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‘No foreign tenants’ — and not much you can do about it

Landlords are within their rights to refuse to rent to foreign residents, but services are stepping in to bridge the gap

by

Staff Writer

With the potential tenant having made her decision after much careful deliberation, a real estate agent in Tokyo calls a property management company to check whether the 30-square-meter apartment in western Tokyo is vacant.

“Would the landlord mind having a foreign tenant?” the agent asks, and after a brief conversation, he looks across at the house-hunter, frowns sympathetically and crosses his fingers to form an X before hanging up. “Gaikokujin dame” (“No foreigners”), he explains, is the reason for the denial.

Nearly 40 percent of foreign residents who have looked for housing within their past five years in Japan have been through this soul-destroying experience of rejection, according to a recent Justice Ministry survey of non-Japanese living in the country.

The Japan Times asked expats to share their experiences of house hunting, and also approached some real estate brokers to find out why Japanese property owners so often refuse to rent to foreign residents. Are their decisions based on racial prejudice or could there be any valid reasons to justify landlords’ aversion to foreign tenants?

While some experts and real estate industry insiders said that some non-Japanese contribute to the status quo by disregarding the rules, others condemned what they saw as renters’ blanket refusal to consider foreign tenants due to the behavior of a few — or even based on mere rumors of such behavior.

Indiscriminate discrimination

Rent application denial was the most rampant form of prejudicial treatment cited by respondents in Japan’s first nationwide survey of discrimination against foreign residents.

The survey was sent out to 18,500 non-Japanese of various nationalities living in 37 municipalities across the nation at the end of 2016. A total of 4,252 individuals — or 23 percent of those sent the survey — provided valid responses. Of the 2,044 who had applied to rent apartments over the preceding five years, 39.3 percent said they had been denied because they were not Japanese.

The Japan Times canvassed foreign residents about their experiences, and of 63 readers who responded, 52 — or 82.5 percent — said they had been told or were convinced that their nationalities were the reason for a rental refusal. Only six had no such experience. Among those denied rental were applicants with one Japanese parent, spouses of Japanese nationals and even those with decades of work experience in Japan and permanent residency.

Wayne Arnold, a 30-year-old tenured associate professor of American studies at the University of Kitakyushu, said he had been denied the chance to see some apartments even though the real estate agent informed the owner about his occupation.

Ahmed, 30, who spoke on condition that his last name and North African country of origin be withheld, said his application was rejected after he submitted various documents containing information on his employment and income. He has a Ph.D. in engineering and works for an international company in Tokyo.

“In reality, even if you are highly skilled, with money, with a good job, there’s at least 60 or 70 percent … of the apartments that remain out of reach just because I am a foreigner,” he said in an email.

Meanwhile, Charles Kennedy, an American in his 20s, was looking for an apartment in April together with his Vietnamese partner, an engineer working with a Japanese e-commerce giant.

He recalls having been told through a real estate agent: “The American is OK, but we won’t accept a Vietnamese.”

Three days after the couple found a suitable apartment and submitted a rental application, the agent contacted them to inform them that the owners had rejected their application and chosen a single Japanese woman instead.

“I was a bit disappointed, but more than anything we were both just annoyed and frustrated. Needing to prepare all this extra paperwork or making sure we have a Japanese guarantor is a lot more difficult for foreigners than most Japanese people seem to realize,” Kennedy said. “We both have the funds to support ourselves. In the end it is just tiring and makes Japan feel all the more unwelcoming of us.”

Why landlords deny

Masayuki Yokote, manager of the land ministry’s Housing Support Division, says that in a recent survey of Japan Property Management Association members, 60 percent of respondents said they were reluctant to accept foreign tenants. The association represented 1,321 companies handling some 5 million properties as of April 2016. Just over 16 percent of respondents refused to accept foreigners, period.

Toshiyuki Nagai, a spokesman for a strategic business unit at Housecom Corp.’s headquarters in Tokyo’s Minato Ward, said that many landlords have long seen communication problems with foreign tenants as the main cause of disputes and troubles in the neighborhood.

“Communication issues between tenants and landlords or with neighbors often lead to deeper problems,” he said, adding that many landlords assume all foreign nationals are unable to understand information explained or written in Japanese.

As a 30-something Polish woman with near-native fluency in Japanese and over a decade’s experience living in Japan, I visited five real estate agencies in the cities of Tokyo, Saitama and Kawasaki.

All of the brokers, when they contacted property handlers to check vacancies, said that owners prioritized language skills, as they are crucial for ensuring smooth communication between the tenant and the landlord. However, my language skills, employment with a local company and time spent living in Japan failed to win over three out of 20 property managers contacted by the agents, who wouldn’t consider me as a potential tenant.

Housecom’s Nagai said that landlords complain about foreigners’ attitudes, claiming that many of them disobey local garbage rules and, for instance, directly dispose of cooking oil into the sink, transgressions that mean landlords have to intervene.

Real estate agents also said landlords complained about foreign tenants violating rental contract conditions. About 57 percent of members who responded to the JPMA’s survey expressed concerns about late rent payments from non-Japanese tenants. Incidentally, this also topped the list of concerns related to elderly or disabled Japanese tenants.

One in four respondents feared that foreign tenants would let in strangers, while only about 16 percent said they were concerned about communication troubles.

“Delinquency in payment is less common among foreign nationals than Japanese,” countered Housecom’s Nagai. “Apparently many of them are aware that causing trouble would cost them their place to live, and know how hard finding a new one would be.” Nagai says that in his experience, “when troubles occur, they are mostly caused by different lifestyles.”

Asked about landlords’ hostility toward foreign tenants, a broker from Tokyo’s Shinjuku Ward revealed that some owners changed their policies following the March 2011 Great East Japan Earthquake. He said many foreign tenants vacated their apartments amid uncertainty surrounding the Fukushima nuclear disaster and returned to their countries, leaving their belongings behind in their apartments. Some owners complained they had been left without any information about who to contact and how to return the tenants’ belongings.

Real estate agents also admitted that many landlords are prejudiced against people from Asian countries. One broker from the city of Saitama said that there was a tendency for tenants from some Asian communities to sneak in unauthorized tenants. He also recalled the case of an Asian tenant who, despite having good Japanese skills, pretended not to understand when it came to his landlord intervening over a sink overflow.

A 29-year-old German citizen of Taiwanese descent who requested his name be withheld said he had been denied a chance to visit nearly half of the apartments he was interested in renting back in early 2015. “Joe” works as an engineer at a large Japanese firm in western Tokyo. When he was looking for a new apartment to move into with his Japanese wife, who is of Chinese ancestry, the landlord rejected the application after noticing that his father-in-law’s last name was Chinese.

Joe’s father-in-law works as a professor at a top Japanese university and has been living in the country for around 30 years, “but this is of course not taken into consideration,” he said. He added that the agent “expressed his regret and told us that the landlord does not accept tenants related to China in any way.”

Several companies, including Mitsubishi Fudosan Co., Century 21 Japan Ltd. and Saitama Prefecture-based real estate broker Bridge Life Ltd., which offers services for foreign nationals, would not speak on the record about their agreements with landlords and their demands or declined to redirect the phone call to the relevant subsidiary.

Housecom’s Nagai, however, said that the common practice of disqualifying potential customers because they are not Japanese “also affects our business.” He pointed out that a large proportion of landlords are elderly — even in their 80s — and that some sow fear among their contemporaries by sharing their failed experiences with foreign tenants and gossipping.

Unnecessary obstacles

Although not all Japanese property owners deny rental to noncitizens, some impose extra conditions that are hard for many foreign nationals to meet. These often relate to the tradition of having a guarantor or a co-signer ink the rental contract, thereby agreeing to pay the rent if tenants fall behind or fail to pay for any damage they may cause.

English teacher Peter (not his real name) was required to pay double the regular deposit and key money, nearly doubling the upfront costs he needed to cover before he could move into his current apartment. Peter, a Kobe resident, was looking for a better location within the city to raise his daughter, and managed to find his current apartment with help from his employer, who signed the agreement with the company’s name and covered the upfront cost on Peter’s behalf, which he later repaid. In a phone conversation he said, however, that dodgy companies could potentially use such a debt as leverage against an employee in the event of troubles at work, a scenario that could even lead to disagreement over the property rights.

Many landlords also demand that foreign tenants supply a guarantor who is a Japanese national, which can also be a challenge, said Kennedy, the American who was looking for an apartment with his Vietnamese partner.

“Neither of us really have close friends who are Japanese,” he said. “We didn’t want to ask either his company, his co-workers.

“We are incredibly uncomfortable asking someone we are not close with to basically co-sign something like this. It feels almost rude, regardless of the person, to just ask suddenly, ‘Will you legally agree to pay the full amount of my lease if for some reason I stop?’ I mean, do Japanese people even ask people who are not their direct family to be guarantors?”

Housing estate listings make it clear that foreign tenants — and in some cases, pets — are not welcome.
Housing estate listings make it clear that foreign tenants — and in some cases, pets — are not welcome.

Landlords get free rein

Article 14 of the Japanese Constitution reads, “All of the people are equal under the law and there shall be no discrimination in political, economic or social relations because of race, creed, sex, social status or family origin.” Japan also signed the International Convention on the Elimination of All Forms of Racial Discrimination in 1996, but no law has been passed to address the issue of refusing to rent based on race or nationality.

Shoichi Ibuski, a lawyer with expertise in immigration and labor issues, confirmed there are no laws in Japan prohibiting property owners from rejecting applicants based on their nationality. This means landlords can freely advertise their properties with annotations clarifying that foreign tenants are not welcome.

Ibuski also pointed out that owners are also allowed to demand additional documentation or fees from non-Japanese applicants.

Although he is aware of cases where some foreign tenants have violated rental agreements, “this should not serve as a reason to deny rental to foreign nationals,” he said by telephone. “There are no grounds suggesting foreign citizens are more likely to cause any problems. I doubt there are any statistics proving that theory.”

In 2014, the Justice Ministry’s Kyoto Bureau dismissed a human rights violation complaint filed by a then 25-year-old Belgian student at Ryukoku University in Kyoto who was denied rental due to the apartment landlord’s no-foreigners policy.

The ministry concluded that Victor Rosenhoj’s treatment did not constitute a violation of his human rights and refused to pursue his case. Under Justice Ministry policy, its local bureaus can investigate complaints relating to human rights violations and resolve the dispute through measures that include engaging the concerned parties in dialogue, providing recommendations or educating people on the issue. But they don’t have the authority to take punitive measures.

“The practice of refusing rental simply because the applicant is a foreign national, regardless of what the law says, is unacceptable — it’s a very inappropriate and mistaken way of thinking,” Ibuski said. “I believe this is discrimination.”

He called the complaints that people of certain nationalities tend to lag behind in payment “nothing but prejudice.”

“Japanese cause the same troubles as foreign tenants do, which result from differences in age, birthplace or way of thinking. It’s not as if Japanese wouldn’t cause the same problems they believe foreigners would,” he said.

Open-door policy: A real estate agency above a Korean restaurant in Tokyo
Open-door policy: A real estate agency above a Korean restaurant in Tokyo’s Shin-Okubo district ‘welcomes foreigners.’ | MAGDALENA OSUMI

Breaking down prejudices

Housecom’s Tokyo office rents apartments from landlords under the company’s name, pays monthly rent and covers the costs of restoring the properties to their original condition, said Nagai.

As a property handler, the firm then rents apartments to foreign tenants and offers a guarantor company service, which requires tenants to pay an initial charge worth 50 percent of the monthly rent and a fixed yearly amount after renewal of the contract.

Nagai said these services are available only at the company’s Tokyo headquarters, and were introduced in response to the needs of those planning to relocate to Japan for work as well as newcomers from overseas. Housecom has about 160 agencies offices nationwide.

Nagai suggested that if foreign residents want to ensure the issue of nationality doesn’t cloud the rental process, they should seek help from agencies with services specifically geared toward non-Japanese tenants.

Tokizo Motojima of the Housing Support Division said the ministry plans to revise the guidebook it releases to inform foreign residents of rental procedures and residential regulations. The existing guidebook, released in 2009 and available in six languages — English, Chinese, Korean, Spanish, Portuguese and Japanese — was issued in order to address misunderstandings between foreign tenants and Japanese landlords.

“One goal was to reassure owners that renting to a foreign tenant is safe,” Motojima said. “It’s unacceptable for foreign nationality to be used as a reason for denying rental, and we’re trying to change the perception” that foreign tenants are a bother to deal with.

The ministry cooperates with some municipalities, which offer consultations and help foreign residents settle down with the support of local nongovernmental organizations that, for instance, provide rental service for foreign students.

“I think it would be great if Japan enacted some actual enforceable anti-discrimination laws,” said Kennedy. “Whether Japan likes it or not, more foreigners will come to Japan and the problem will just continue to grow if nothing is done. Owners still believe the stereotypes of foreigners as loud, wild or just unwilling to listen to rules or requests, and we are also seen as flight risks, regardless of our visas, partially because there is no formal immigration.”

Kennedy suggests developing an improved governmental support system for property owners to help them deal with non-Japanese and more efforts to educate the owners against believing the stereotypes about foreign tenants. He added that applicants should be allowed to meet the property owners face to face.

“I doubt that if an owner rented to a Japanese man that smoked inside, did not pay rent and was drunk all the time would say ‘I will never rent to a man again,’ so why should it be any different for a foreigner?” he said. “Changing public opinion is the only thing that can be done without forcing someone’s hand.”


Read a selection of reader responses to a survey about renting apartments in Japan. 

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