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

When an aging population meets a low birth rate, an awful lot of housing gets left behind.

A girl looks at a vacant traditional Japanese wooden house in the town of Kamakura, outside Tokyo. (REUTERS/Thomas Peter)

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 population) 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.”

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.

(Courtesy Cityscape)

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.”

About the Author

  • Matt Stroud is a freelance journalist who often writes about the business of policing and incarceration.