Hacker News Reader

Comment by helen___keller | Hacker News Reader

> This counsels that a young person born and educated in e.g. Gifu move to Tokyo after graduation to earn a living. > Many, many do. While Japan’s overall population is declining, Tokyo’s increases by about 100,000 people per year.

Notably this differs from America in that rent acts as a natural counterbalance here. It’s not common knowledge that a university graduate should move to New York or San Francisco, in fact if you aren’t in a top paying field it’s probably common knowledge that one should not move to these cities.

I wonder how much different the population landscape of the United States would look like if NYC, the Bay Area, LA etc had ever figured out how to plan for urban growth in the same way Tokyo did (context: you can afford a small single family home on a middle class income in Tokyo, I think prices there are around 30% over other Japanese cities)

View on HN

Someone who knows more about Japanese culture and tax policy needs to weigh in, but my understanding is that housing is typically not considered a long-term investment vehicle, to the point that houses are expected to be demolished after some number of decades and depreciated accordingly.

This mindset prevents an established base of property owners from blocking subsequent development, resulting in their property values skyrocketing.

America might have a chance of fixing this with national-level zoning, which will never happen as long as current political alliances are the way they are.

I suspect the causality is reversed:

Housing is not considered a long-term investment because demolition and new construction is easy.

Really good article on zoning in Japan: http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html

I think it's a bit of both, it's not viewed as as much of an investment therefore zoning laws are lax, which mean that housing can't become an investment because anyone can build (up to) anything on a lot.

I think the tax code even incentivizes demolition in that the taxes for sales of bare land versus land with a structure on it are less.

In constraint, California tax policy incentivizes keeping around crappy old buildings. If keep the old building, Proposition 13 limits how much your tax can go up. If you build a nice new building, the state punishes you but reassessing the value of your property. This can greatly increase your property tax if you have owned the property for a while.

My instinct is that the causal arrow begins with earthquakes and disposable (timber-based) building practices, which keep housing/structures from being viewed as stable long-term vehicles

So why didnt California end up in that state, concidering it has nearly the same conditions?

That's a very good question. Probably because modern California was settled by European colonizers, who brought their traditional construction and property practices with them?

I'd love to see a sociologist's analysis of the ring of fire, though. If anyone knows of someone who isn't just talking out their butt (like me), please drop a rec

>That's a very good question. Probably because modern California was settled by European colonizers, who brought their traditional construction and property practices with them?

Like lawns! Like California is the completely wrong state for lawns.

California is a massive state with 16 different climate zones. The vast majority of California is not a desert. Lawns are fine in most of the state.

But most Californians do live in the desert. Lawns may be fine in most of the state, but not many people live in those parts.

No, most Californians do not live in the desert, not even close.

https://upload.wikimedia.org/wikipedia/commons/6/6c/K%C3%B6p...

Ok, you discovered my colloquial use of a technical word. I know most Californians live in what is technically a "Mediterranean" climate. But relevant to the topic at hand: most Californians get well under 20 inches of rain per year. It isn't a "desert" biome, but "Desert" at least gets you in the right mindset.

http://ponce.sdsu.edu/california_average_annual_precipitatio...

https://gisgeography.com/us-precipitation-map/

A cursory google search suggests that grass lawns need the equivalent of 1" of rain per week. Very few people live in the parts of California that get 50+ inches per year, which was the original point. Grass lawns are entirely unsuited to the parts of California where almost everyone lives.

All the sibling posts here have made their point. But just anecdatally, as a lifelong resident, lawns make zero water-economic sense.

California is seismically active, but not like Japan: https://upload.wikimedia.org/wikipedia/commons/7/77/EQs_1900...

One factor is that large parts of Tokyo were leveled in WW2 bombings.

Starting your housing stock from near zero must mean you favor getting something simple done quick.

Japanese houses are low quality (they have single pane windows, no insulation at all, and no central heat because they think it builds character). But they’re no more timber based than US houses are, and there’s nothing overly temporary about building a house out of wood, especially new forms like CLT.

This may have been true in the past, but it is definitely not true at this time. I'm currently shopping for homes in Tokyo, and the current generation of homes being built are high quality, insulated, with double pane windows, heated wood floors, incredible bathrooms (fully floodable, giant tubs, air conditioning/heating/24 hour ventilation), separated toilets with heated seats and bidets, and generally at least one nice balcony.

There's no central heat, but that's because it's wasteful. Each room has one or more air conditioners (which are heat pumps). I heat (or cool) whichever room I'm currently in, and don't need to waste energy on the entire residence.

For what it's worth, central heating as I understand it can usually also be controlled separately for each room. In Central Europe I too heat mainly the rooms I use (say, living room during daytime and bedroom at nights).

It definitely is. I live in the US, and my house has 3 separate "zones" for heating and cooling. Programmable thermostats turn things off and on automatically based on a pre-set schedule, and the schedules can also be overridden. The result is that we're generally only heating or cooling the parts of the house that we're using.

It can be, but it's not the norm. I've personally never lived somewhere that has programmable central heating/cooling.

The way I understand this (as a Canadian) is

When most voters own homes, politicians increase home prices

When (or if) most voters don't own homes, politicians decrease home prices

In your understanding, what is the force which breaks this equilibrium?

According to one study US GDP would be 9% higher if SF, LA, and NYC made room. They estimate NYC would grow to 40 million people.

https://www.aeaweb.org/articles?id=10.1257/mac.20170388

Originally found via: https://www.worksinprogress.co/issue/the-housing-theory-of-e...

It may be good that they don't make room then.

I wonder if the US would just become a group of 3 or 4 large sprawling city-states.

SFBA (maybe w/ Sacramento Area and Monterey Bay Area), Greater LA, Seattle Area, Portland+Vancouver and that’s just the West Coast. Add in the 4+ in Texas, two or three different parts of Florida and we haven’t even touched on the Northeast or Midwest still.

Nah, the US would not become merely 3 or 4 large sprawling City-States. For all of us city dwellers, there’s plenty that want nothing to do with anything that resembles a City.

Isn't it weird to use the word "sprawling" here? A world where major cities are affordable would be more dense. It would be easier to preserve land for its natural beauty. The US today is sprawling.

This comment reminds me of https://www.theonion.com/new-study-finds-most-of-earth-s-lan....

What problems do you think would arise from such a situation?

Gibson discusses this.

https://williamgibson.fandom.com/wiki/The_Sprawl#:~:text=The....

Kalzumeus spoke about "Tokyo" to represent Tokyo, Osaka, Nagoya and other large regional cities.

As you might expect, these Tokyo-like cities are much more expensive at their centre than at their periphery. Nevertheless, I imagine your eyes may water when you find out just how much more so. I only know one of these cities well, and to be fair only in land values not in rentals.

In absolute amounts, Tokyo itself is of course more unequal than smaller big cities. But the relative value distribution is perhaps fairly consistent across Tokyo-like cities.

Within Tokyo-city, very central regions (Minato-ku) are valued at 4X over central urban districts (Nakano-ku), which in turn, are 8X more expensive to buy than the least valuable outer-Tokyo districts (Hachioji-shi). So there's a 32X differential in land values within that city's borders.

Now, let's zoom out from the city itself. Within just a few hours drive or rail journey, we can easily get to 300X land values: $300 in Minato buys the same area of land worth around $1 in a fairly central district of a fairly large town in Nagano. Parts of mountains obviously go for much cheaper than land in these towns, but I don't have good market data for that. My guess is a further 5X - 10X.

Undoubtedly, it is more than 1,000 times, and perhaps sometimes as much as 10,000X, more expensive to buy a plot of land in Japan, than another plot of the same size just 500Km - 1,000Km away.

One may reasonably dispute these figures in detail. I did try to be conservative. Nevertheless, they are certainly right in the order of magnitude.

Getting back to your point, I would say that in spite of the wonderful societal benefits of world-class transportation within and between cities, if the goal was to achieve ball-park economic parity across the regions then that policy in Japan has been a failure. Income & expenditure? Sure ... all of Japan looks pretty consistent. Property valuation? ... the discrepancy is almost unfathomable.

That sounds like a lot, but 32x is probably less than the differential in the US between downtown manhattan and suburban Jersey or Delaware, and of course there's a whole rural level in the US far below that as well.

That said, the whole "tokyo is just turbo-expensive!" thing is, in the broad strokes, generally false. Buying land in high-density commercial districts is going to be expensive, just like if you wanted to build a detached single-family home in downtown manhattan, but to put some hard numbers to it:

In September 2020, the average listing price for a newly constructed detached wooden house in Tokyo of between 100-sqm and 300-sqm (1,076 sqft and 3,229 sqft) was:

https://resources.realestate.co.jp/news/how-much-does-it-cos...

> Greater Tokyo Area: ¥36,850,000 ($354,000)

> Tokyo (23 Wards + Western Suburbs): ¥42,880,000 ($412,000)

> Tokyo 23 Wards: ¥59,410,000 ($570,000)

> Tokyo western suburbs: ¥40,110,000 ($385,000)

> For July to September 2020, the average sales price for a previously owned detached house in Tokyo was:

> Tokyo (23 Wards + Western Suburbs): ¥46,150,000 ($443,000)

-This was a year-on-year increase of 5.5% and an increase of 14.6% compared to the April to June period, when sales dropped sharply due to coronavirus social distancing measures.

-This was also the highest average sales price since the July to September (3rd quarter) 2018 period of ¥47,020,000.

> Tokyo 23 Wards: ¥57,170,000 ($549,000)

-This was a year-on-year increase of 5.7% and an increase of 15.8% compared to the April to June period.

-This was also the highest average sales price since the July to September (3rd quarter) 2018 period of ¥57,170,000.

> Tokyo Western Suburbs: ¥32,730,000 ($319,000)

-This was a year-on-year increase of 10.1% and an increase of 5.7% compared to the April to June period.

Honestly those prices aren't bad at all for "the densest metropolis in the world", especially considering the excellent transportation and other infrastructure that remove the need for cars (and they have cheap healthcare/etc by US standards as well). That is for 1k-3k sq-ft detached family homes, so that's not $300k for a shoebox, that's $300k for an average home by western standards. Undoubtedly some difference in materials/etc but it's not uncommon to see houses going for $750k-1m in 2nd-tier or 3rd-tier tech cities in the city proper and $500k+ on the outskirts.

The bigger factor, by US standards, is that salaries are much lower, obviously that is a much bigger number if you're making $50k a year at the peak of your career, but again, with US housing prices generally being 2-4x japanese prices, it probably ends up being similar-ish.

I have a friend that was subletting a room who got the boot because the owner was selling, got $750k for an average single-family home in a second-tier or third-tier city with insane tax rates.

TIL my 69m^2 flat in a mid-sized Central European city is "worth" broadly the same as a larger house in the Greater Tokyo area :-O

In any place where house prices are mostly influenced by home buyers (not investors), the price trends upwards to the ceiling amount that people can afford on their interest repayments: that figure is constrained by income, interest rates, and the percentage of income that is spent on housing. Market sentiment also matters (tends to be less rational!)

Perhaps limited house prices in Tokyo are more a reflection of normal incomes of employees?

https://resources.realestate.co.jp/buy/guide-home-mortgage-l...

https://www.tytoncapital.com/projects/get-foreign-mortgage-h...

One of the reasons for the immigration is while Tokyo is an expensive city, its costs can be compensated with a tiny apartment. However, it's not necessary to live in Tokyo. Many of the surrounding cities commute to Tokyo on a daily basis.

https://en.wikipedia.org/wiki/Tokyo#Demographics "During the daytime, the population swells by over 2.5 million as workers and students commute from adjacent areas. This effect is even more pronounced in the three central wards of Chiyoda, Chūō, and Minato, whose collective population as of the 2005 National Census was 326,000 at night, but 2.4 million during the day.[91]"

If by surrounding cities you mean Yokohama, Chiba and Saitama it is practically the same city, it is all one big metro area and commuting by regular train from those cities takes about half an hour on average. Also, you don't really need tiny apartment, decent size places are not that expensive either if you are willing to live half an hour by train from the central areas of Tokyo.

> population swells by over 2.5 million

I'd imagine at least half of them wouldn't strictly need to be there but for cultural reasons.

Note that parts of somewhere like NYC are extremely expensive. Of course, those are the large parts of Manhattan and parts of Brooklyn where young professionals want to live. Other boroughs can be significantly less expensive but it's not what most professionals mean when they think NYC. Of course, the general point applies. If you're talking about a lower income job you can get just about anywhere, moving to many big cities isn't a great financial decision.

Point taken, but young people still move to larger regional towns. You may move to Houston, Atlanta, Kansas City, etc for economic reasons.

This is what can be accomplished with a homogeneous society. The US is too multicultural and has too many competing interests (both people and companies) for something like this to even be thought of.

Tokyo had tremendously expensive real estate before the 80s bubble burst, so I wonder if it's the result of wise planning as much as the outcome of the 30 years of stagnation.

Reply on news.ycombinator.com