OSAKA — The financially strapped Osaka Prefectural Government will sell off all of its 1,185 employee housing units and its seaside resort in a bid to raise cash and narrow its gaping budget deficit, sources said Thursday.

The prefecture, on the verge of being declared an “organization for fiscal reconstruction” — the equivalent to a private company filing for bankruptcy — hopes to raise several billion yen by selling the land and apartment buildings, where monthly rent is just 15,000 yen for the largest units and a mere 1,500 yen for the smallest.

All current occupants will have to vacate by fiscal 2004.

It is the first action of its kind to be taken by a prefectural government, according to Osaka officials.

The drastic plan, introduced as part of administrative and financial reform, involves the sale of 53 family apartment buildings and four single-person apartment buildings spread over 22 locations in the prefecture. The family residential facilities have 970 apartments and the single-person facilities 215 apartments.

Osaka also plans to sell off its recreational facility in the seaside resort of Shirahama, Wakayama Prefecture.

Prefectural employees who live in the housing pay 15,000 yen a month on average for a so-called 3DK (three rooms plus a dining and kitchen area) apartment. The rent for a one-room apartment is 1,500 yen per month.

“Considering the tight financial situation, the decision was inevitable, especially now that these buildings are old. Also, finding alternative housing is no longer as hard as it used to be,” the prefecture’s welfare department said in a statement.

The prefecture plans to refer the current occupants to prefecture-run apartments, which are more affordable than private housing.

With the decision to liquidate its employee housing facilities, Osaka plans to unify the prefecture’s employee housing allowance system, setting the upper limit at 27,000 yen per month.

Osaka Prefecture is in dire financial straits, having chalked up a 37.3 billion yen deficit out of a 2.7 trillion yen ordinary budget in fiscal 2001.

Osaka suspended employee pay hikes in fiscal 2001, and as a result, its workers have become the lowest-paid prefectural employees in Japan.

The prefecture’s belt-tightening measure has drawn sympathetic voices from the rank-and-file.

“It’s tough to face eviction on top of a pay cut. But I suppose it’s inevitable, considering how bad the private sector is doing these days,” said an Osaka prefectural employee who lives in prefectural housing.

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