Abstract
In Japanese, 空き家(Akiya) are houses that are abandoned or unoccupied, earlier found mainly in rural areas but now even in the urban cores. The case of these rising vacant properties is worth examining in light of economic instability, institutional mechanisms and policy shifts as Japan enters its post-growth era. Primarily drawing on Yosuke Hirayama and Misa Izuhara’s book titled “Housing in Post-Growth Society: Japan on the Edge of Social Transition”, this essay discusses the challenges against the Japanese housing system and its consequent social inequalities in line with prolonged economic stagnation, demographic changes, and neoliberal policy reforms.
Script
Nagiko - 60 yr old Osaka resident planning to lease out her Akiya.
Adeline - chef from Singapore working in Japan.
Mikio - real estate agent from Ject One Co. Ltd. mediating the property lease.
(Situated accounts of three real people with fictionalised profiles)
Adeline - chef from Singapore working in Japan.
Mikio - real estate agent from Ject One Co. Ltd. mediating the property lease.
(Situated accounts of three real people with fictionalised profiles)
Act I, Winter 2021
Nagiko - “My neighbour suggested I consult you to take care of my property. Now, how do we proceed with it?”
Mikio - “We are happy that you chose our Akisapo service. What we will do is rehabilitate your property into an income producing asset on your behalf, by first renovating and then subleasing it. May I know why you are not using it at present?”
Nagiko - “I am now in my 60s and cannot take care of this house myself. It was used by my father as an office before. He passed away and since then I had no choice but to leave it empty. It has been unoccupied for 7 years so I am glad to finally put it to some good use. But I have no clue on how to fix it or how I can find a new tenant for it.”
Mikio - “You need not worry about any of that. We will do the repairs and then advertise it with new photos that make the place look attractive. You will bear no financial burden during this process. Finding a new tenant is the next part of our job. When we successfully land a house lease, you get to keep a portion of the rent and we take the rest of it for ourselves since it is needed to cover all the renovation costs and make us a profit. Once the renovation costs are recovered, all property rights will be returned to you and you keep 100 percent of the rent.”
Nagiko - “Well then, I trust you with it and hope you find a loyal tenant!”
Nagiko - “My neighbour suggested I consult you to take care of my property. Now, how do we proceed with it?”
Mikio - “We are happy that you chose our Akisapo service. What we will do is rehabilitate your property into an income producing asset on your behalf, by first renovating and then subleasing it. May I know why you are not using it at present?”
Nagiko - “I am now in my 60s and cannot take care of this house myself. It was used by my father as an office before. He passed away and since then I had no choice but to leave it empty. It has been unoccupied for 7 years so I am glad to finally put it to some good use. But I have no clue on how to fix it or how I can find a new tenant for it.”
Mikio - “You need not worry about any of that. We will do the repairs and then advertise it with new photos that make the place look attractive. You will bear no financial burden during this process. Finding a new tenant is the next part of our job. When we successfully land a house lease, you get to keep a portion of the rent and we take the rest of it for ourselves since it is needed to cover all the renovation costs and make us a profit. Once the renovation costs are recovered, all property rights will be returned to you and you keep 100 percent of the rent.”
Nagiko - “Well then, I trust you with it and hope you find a loyal tenant!”
Act II, Summer 2022
Adeline - “I have been working in an Osaka-based restaurant for many years now. Recently I entered into a partnership with our owner and decided that I will be opening an ice cream shop as their subsidiary. I saw this property on your Akisapo website and immediately saw its potential.”
Mikio - “Then you have chosen the right place! It is over 50 years old and we found it in a deteriorated condition, but now we have completed all renovations.”
Adeline - “It is located in a popular area as well! You must have gotten many requests for it.”
Mikio - “Yes we have been receiving inquiries, but mostly from foreigners living in Japan who think buying an Akiya will grant them automatic residence status. They wish to buy the property but they cannot get a bank loan, for which they must have a permanent residence or working visa. Moreover, since most Akiya’s are older, loans cannot be used. You must pay in cash. You have been working here for 6 years, so I assume you do not have any of those issues.”
Adeline - “Correct! The internet has been awash in articles about Akiya for several years now. I can tell that the government is anxious to sell off these properties.”
Mikio - “Yes indeed. In the past, getting information on vacant houses was difficult, so no one believed that such premises would make a profit. Now, the central and local governments have begun to act over this issue, fearing the buildings could collapse or catch fire if left unattended. This has encouraged the spread of both state-led and private real estate companies.”
Adeline - “Why were all these Akiya’s not sold before? There are so many people here who cannot afford to buy a house.”
Mikio - “That is because there are a lot of restrictions, thanks to our state housing policy. For example, in Tokyo, there are sometimes requirements that favour younger families as tenants with a married couple under 43 years old, and with children not older than middle school age. That’s where the private real estate sector saw the potential to help clients overcome the regulatory hitches and skewed market dynamics. The upsurge of Akiya’s began as a problem but now we are making an opportunity out of it. We chose to be the caretakers of these broken homes.”
Adeline - “I have been working in an Osaka-based restaurant for many years now. Recently I entered into a partnership with our owner and decided that I will be opening an ice cream shop as their subsidiary. I saw this property on your Akisapo website and immediately saw its potential.”
Mikio - “Then you have chosen the right place! It is over 50 years old and we found it in a deteriorated condition, but now we have completed all renovations.”
Adeline - “It is located in a popular area as well! You must have gotten many requests for it.”
Mikio - “Yes we have been receiving inquiries, but mostly from foreigners living in Japan who think buying an Akiya will grant them automatic residence status. They wish to buy the property but they cannot get a bank loan, for which they must have a permanent residence or working visa. Moreover, since most Akiya’s are older, loans cannot be used. You must pay in cash. You have been working here for 6 years, so I assume you do not have any of those issues.”
Adeline - “Correct! The internet has been awash in articles about Akiya for several years now. I can tell that the government is anxious to sell off these properties.”
Mikio - “Yes indeed. In the past, getting information on vacant houses was difficult, so no one believed that such premises would make a profit. Now, the central and local governments have begun to act over this issue, fearing the buildings could collapse or catch fire if left unattended. This has encouraged the spread of both state-led and private real estate companies.”
Adeline - “Why were all these Akiya’s not sold before? There are so many people here who cannot afford to buy a house.”
Mikio - “That is because there are a lot of restrictions, thanks to our state housing policy. For example, in Tokyo, there are sometimes requirements that favour younger families as tenants with a married couple under 43 years old, and with children not older than middle school age. That’s where the private real estate sector saw the potential to help clients overcome the regulatory hitches and skewed market dynamics. The upsurge of Akiya’s began as a problem but now we are making an opportunity out of it. We chose to be the caretakers of these broken homes.”
Property bubbles in Japan’s post-growth society
Since housing systems are embedded in the broader context of socio-economic, demographic, political and institutional changes, it is one of the key elements that reflects and traces the transitional processes to a post-growth society (Forrest and Lee, 2003). As Hirayama and Izuhara (2018) note, housing is a foundation of social change. Like other mature economies in our globalising world, Japan is now entering the post-growth age and hence its housing system has begun to face increasingly uncertain economic conditions. Its prolonged economic stagnation, a shrinking and ageing population, and neoliberal policy shifts, are the key ingredients shaping its post-growth social transitions (Hirayama and Izuhara, 2018).
Post-war Japan suffered an acute housing shortage through the 1960s, prompting the government to enact legislation that promoted homebuilding and encouraged nuclear families to purchase their own home (Hori 2022). The shortage ended by 1973 and the imbalance between housing demand and supply was rectified. However, a new period of housing surplus began in the 1980s as a way of stimulating economic growth through mass construction. Daly’s (1999) theory is starkly visible in this case, wherein the country pushed for economic growth using GDP as an indicator of public policy success but instead led itself to ‘uneconomic growth’. Japan’s bubble economy grew with an extreme rise in real estate prices in the 1980’s and burst in the 1990’s. During the growth era, home ownership generated capital gains and facilitated asset accumulation. When the bubble collapsed, most owner-occupied dwellings were devalued and generated capital losses. Housing assets were no longer secure and this undermined the system of climbing the property ladder. Moreover, the Asian Financial Crisis (AFC) in 1997-98 and the Global Financial Crisis (GFC) in 2007-08 further affected property bubbles, throwing the post-war housing system into chaos. As Savini et al. (2022) observes, “the 2008 economic crisis proved that housing is a central socio-economic pillar upon which the infrastructure of financialised capitalism and debt-economy rests” (Savini et al. 2022, 9).
The number of existing dwellings in Japan doubled from 31 million in 1973 to 61 million in 2013, while the vacancy rate increased from 5.5 per cent in 1973 to 13.5 per cent in 2013 (Hirayama and Izuhara, 2018). Japan’s housing glut is expected to hit a 10 million surplus by 2023. According to the Nomura Research Institute, it is estimated that one-third of all homes in Japan will be vacant or abandoned by 2030 (Hori 2022). Urban economic growth as seen in Japan, obscures a much more complex and pessimistic socio-economic picture (Savini et al. 2022, 3-4).
Housing policy and social stratification
In addition to economic crises, cultural shifts in Japanese society, such as decline in conventional marriages are transforming patterns of family formation and household structures; posing a fundamental challenge to the home ownership model. An increasing number of young, unmarried adults without secure employment have continued to live in their parents’ homes indefinitely. Such anomalies are a result of the government’s family-oriented housing policy which excludes non-conventional households (Hirayama, 2003).
Another issue in Japan is the phenomenon of societal ageing as a result of low fertility and increased longevity; leading to a substantial decline in those who are of ‘productive’ age. These demographic changes have accelerated economic downturns and have encroached upon its housing and planning policies. Some young people can buy properties with financial support from their parents but others cannot. Among elderly households, although the vast majority live in their own houses, the ageing
population means an increase in the number of older people living in rental accommodations. High-income older members, as seen in the case of Nagiko, often possess additional properties that produce rent incomes, whereas low-income elderly people have to bear the burden of rent payments while living in substandard private rented housing (Hirayama, 2010). Piketty’s (2014) research on social inequality shows how the redistribution of existing family wealth becomes a driver of social stratification in developed societies. The largest share of family wealth for average families is real estate assets and hence, in economies that have a large housing stock, the distribution of housing wealth across generations dictate how society is stratified (Kurtz and Blossfeld, 2004).
population means an increase in the number of older people living in rental accommodations. High-income older members, as seen in the case of Nagiko, often possess additional properties that produce rent incomes, whereas low-income elderly people have to bear the burden of rent payments while living in substandard private rented housing (Hirayama, 2010). Piketty’s (2014) research on social inequality shows how the redistribution of existing family wealth becomes a driver of social stratification in developed societies. The largest share of family wealth for average families is real estate assets and hence, in economies that have a large housing stock, the distribution of housing wealth across generations dictate how society is stratified (Kurtz and Blossfeld, 2004).
Rentals and second-hand properties, or the lack thereof
Japan's housing policy has been characteristically tenure based and the government has hardly taken efforts to support the rental housing sector (Hirayama, 2014). Public funds for housing were concentrated on middle- to high-income households that wished to purchase a house and the tax system was advantageous to those who bought new houses. This was rationalised and justified as a means to climb the property ladder while blatantly marginalising low-income households. Such institutional mechanisms discouraged the development of the second-hand property market. Only after sensing the urgency of population decline and increasing vacant dwellings, the government began to expand second-hand property transactions in the 2000’s. Their policy shifts have led to slow improvements in terms of marketability of the existing housing stock (Hirayama and Izuhara, 2018). It might take longer still, to fundamentally change their construction-oriented market structure and disentangle planning from a growth-dependent paradigm (Savini et al. 2022, 5). The demand for older homes is weak, since most of them are in dilapidated conditions and buyers are aware of the costs it would incur to renovate one. Unlike in Europe or in the U.S., old houses do not have much historical value and are not appreciated or evaluated by homebuyers (Hori 2022). Even with the preservation laws, there are very few which protect heritage architecture or valuable old structures. The Akiya’s are in need of human tending, but that is missing at many levels, from the administrative and political down to the ground level (Jason, 2021).
Millions of Akiya’s are spread throughout Japan, but the rural prefectures of Kagoshima, Kochi, Tokushima and Wakayama have the most. These provincial cities and smaller towns are shrinking and undergoing declines in housing markets due to disinvestment and outflows of population (Pallagst et al., 2014). Within the context of pervasive neoliberalism and international economic competition, the Japanese government has implemented special emphasis on the redevelopment of Tokyo as a global city. This has produced economic and spatial disparities between Tokyo and the rest of the country and within Tokyo itself; where housing investments are pouring into the central ‘hot spots’ of the city while the peripheral ‘cold spots’ of the city continue stagnating (Hirayama and Izuhara, 2018).
Policies of reuse
Although the population is shrinking, demographic and cultural changes are yet producing more ‘households’ who are in need of homes (Hori 2022). If renovated and refurbished, these houses could be bought or rented by elderly people and single-parent households who often struggle to find homes. With companies like Ject One, the act of maintenance and repair has already taken on a new resonance (Mattern, 2018). Real estate companies are essentially ‘hacking’ through neoliberal policies to resell Akiya’s and similarly, post-growth planners could also utilise legal frameworks creatively to generate new tenures beyond the public-private distinction (Savini et al. 2022, 11).
In 2015, Japan’s parliament adopted the Vacant Houses Special Measures Act, a law that promotes the demolition and reuse of abandoned houses (Umeda, 2014). This act authorises the municipal government employees to enter and investigate any vacant house that they believe poses a threat to the neighbours, severely lacks aesthetic value, appears to be collapsing, or contains fire and sanitation hazards (Vacant Houses Special Measures Act, Article 2 & 9). Municipalities are running their own ‘Akiya banks’ where they list abandoned homes on websites to provide information for the public and promote reuse of these properties (Id. art. 11- 13). They may recommend the owners to maintain or demolish the property and if the owners still do not take adequate action, the authorities can sanction its demolition and demand payment for the costs. (Id. art. 14). As Mattern (2018) writes, the Akiya breakdown is post-growth Japan’s epistemic and experiential reality.
Maintaining and caring for the Akiya’s
Japan has the most mature society in East Asia in terms of socio-economic and demographic developments and political institutions (Hirayama and Izuhara, 2018). Its shortcomings in the housing market thus serve as an important warning sign for other cities that are following a similar path of economic growth. Growing inequalities which are a result of home ownership structures need to be addressed by fundamentally reevaluating housing policies in emerging post-growth societies. Although it is a bureaucratic provision, the Vacant Houses Special Measures Act is one step in the right direction and gaining traction as a method of taking care and repairing properties. It proves that if we use ‘care’ as a framework for the policymakers and businessmen who regulate the market, and for the citizens who participate in its democratic platforms, we might succeed in building more equitable and responsible systems (Mattern, 2018). Simultaneously, allowing some of these properties to be decayed and demolished may be a favourable practice in the ecological context. The Akiya Banks and Akisapo services have created a multiscalar maintenance system - whether it is renovating an old house or organising the database of vacant properties on a website (Mattern, 2018). Going further, one might then ask Graham and Thrift’s (2007) critical question- what exactly is being maintained? Is it the Akiya itself or a negotiated order that surrounds it? Or a larger entity that maintains the order?
References
Ject One Co. Ltd. https://jectone.jp/
Nagano city’s state-led Akiya Bank http://nagano-akiyabank.jp/search/
A private Akiya Bank https://www.koryoya.com/
Nagano city’s state-led Akiya Bank http://nagano-akiyabank.jp/search/
A private Akiya Bank https://www.koryoya.com/
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