After educating children since 1956, Kiyokawa Elementary School stands abandoned, its walls and roof crumbling because there are no longer enough pupils to fill it and the town can't afford to demolish the building.

The school, in Shonai, Yamagata Prefecture, is one of thousands of derelict buildings in Japan known as "haikyo," legacies of the boom years in the 1960s and '70s. As the populations of towns grow older or move to cities, indebted local governments have left the structures to rot, prompting Prime Minister Shinzo Abe's administration to come up with a novel solution: demolition bonds.

"This symbolizes the end of an era, the turnaround from a rising population to depopulation," said Akiyoshi Takumori, chief economist at Sumitomo Mitsui Asset Management Co. "The shedding of old structures is necessary for the rebirth of regions and will test their creativity."