Tokyo proves that housing shortages are a political choice

I ranted about this concept recently when I went to buy my family a house. I can't believe it exists somewhere.

as the article points out, there is significant net migration to Tokyo both from the country itself and from abroad, which makes the situation indeed comparable. I seriously wonder if people here even bother to at least skim the article.

In fact Tokyo has grown significantly faster than New York or Los Angeles over the last fifteen years. (population up by about 1.2 million compared to 500k respectively).

Do you have any evidence to back this up?

My sources say that this is a long held artifact of the shinto belief system and culture. This is a clumsy way to state this but they essentially that houses accumulate spirits over time and become “haunted”. Old dwellings are valued less because they are “dirtied” or “burdened” with an accumulated cruft of spiritual... somethingness. Haunting here isn’t a literal translation but it’s the best I can do in a short time. It’s kind of how Marie Kondos whole schitck is about treating your things as if they have “personness” or “the quality and dignity of being actively present and deserving of respect”.

There was a monster real estate bubble in the eighties (prices tripled), I think earthquakes were also a risk back then.

This is what my friends who own houses in Tokyo tell me. Homes are bought with the assumption that they will be destroyed before the loan is up and that the bank will pay it off. This doesn't really make sense to me because there have been big earthquakes in Japan in my lifetime, and there isn't a massive housing crisis while every structure in the country is being rebuilt. So I don't fully understand this logic. But unlike the other comments replying to you, I can confirm that I've heard this many times.

My understanding is that while people in the US pay for housing with 15 or 30 year mortgages... in Japan the 100 year term is the most common. I am not sure if this has any effect on the market, but people certainly don't think "when I grow old, I'll have this big nest egg locked up in home equity". The bank owned the house when they were born, and it owns it when they die.

It's not that hey won't last exactly, but more that regulations have improved since the mid 90's and revised in 2004, so newer buildings are considered to be safer.

It's actually something people talk about when looking at renting a new apartment.

People are downvoting you, but everyone I know here in Japan has told me this.

It's not that they're planning for complete annihilation from a massive earthquake, but there's bound to be some wear and tear when a relatively large one strikes every few years. Compound that with the absurd humidity and mold problem endemic to pretty much all of coastal Asia (trying to keep your house mold-free is a losing battle after a certain point and it's unavoidable) and the cost and effort of repairs far outweighs the ease of just tearing it down and rebuilding.

In the west, a 20 year old house is considered brand new. In Japan, 20 years old is bordering on junk territory. 30 years is junk and not worth the effort of repairs. You can search online and find 40 year old houses basically selling for pocket change since they're basically considered moldy death traps on the verge of collapse.

Now, though, Western-style homes built to withstand earthquakes are becoming common and they're expected to be a slightly better investment. How these houses fair against mold is something I'm not sure of.

A commenter below mentioned spirits accumulating in a house, but I've never heard of such a thing and it reeks of mysterious orientalism. But most people won't buy a house that someone committed suicide in or was murdered in. "Jikenya" (incident homes) are marked as such and sell for drastically reduced prices, if they can sell them at all.

I've heard the Japanese do not like "used" houses but I've never hear about the earthquake angle.

You can still do this even if you already made a mistake. Remember Japan had an extreme real estate bubble in 1980s.

Sure, the "house" depreciates, but what about the land / dirt?

This is what I always find interesting in real estate, especially in the pricey areas: we use the mental shortcut of saying "I bought an expensive house".

No, you didn't, you bought expensive land. If you "bought a house" for $3M, the structure itself would probably take <$500K to rebuild if it's <3000 sq. ft. (300 m^2): the rest of the money went to dirt ownership.

You are 100% correct. Land is valuable, houses & buildings are not.

The small house on my land has decreased to the point where I pay less than $100 a year in taxes on it.

The land that it's on has increased by around 30x in the last 50 years.

Japan went through a huge multi decade housing bust after the 80s, which brought down much of the USA/Canadian west coast with it for 5 or so years in the early/mid 90s.

check out princes of the yen for an explanation of japan's housing bubble (and a lot more).

The value of the land would go through the roof. Houses would absolutely be getting torn down to build high density apartments.

There is more to it than monetary considerations however, communities will be destroyed, the feelings and romantic notions people have about the area will be stepped on.

> especially with regards to earthquakes, and therefore people often wanted the latest designs. So when they built houses, they didn't spend as much effort because they knew after a few decades they'd be completely torn down

That only explains the structure itself. But an empty, small lot of land (only big enough for one home) with no structure at all (or an abandoned, worthless structure) can be worth well over $1M in america.

To be fair, tract houses are usually built poorly and don't age well. The 1960s tract house I currently rent is hot garbage and it would be better/safer to tear it down and rebuild, than it would to fix it up.

Friend of mine said that before moving to US he always thought that scenes in Hollywood movies about guys and girls punching and kicking through the walls were totally ridiculous. After living in Seattle for a while he no longer thinks so. The walls are indeed much thinner than in Europe. He supposed that this was due to earthquakes. What was the point to make home heavier/more robust if it still is not enough to protect against strong earthquakes while making evacuation harder? That and the culture that prefers to rebuild from scratch rather than maintaining older things leads to houses that are only good for 30-40 years...

Traditionally, all Japanese buildings were made of wood, probably due to the abundance of materials (75% of the land is still forest even today). But wooden houses didn't last long because of its monsoon climate with a lot of rainfall (things get rotten). And then, there's an earthquake. People tend to think that materials are transient and fragile, and the modern housing system in Japan might have reflected this collective belief.

One piece missing in this analysis is construction cost: between permitting, regulations, unions, and Other Unknown Factors™, it can cost 2x as much to build the same structure in the USA compared with elsewhere.

If construction is cheap, sure, tear down the old and build anew. But if it costs more to build a house than buy the same house (yay SF Bay Area!) you’d be crazy to do this now.

If it's been 30+ years, it's probably time to stop thinking of it as a temporary thing.

> to finally architectural concerns because why would we want to impose on history of buildings barely a hundred years old.

On the other hand, why do people need to build a new, ugly modern high-rise buildings in historical parts of the city? Is there not enough of other land?

Historical parts better stay historical forever and there should be no new buildings, I think. Because no tourist will ever come to see modern, ugly concrete buildings.

Uh, there are plenty of homeless in Tokyo, they do keep it tidier I guess. There are also homeless in Osaka and Nagoya. I assume other big cities have homeless, but I’ve only been to (and seen them) in these three cities.

They aren't, there are no regulations on this. I hope you get what you wish for.

I've said this repeatedly about Sydney, plenty of people would live in capsule homes given the chance. For a lot of people in the inner city you don't actually spend that much time at home besides sleeping.

Local landowners would lose their minds though.

For a real-life anecdote, last year I lived in Tokyo in a 6 jo apartment (tatami bed + living room around 110 sq ft + about equal size bathroom and kitchen), and my rent 40 minutes by train from Shibuya station and 15 minutes from Kichijoji (#1 most livable Tokyo neighborhood) was around $430/mo.

I have also heard that prefab is really common - in fact just walking around Tokyo it does look like there's a ton of prefab houses. That said I've toured around some and been inside some, and they were very comfortable, more so than my current rickety San Francisco apartment and similarly to brand new NYC ones I've been in - so I don't consider them lower quality than what I typically see in American cities just because they're prefab. Rather it's far more efficient and that keeps costs down.

There is something to be said about traditional Japanese living being more space-efficient - folding out your futon means that you don't have to have separate permanent bedrooms, dining rooms etc like a Western apartment would have, which allows for you to have a decent living in ~220 sq ft like I did - but if you want to live like a Westerner, you will have to pay up for that, and I do hear that Western style apartments are more popular these days.

After living in San Francisco, I felt like I had hit the jackpot, but as it turns out that's just "normal" in a functioning city.

There's a lot of people (in the US at least) that see appreciating property values as inevitable. Combined with views associating dense housing with urban ghettos from the 80s, it's one of the reasons people think building more houses won't make them more affordable.

Topography also plays a role, Houston and Chicago can grow outward forever, something that pesky hills and water get in the way of in the Bay Area.

Houston does, however, rely on the taxpayers in the rest of the country to underwrite their many many housing units built in a floodplain.

They are private in ways specific to Japan that, what I know, you pretty much won't find anywhere else.

Operated privately is very different from built privately.

They aren't false. There just hasn't been sufficient building allowed to take up the slack. If Vancouver took a page from Wizards of the Coast's tactics, prices would eventually go down. Namely: you have to convince speculators that you are willing to build (issue cards) until the value of speculative assets falls to the livable price for everyone else. If they were willing to allow unlimited building until the prices fell to the desired level, eventually speculators would realize that Vancouver property is a terrible bet.

Actually the presence of these investors is just a reflection of Vancouver's own unwillingness to allow said amount of building. If the speculators thought there was any chance of them building enough to meet demand, they would no longer view housing in Vancouver as a safe investment. So it's really a self-inflicted wound, not a violation of the laws of supply and demand.

That being said, an empty home tax does not seem like a bad supplemental approach. However, even assuming the tax is perfectly effective, if the population inflows outpace building, prices will continue to rise. And I would guess that is likely to be the case. The tax is a band-aid, but the problem needs stitches and cyanoacrylate.

486K as of 2017. So around ~3%

http://nbakki.hatenablog.com/entry/Foreign_Population_by_Nat...

The market is providing 2 beds (one big, one small) because these are acceptable to young professional couples. When babies come (which is often what happens) then the apartment works for a short time, but then confronts the couple with a challenge. The second bed is inadequate, and if the babies are of different sexes then the law dictates that they can't share the room past 9(?) years old.

This causes the couple to seek a house (there are no 3 bed apartments) houses are very inefficient in terms of footprint, and affordability means that most young couples end up commuting.

Government has a role because developers just building things mean that the costs of the development are unanticipated and then later socialised as collateral damage. On the other hand if government manages development then the appropriate stock with appropriate infrastructure (doctors, schools, shops, transport) can be provided at the time and the cost socialised in the transaction and managed. This is economically much more efficient.

The employment rate has increased by somewhat unnoticeable amount over the past 10 years [1]. The increased housing supply is mostly due to cost factors (tax breaks from the previous administrations, low interest rate) and the demand due to decline of small cities (demand gets concentrated around Seoul, the capital city; people buy houses around Seoul while living far away in another place on rent). As for the office/factory/commercial space, there has been a sharp increase in supply, and the vacancy rate (spaces that cannot find tenants) is 10-20% in major cities. Folks still buy buildings with a yield of 2.5-4% because the interest rate is so low. I am currently based in Cambridge, Boston. There are empty stores that have been looking for tenants for more than a year.

[1]: http://www.index.go.kr/unify/idx-info.do?idxCd=4013

This should be about 100% of the voters right?

There are lots of ways to do it, but yes, whatever you do, you have to make that value judgment. I have trouble believing that the value judgment "Your parents were richer than John's parents" is anywhere near the top of the list of reasonable approaches. (I have real trouble believing that the value judgment "Your grandparents shared a race with the politically powerful, who refused to sell to John's grandparents" or "Your great-grandparents shot John's great-grandparents in the face" are anywhere except right at the bottom.)

We could just make value judgments on people based on how much money they have.

/snark.

Really to be serious I would say that your concern is valid, but we shouldn’t be comparing this idea to perfection, because today we certainly don’t have perfection. Yes you are right that determining who gets housing is nontrivial. But who said collaborating across society was simple? Abstracting it all away to markets is far from ideal, don’t dismiss other proposals simply because they may not be easy.

"Liberal" means center-left (ie into free markets). In European discourse "liberal" parties are centrists, and US socialists use the term exclusively to refer to centrists Democrats.

The left movement since even before Marx was generally very critical of liberalism - that is, the political philosophy based on the concept of rights (in theory rights conferred to all humans but in practice only very rarely so), property rights, and the idea that the only valid way to make changes in society is to vote.

Somehow the term "liberal" in the US (though also in some other parts of the world) came to be associated with progressives, who are yet still usually differentiated from the Socialists and other "far left" ideologies. Most of the academic socialist, communist, radical feminist and anarchist work is strongly critical of liberalism, even its metaphysics and epistemology.

Indeed, Marx himself started (if his early texts are anything to go by) as a liberal in that sense. The key turning point for him was his critique of liberalism in his On The Jewish Question. From SEP:

>Marx argues that not only is political emancipation insufficient to bring about human emancipation, it is in some sense also a barrier. Liberal rights and ideas of justice are premised on the idea that each of us needs protection from other human beings who are a threat to our liberty and security. Therefore liberal rights are rights of separation, designed to protect us from such perceived threats. Freedom on such a view, is freedom from interference. What this view overlooks is the possibility — for Marx, the fact — that real freedom is to be found positively in our relations with other people. It is to be found in human community, not in isolation. Accordingly, insisting on a regime of rights encourages us to view each other in ways that undermine the possibility of the real freedom we may find in human emancipation.

Real socialists very much distinguish themselves from liberals. If the labeling seems inconsistent, it's likely because the spectrum of American politics is so narrow the two get collapsed into each other. Socialist politics have been in a state of almost total collapse over the past 50 years, and most Americans are unfamiliar with its main tenets.

Having spent a bit of time trying to understand this band of the spectrum, here's my very rough mental model. Regarding economics, you can think of the left continuum as moving roughly from liberal -> progressive -> social democrat -> socialist -> communist.

* Liberals pretty much favor what you might call free markets, with some regulations against the worst excesses (pollution, fraud, etc).

* Progressives tend to favor a more Keynesian approach, with the government stepping in to try and tone down the amplitude of the boom/bust cycle, pursuing aggressive antitrust action, etc (think Elizabeth Warren).

* Social Democrats believe that capitalism fundamentally produces inequality, but also wealth, so to maintain social cohesion, markets have to be balanced with a strong welfare state, or safety nets (Sanders circa present day probably fits here).

* Socialists believe that capitalism is an inherently exploitative distribution of _ownership_ where an elite social class owns most of the necessities like housing, hospitals, factories, etc.[1] Socialists believe that that ownership is the result of workers being forced into a bad deal: having to sell their labor in exchange for access to those necessities, and that the remedy is for those workers to unite to wrest those necessities back from the owning class.

* Communists accept the same principles as socialists, but believe that the end goal for politics should be a society where all resources are collectively owned and distributed on the basis of need. Authoritarian communists believe that a strong centralized government is needed to make this happen (think Stalin or Mao), and that once the redistribution happens, that government will fade out of necessity. On the other hand, libertarian communists (also known as anarchists) believe that centralizing state power will only reproduce the exploitation of a capitalism under different owners.

[1] Not all socialists oppose markets, some think they're great, but that individual firms should be collectively owned by their employees, rather than external shareholders.

This is a bit late. I was rhetorically appealing to liberals but consider myself a socialist if that helps.

The planning laws and social/physical infrastructure mitigate against initiatives and changes that would reduce the costs. One fundamental is that the rail gauge in the UK was the first one created, and this meant that tunnels and bridges were built unambitiously, consequentially there are no double decker trains in the UK. If there were double decker trains on the London commute lines London accommodation prices would be significantly reduced (I believe). That's just one small example of the complex confluence of issues that have driven the market in one direction though.

Everyone should remember that 60 years ago London housing was very poor as well as relatively expensive (although far more attainable). That's important as it shows that things can and will change over time in the market. We need to think about this because some of the reforms suggested will fundamentally alter the physical geography of the city in ways that will have consequences 100's of years into the future. Architects and planners have a very bad track record with respect to these alterations, for example see Birmingham, Portsmouth, Ipswich, Reading in contrast to Manchester, Brighton and Bristol where history has run differently (Bath is a really good story - the 60's got stopped in its tracks there).