How Japan gets it right on housing

Japan is often seen as an exotic oddity among the major developed nations. Though not as well known as manga or sushi, the Japanese housing market is no exception.

Japanese architects let their imaginations run free: just look at Reflection of Mineral by Atelier Tekuto. Designers in Japan are not held back by paying homage to history or a desire for extreme longevity. Buyers do not need extensive permission to demolish their house and construct them anew—so they do it a lot. And in spite of government incentives for durable housing, the disposable-home culture has boomed. Projects like Reversible Destiny Lofts indicate a willingness to move rapidly with the times.

Like many Japanese crazes you come across online, these hyper-modernist and experimental schemes are not typical across Japan. In rural areas machiya (traditional wooden housing) is far more common. The price of these houses is surprisingly low, and even falling. The country's population has begun to decline, and rural areas like Kyoto prefecture have seen emigration to the country's capital. The attraction of the hustle and bustle of Tokyo, not to mention its economic dynamism, has pulled resdients away.

In spite of this mass migration, rents property prices in Tokyo have barely changed, and apartments are getting bigger. Relaxed regulations have underwritten a free and elastic housing supply: when there a plot can be put to a better use than it current one, it is legally easy to knock it down, extend it up, or switch it to a new use. Both the relative lack of deference to historical preservation, and the cheap housing, are in stark contrast to the situation in London, San Francisco, or other major metropolieses.

This is creating a sharp divide between rural and urban Japan. Few actually demolish their empty houses in the countryside, due to waste disposal laws that the Japanese government is only now overturning. But there are still around 8 million unoccupied buildings in Japan, according to a government count — a far cry from the British worry about second houses and foreign ownership. Towns with large numbers of abandoned houses have been dubbed ghost towns.

Japan is yet further proof that reports of the death of the traditional city were greatly exaggerated. The job market in urban Japan is still sucking in workers: now 45% of Japan's entire population lives in just three city regions: Tokyo, Osaka and Nagoya. Herd mentality has furthered the divide: the greater the number of people living in an area, the more economic relationships they can have, the more they are paid, and the more stuff they can buy. On top of that, other young people move for fear of being left behind.

The economic disparity is widened by lower levels of "parasite singles" (パラサイトシングル)—those living with their parents well into adulthood—in cities. In Tokyo it is increasingly common for unmarried women to buy or rent flats on their own indefinitely—significant when the group has faced so much stigma for so long. This would be impossible without the low prices and wide choices that such a liberal supply affords.

Japan's housing market is full of contrasts—Tokyo's modern buildings versus machiya, disposable-houses versus ghost towns—but at both ends they've managed to do something the West seems incapable of: keep housing affordable!