Reimagining Japan’s growing glut of empty homes | The Japan Times

Reimagining Japan’s growing glut of empty homes | The Japan Times

Reimagining Japan’s growing glut of empty homes
Entrepreneurs see an opportunity in Japan’s abandoned properties as businesses try to change them from liabilities into assets


In 2018, abandoned properties totaled 8.5 million units, or 14% of Japan’s overall housing stock, according to government figures. The Nomura Research Institute has estimated that this figure could exceed 30% by 2033. | KYODO




BY TIM HORNYAK


CONTRIBUTING WRITER



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Apr 4, 2022



An unlit house sits empty at dusk in a suburb of Tokyo, its surrounding garden completely overgrown with dense vegetation that hasn’t been cut back in years.

It’s a scene that can be found in many parts of Japan, as the number of akiya (abandoned buildings) swells to worrying levels nationwide.



In 2018, these structures — the result of unsustainable growth for several decades followed by sharp demographic decline — totaled 8.5 million units, or 14% of Japan’s overall housing stock, according to government figures. The Nomura Research Institute has estimated that this figure could exceed 30% by 2033.

According to government statistics, the total combined area of uninhabited properties in Japan is greater than the area of land on the island of Kyushu.

A part of the problem is that some property owners die without naming an inheritor. In other cases, the property has been left to a group of inheritors, including multiple family members, and one or more don’t want to sell the title, leaving buildings to sit empty.

An abandoned home in the town of Nachikatsuura, Wakayama Prefecture | KYODO

What’s more, some property owners simply move away from the area and fail to register a change of address, leaving municipal officials unable to locate a person with the authority to make decisions regarding an abandoned building.

In April 2021, the government overhauled its real estate registration law in a bid to tackle the growing problem of abandoned buildings.

The revisions sought to reduce the number of abandoned properties nationwide by introducing fines for property owners who failed to register an inheritor in the event of their death.

The changes also created provisions for the title of an abandoned property to be transferred to the government should the need arise.

A year later, what impact have these revisions had on the glut of empty houses in Japan? Industry analysts say they haven’t made a huge dent in the overall number of abandoned properties nationwide — and that’s part of the problem.

Its sheer enormity makes it tough to solve with the passing of a single piece of legislation. But that hasn’t stopped some private sector initiatives from showing some early signs of success.


Initial success

Wajima, a city of 23,000 on the Noto Peninsula in Ishikawa Prefecture, provides one such example. Faced with demographic decline and a growing number of vacant houses, the city teamed up with Bussi-En, a social welfare service corporation, to turn abandoned properties into vibrant community spaces.

Under the Wajima Kabulet brand, the project has renovated old residences and shops in the city center into facilities that include a soba restaurant, a medical and nursing care facility, a sports facility, a cafe catering to mothers and children, and a group home for women with disabilities. There’s even a guesthouse, a coworking space, a motorcycle garage and an old-fashioned hot spring complete with a community plaza in front of it.

The Wajima Kabulet project in Ishikawa Prefecture has renovated old residences and shops in the city center into facilities that include a soba restaurant, a medical and nursing care facility, a sports facility and a home for women with disabilities. | COURTESY OF BUSSI-EN

“Securing these properties from townspeople was very difficult because giving away land to strangers is frowned upon under traditional values systems,” says Manabu Sasaki, a spokesperson with Bussi-En. “But we have had many discussions with local residents, and now there is a flow of people returning to these areas. Young and old are using these facilities, fostering intergenerational exchanges.”

Wajima Kabulet has won accolades for its successful approach. For the vast majority of abandoned properties, though, municipal governments have struggled to solve the problem.

Conventional solutions include such things as akiya banks, listings of vacant buildings for sale or rent, as well as incentive programs offering properties free of charge (or close to it). The online akiya bank listings, where they exist, can be confusing and sometimes include opaque processes. Some municipalities require applications by fax. However, recent years have seen the emergence of private sector attempts to transform abandoned properties from a minus into a plus.

“The akiya problem itself is a structural one and akiya banks are a bit of a non-starter,” says Matthew Ketchum, an akiya enthusiast who lives in a former corporate retreat in the mountains of Izu. “They are run by municipal staff who are not licensed real estate agents or trained web designers.”

Ketchum is one half of boutique real estate enterprise Akiya & Inaka, which offers consulting services to those looking to buy abandoned homes. It has taken a unique approach by only listing a handful of properties and focusing more on first building a relationship with clients and then hunting for a property to suit their needs, usually a countryside retreat within an hour or two of an urban center. It can be more expensive than the akiya bank approach — the firm lists a luxury chalet in Minakami, Gunma Prefecture, for ¥50 million (about $410,000) plus fees — but Ketchum says the firm’s all-inclusive package guarantees success.

“The public sector has done what it can, so it’s almost certainly going to be the private sector that will provide solutions,” Ketchum says. “Speaking personally, I think these business interests have to work together to avoid turf wars. We need unity of some kind among not just the communities outside the metro areas, but also the vested interests operating in them.”


Worthless homes

At the other end of the price spectrum is Minna no Zero-en Bukken (Everyone’s Zero-Yen Property).

The platform provides an unusual solution by addressing some of the practical problems associated with uninhabited homes. For one thing, those who stand to inherit such properties may not want them. For another, they may be worthless. Meanwhile, the owners face a financial drain. Average annual residential property taxes in Japan are around ¥120,000, and then there are costs such as insurance, maintenance and inheritance taxes, not to mention demolition if the building is razed.

Minna no Zero-en Bukken is a matching service that pairs such properties, as well as plots of land, with prospective owners who pay nothing to acquire them except administrative fees and taxes.

Entrepreneur Ryo Nakamura says “one of the biggest problems with abandoned properties is a lack of awareness of the obstacles that owners face.” | KYODO

Entrepreneur Ryo Nakamura inherited a residence and shop following the death of his father in 2018. He had no use for it but the cost of dismantling the building was more than the land was worth. By chance, he met someone who wanted to start a juice stand, and was able to transfer the property free of charge. He realized it was a win-win transaction and launched Zero Estate, an operating company for Minna no Zero-en Bukken, in 2019.

“One of the biggest problems with abandoned properties is a lack of awareness of the problems that owners face,” Nakamura says. “Many properties that could not be distributed through conventional real estate sales are being traded on our site. I think we’re providing unprecedented services that will please both those who want to dispose of real estate and those who want to use it for a new purpose.”

The buildings on Minna no Zero-En Bukken may not appeal to some. One listing is a decrepit, cramped house in Tokyo’s Kodaira City that was built in 1973. With a weed-choked lawn and dusty rooms full of old furniture, futons and even family photos, acquiring it would be a labor of love. Nonetheless, it found a new owner.

So far, the site has listed more than 400 properties, all at zero yen, of course, and 90% have been transferred.

“Japan is in a phase of rapid population decline, and while the number of vacant houses is increasing, new housing continues to be built, and many people are demanding it,” Nakamura says. “I feel that supply and demand is out of balance. Slash-and-burn town development is still underway, and I think many people need to think about how to reuse land and buildings. Through the operation of the site, I’d like to present an opportunity for everyone to think about this issue.”

ADDress operates a membership-based service through which users can stay at uninhabited properties like this house in Chiba Prefecture. | COURTESY OF ADDRESS
Subscription accommodation

ADDress is another startup taking a different spin on abandoned properties. It operates a membership-based service through which users can stay at a shared akiya as long as they like. It’s a bit like Airbnb in that you can choose among rentals across Japan, but there’s a monthly membership fee of ¥44,000. The service was launched in April 2019 and now has more than 220 properties nationwide. They include renovated buildings as well as vacant rooms in inhabited residences and inns that have been hit hard by the pandemic ban on inbound tourists.

The platform is not only aimed at turning Japan’s excess accommodation capacity into an economic asset, but fostering a sense of community among users and locals. To that end, each property has a manager called a yamori, a term meaning “gecko” but used in the sense of its kanji, which signifies “house guardian.” The yamori are like concierges who can offer tips on local points of interest, events and activities.

“We have many members who live alone in large cities, and who aren’t familiar with rural areas, so communication is very important, and that’s where our yamori help members feel at ease,” says ADDress spokesperson Satoko Sakurai. “Our rural shared houses stand out because they’re places where people of different ages and walks of life can meet and enjoy the space together.”

ADDress was founded by Sabetto Takashi, an entrepreneur who enjoyed living in a shared house in Tokyo and wanted to form a nationwide network for sharing. He saw his chance in abandoned properties.

ADDress doesn’t own its listed properties but rents them from owners after they agree to renovate their vacant houses. The rental income helps owners defray property taxes and other costs.

Industry analysts say revisions to real estate registration law 12 months ago haven’t made a huge dent in the overall number of abandoned properties nationwide. | KYODO

For users, the prospect of escaping the concrete jungle and living in a rural environment is especially appealing to a growing number of people working remotely in Japan. Sakurai compares the lifestyle to that of the titular traveling salesman in the long-running “Tora-san” film series.

“Staying in these wonderful places really helps me unwind,” Takefumi Tagaki, a surfer and urban planner who has worked out of an ADDress property by a beach in Chiba Prefecture, told NHK. “It lets me focus more on my work when I need to.”

During the pandemic, ADDress saw its member registration rate triple. The company has won several awards for its innovative service, and has even won praise from others in the industry.

“If there’s a positive story to tell about how you can turn the akiya problem on its head into a viable business … these guys made something that did not exist before,” says Parker Allen, the other half of Akiya & Inaka.


Nurturing a new market

As perceptions about abandoned properties slowly change, industry information may become valuable. Another startup is banking on that.

Tokyo-based consultancy Akiya Katsuyo is the brainchild of CEO Takamitsu Wada. As a salesman with a house-building company, he visited the abandoned coal mine island of Gunkanjima off Nagasaki Prefecture, now a UNESCO World Heritage Site, and was struck by its crumbling apartment blocks, once regarded as cutting-edge housing in Japan.

After a soul-searching discussion with colleagues, Wada wondered whether real estate companies and home builders were unwittingly creating future ghost towns, just like Gunkanjima, across the country.

“Considering the future, 30 or 40 years from now, and what we leave behind for our children and grandchildren, I began to think about doing something differently,” Wada says. “The akiya problem is enormous, but by turning it into a business, there’s also the potential of having an enormous market.”

In 2014, Wada launched Akiya Katsuyo, a name that means using vacant houses. It offers paid access to a database of tens of thousands of vacant properties across Japan as well as consulting services on how to manage and dispose of such structures.

This large vacant house in Niigata Prefecture is more than 100 years old and comes with its own carp pond. It was featured in a YouTube video by consulting company Akiya Katsuyo. | COURTESY OF AKIYA KATSUYO

The company aims to go public and is now teaming up with local governments to tackle rising problems associated with vacant homes. It has joined with Tokyo’s Setagaya Ward to provide consultations for people struggling to deal with more than 50,000 uninhabited properties in the ward, the highest tally of any municipality in Japan. It’s a free service for those who have inherited houses and are considering selling or renting, or simply don’t know what to do.

Wada acts like a coach on abandoned properties. He cites an example in which a mother and five adult children inherited a house in Hyogo Prefecture after the father passed away.

The family couldn’t agree on what to do with the property and, as the siblings squabbled, the property taxes went unpaid. Finally, one daughter sought out Wada, who warned that the house would deteriorate badly without a swift remedy. She was able to persuade her siblings to talk about the problem and agree to sell the property.

Wada is a colorful character who posts YouTube videos of his visits to abandoned buildings. They include a luxurious, traditional tiled-roof house by a river in Miyazaki Prefecture, a vacant commercial property on its own mini-peninsula in Kochi Prefecture and a large home in rural Miyagi Prefecture with its own barbershop.

Wada’s enthusiasm for vacant properties shines through in the videos. Could there be a brighter future in akiya after all?

“There are many wonderful properties in Japan’s rural areas as well as cities such as Tokyo,” Wada says. “We have to connect them to people who want to make use of them and, in that way, try to revive communities. Property is not just about money, but culture and nature as well. It’s that value that we would like to leave to posterity.”