2013 with a vacant housing rate of 11.1%. A breakdown of the categories reveals that whereas the national rate of “other” vacant homes rose, Tokyo’s rate fell from 25.1% to 18.7%, while its rate of “for rent” vacant homes rose from 65.5% to 73.2%.

Urban areas have a large supply of apartments and rooms for lease or rent, and recent inheritance measures have increased that supply further. Yet, as new apartments fill up to capacity, older apartments are left without tenants. As long as an owner is advertising for tenants, an apartment will receive regular upkeep and there will be no problems. Once the apartment gets older and the owner stops listing it, however, the “for rent” apartment is re-categorized as an “other” vacant room. Without regular upkeep, such apartments can become just as problematic for neighboring apartments and properties as a vacant home. “For rent” vacant homes and apartments have the potential to cause large problems in urban areas in the future.

Among the reasons for the growing reserve of problematic vacant homes are the following: 1) Population decline; 2) Increase of nuclear families, with children not inherit familial homes from parents; 3) Inability to sell or rent out properties due to lack of marketability for quality or location reasons; and 4) Unsold/unrented properties which should be demolished but are left standing because fixed asset taxes on empty lots are six times more expensive.

Japan’s Idiosyncratic Housing Market

In most countries, the vacant housing rate fluctuates according to the state of the economy, but Japan’s rate has climbed consistently since WWII. The main cause of this is because, after the war, Japan’s housing market became saturated with disposable built houses. As Japan’s population boomed, new residences needed to be produced in large numbers, but this led to the construction of lower quality structures with shorter lifespans. Furthermore, urban centers spread out to their limits, and many residences ended up being built in unfavorable locations.

This meant that after the war, urban areas expanded in a disorderly manner, and many of the residences built at that time were not suitable to be sold and reused. Now, as the population declines, no one wants to inherit or live in those houses which are of low quality or poorly located, and so they sit unused. Within Tokyo’s urban centers, some neighborhoods consist chiefly of wooden houses. These structures were in accordance with the building code at the time of building, but they are now illegal structures. Those that cannot be torn down and rebuilt on their current plots are left vacant and untended.

Japan’s case is quite an anomalous one. England has a vacant housing rate of 3-4%, and Germany’s rate is extremely low at around 1%. European cities have clearly delineated urban areas, outside of which residences may not be built. Houses are built to last within specified zones and passed from generation to generation or sold as a pre-owned home to new residents. While the US has similar housing customs, its vacant housing rate is relatively high at 8-10%, which is most likely connected to its plentiful land.

Within the housing markets of Europe and the US, pre-owned homes make up around 70-90% of the market, while new homes comprise the remainder. By contrast, Japan’s market consists of only approximately 15% pre-owned homes, and a vast majority of new homes. Despite the growing number of vacant homes in Japan, approximately 800,000 new homes are constructed each year, with 990,000 being constructed in 2013 due to rush demand before the consumption tax hike. Japan’s housing market finds itself in an untenable position as vacant homes continue to multiply and new houses are built in large numbers.

Vacant Housing Rates in 20 Years

At the current pace, how high will vacant housing rates rise? I calculated the rates of Tokyo and all of Japan based on the following conditions. Housing demand, i.e., number of households, was based on National Institute of Population and Social Security Research (IPPS) estimates, according to which Japan’s number of households will peak in 2019, and Tokyo’s in 2025, after which the numbers will decline. While Japan’s population is already shrinking, the increase in one-person and small family households has resulted in the number of households continuing to increase, but this will not last much longer. On the supply side, Case 1 represents the status quo, i.e., it maintains an average rate of new residential groundbreakings and demolitions compared to recent years. Case 2 represents an incremental decrease in new groundbreakings, down to a final value of 50%, and a gradual increase in demolitions, up to 200%.

In Case 1, the national vacant housing rate will reach 28.5% in 2033. Meanwhile, whereas Tokyo’s rate was nearly equivalent to the national rate until 1998, rural regions saw a higher rate of population and household decline thereafter, causing the national rate to surpass that of Tokyo. In the future, however, the number of households in Tokyo will also begin to decrease, resulting in the prefecture nearly catching up to the national vacant housing rate at 28.4% in 2033. By contrast, in Case 2 the increase in vacant housing rates is reined in somewhat, but even so the national rate reaches 22.8% and Tokyo reaches 22.1% by 2033.

Drafting Special Measures and Tax Reform

To start with, vacant home countermeasures should include two aspects: expedient removal of dangerous structures and encouragement of the use of those residences which are still usable.

On the demolition side, progress has been made on the formulation of the Vacant Home Management Ordinance (401 municipalities had enacted it as of October 1, 2014), which allows for the local government to provide guidance, give notice, issue orders, and even execute demolition of problematic vacant homes. The formulation and enactment of this ordinance varies greatly by region, and it has been enacted by more than half the municipalities in only 5 prefectures: Akita (92.0%), Saga (80.0%), Yamagata (77.1%), Yamaguchi (68.4%), and Niigata (60.0%). Saitama (33.3%) also ranks in the top 10. These prefectures with high rates of enactment either have significant numbers of vacant homes due to population decline; or they have a high risk of vacant homes collapsing due to heavy snowfall; or they have a high building density in their urban centers.

Following adoption of the ordinance, a Vacant Homes Special Measure was established in November 2014 with the same content (partial enactment on February 26; full enactment on May 26). According to this measure, vacant homes which: (1) present clear danger due to possible collapse; (2) present clearly unhygienic conditions; (3) have clearly suffered in appearance due to lack of upkeep; or (4) if left in their current state will have adverse effects on the surrounding environment, will be considered “specified vacant homes”.

Municipalities will have the authority to enter and inspect these structures (denial of entry to result in a fine) and enact measures similar to the above, such as provide guidance, give notice, issue orders (failure to comply to result in a fine), and even execute demolition. By the time the special measure is fully enacted, the Ministry of Land, Infrastructure, Transport and Tourism will have issued guidelines outlining how to determine whether a building is a specified vacant home or not, and municipalities will make their decisions based on those guidelines. Furthermore, the special measure allows for municipalities to draft their own vacant home countermeasure plans, with national funding for the survey, demolition, and reuse of vacant homes available for those regions which do so.

Additionally, the 2015 tax system reforms state that buildings which have been given notice will no longer be considered as excepted residential land, and owners will have to pay fixed asset taxes in full. The system by which building a house on a plot of land reduced taxes on that land had the effect of increasing available housing at a time when it was in short supply. Now that housing is too plentiful, it gives an incentive to leave a dangerous structure standing instead of demolishing it. This change to the tax system seeks to address this adverse effect.

Expected Effects of Special Measure

As a result of the enactment of the special measure and the reform of the tax system, owners of specified vacant homes will begin to feel more pressure. This pressure will most likely affect owners’ behavior such that they perform maintenance on buildings in order that they don’t become specified vacant homes; make use of them by renting them out; or sell them while they still can, considering the upkeep costs and future increased tax costs. Based on these changes in behavior, house builders and real estate companies have already begun providing maintenance and liquidation services, showing a vanguard effect of the special measure.

Even if an owner’s taxes are increased, however, if she is unable to pay and is further unable to cover even the demolition costs, some buildings will still be left to stand vacant and abandoned. In this case, the government will have to execute the demolition of the building, but it will be unable to bill the owner and it may have to sell off the land in order to recover the costs. Even if the municipal government is able to sell the land, however, if there was a lien on the property, part of that lien might be transferred to the government. If the government is unable to collect by selling the land, then the demolition will have been carried out using public funds. One of the disadvantages of municipalities actively undertaking execution of demolitions is that more owners, knowing that such measures will be taken, will simply sit idly by and wait for the government to take care of the demolition for them.

In advance of these abovementioned tax system reforms, some municipal governments have tried to address the fixed asset tax issue by still removing special tax exemptions but allowing a two-year extension in lieu of subsidizing demolition costs, thereby encouraging owners to take care of demolition of dangerous residential buildings on their own. Mitsuke city in Niigata prefecture and Tateyama city in Toyama prefecture have gone with two-year extensions, while Toyomae in Fukuoka has set a much longer ten-year extension period. This measure is not without its problems, however. It is often more advantageous for owners of only slightly rundown properties to leave their building to become dilapidated and then demolish them only after receiving the extension. The extension therefore has its pros and cons.

While the Vacant Homes Special Measure will likely be effective in increasing the number of demolitions of specified vacant homes, when owners do not deal with problem buildings themselves the issue of whether the city should execute all demolitions or subsidize self-demolition in some manner will doubtless arise in the future.

Government Support for Demolition Costs

The guidance, notices, and orders of the ordinances and special measure mentioned above, as well as the removal of special exemptions on fixed asset taxes for residential land, are all means of applying pressure to vacant home owners using the proverbial stick. Demolitions will not necessarily increase through the application of the stick above, however, and so municipal governments have provided various carrots to encourage owners to demolish.

The tax exemption and extension on tax increases mentioned above are one example of such incentives, but even simpler would be demolition cost subsidies. According to a survey by Mainichi Shimbun, 96 municipal governments had demolition subsidy systems in place by autumn 2014 (September 21, 2014, Mainichi Shimbun).

The municipality which has provided the most subsidies for demolitions is Kure, Hiroshima, with 262 subsidized demolitions for \70 million at the time of the survey (subsidies limited to 300k yen each). Because Kure is located in a sloped and hilly area, subsidies are used to encourage demolitions which would otherwise be difficult to undertake. Tokyo’s Adachi, Arakawa, and Kita wards are also providing subsidies (limited to 800-1000k yen). Whereas Kure provides smaller subsidies to more houses, Tokyo’s wards provide larger subsidies in order to quickly clear away houses in danger of collapsing, without resorting to full-on execution of demolitions.

There are also some unique subsidy systems. For example, Fussa city will subsidize demolition (up to 500k yen) only in cases where the house has been vacant for more than one year and the owner is willing to demolish it and build a family residence in its place. Fussa is suffering from an outflux of its young demographic and is trying to retain its population by combining demolitions with new residences.

There are also cases of vacant homes being demolished using public funds under the condition that the land and building are donated to the city. Nagasaki city provides such demolitions (41 as of 2013) as long as the community is allowed to decide how to use the land and agrees to maintain it. Because Nagasaki is a very hilly city and homes are concentrated on flat areas and hillsides, using a vacant home’s empty lot for a public project is very important for neighborhood improvement. The municipal government commits public funds for the sake of the community, not for the owner per se. Yamagata city and Namerikawa, Toyama also have systems for using public funds for demolition.

Some municipalities encourage vacant home demolition by subsidizing the teardown under the condition that the land be appropriated for public use for a set time period while also waiving fixed asset taxes on the land during that period. Bunkyo ward in Tokyo has torn down two houses under this system (subsidy limit 2 million yen). The oldest example of this type of system is Koshimae in Fukui, which has demolished 22 houses.

Some cities take matters in hand and proactively execute the demolition of dangerously rundown vacant homes when the owners cannot or will not. One example is Daisen in Akita prefecture, whose vacant homes are constantly in danger of collapsing due to heavy snowfall. The three cases of executed demolitions, however, incurred costs of 6.2 million yen, which have yet to be recovered. These executions have in essence become examples of publicly funded demolitions, but they were carried out because it was judged to be for the good of the public.

Here we have surveyed various forms of publicly funded demolition systems employed by cities to fit their own circumstances and needs. In the future, cities will most likely include various different methods and measures when they formulate their vacant home countermeasures plans.

Yet, there are moral hazards to using public funds in this way. If people are aware from the outset that they can receive such support, then they will never choose to bear the costs of demolition. The government must make its stance clear that owners must, in principle, carry out the demolition themselves, dependent on the needs of the area and the circumstances of the building in question. When the property is right on the threshold of becoming dangerous or the neighborhood is able to gain much value out of the plot of land, then the government will have the leeway to allot funds and remove specified vacant homes. Municipalities will have to bring their wisdom to bear in order to make this strategy work.

Promoting Use of Vacant Home Banks

Turning now to look at the vacant home-use side of the story, many rural cities have had vacant home banks for years. A vacant home bank is a system whereby the city government manages the matching of vacant home supply and demand.

In order for a vacant home bank to work, the first step is registering enough stock. While there are many examples of vacant home banks with support measures for new tenants, such as renovation and rent subsidies, there are few which provide incentives to vacant home owners. One such example is Takeda, Oita, which is trying to counter the lack of newly registered properties in its vacant home bank—due to owners not wanting to move furnishings—by providing 100k yen to the owner when a contract for sale or rent is signed. Oshika in Nagano has set up a system to subsidize (up to 100k yen) the transport or disposal of home furnishings of vacant homes which are registered in the vacant home bank and sold or rented out.

Collaboration with local realtors, NPOs, and regional partners is also essential to increasing the number of registered vacant homes. Furthermore, in order to increase the number of sales and leases of these properties, systems need to be put in place to provide lifestyle and work support and consulting, and to answer any questions about the building. Such systems should be established by the local administration and community working in tandem.

Another common option for using vacant homes is as a local community space. Tokyo’s Setagaya ward has a system for providing open access to vacant homes (rooms) or donating them for use by the community without compensation.

Improving Fluidity of Pre-owned Homes

Above, I have pointed out the need to increase demolitions of dangerous vacant homes in the short term and to make use of those buildings which are still usable in order to deal with Japan’s vacant home problem. This would only be treating the symptoms, however. In order to solve the more basic problem, Japan needs to change the structure of its housing market to be more like the West by building houses that last and using them for a long time.

Historically, the Japanese did not build their homes intending to eventually sell them and they did not properly maintain them, leading to buyers being very wary of pre-owned homes. Those who did maintain their houses well, meanwhile, were not rewarded by the pre-owned homes market, and so there was little incentive to do so. In recent years, Japan has finally begun keeping maintenance records and the pre-owned homes market is beginning to recognize and value that. A long-term, high quality home certification system has been established to increase the quality of houses when they are built, and the number of certified homes is increasing.

As for financial incentives for people to buy pre-owned homes, two possible suggestions are: providing more tax breaks on home loans for pre-owned homes than on those for new homes; and taking the renovation subsidy policies from the few municipalities that provide them and expanding the system nationwide.

These measures would, over time, transform Japan’s housing market into one with houses that are built to last and are used by many families over the years, which would address the vacant home issue at its source. Additionally, those urban areas which have been allowed to grow haphazardly must be constrained and cities need to be made more compact.

(http://www.fujitsu.com/jp/group/fri/en/column/message/2015/2015-06-30.html)