Residences left empty posing problems across the nation

The population keeps aging and shrinking, but new housing keeps getting built even though Japan has a glut of unused dwellings.

There are various reasons for this anomaly, including decades-old tax incentives that compel landowners who live elsewhere to keep dwellings, even if they are uninhabited, standing instead of razing such structures, a society that prefers new homes over used, and developers who cater to this proclivity and build housing not designed for multiple generations, rendering the value of a used unit virtually nil.

The increase in vacant dwellings, particularly run-down firetraps, has the central and local governments scrambling to address.

According to statistics from the internal affairs ministry last July, vacant dwellings increased by 8.3 percent from five years earlier to 8.2 million units in 2013, growing faster than the 5.3 percent rise in total residential units to 60.6 million.

That vacancy rate represents 13.5 percent of all housing units, the highest-ever ratio, and means 1 in 8 dwellings is empty.

The ministry statistics, compiled every five years, show this ratio has grown nonstop from 2.5 percent in 1963: Vacant units have increased faster than total units during this entire period.

The Nomura Research Institute estimates that by 2023 the ratio of vacant residences will reach 21.0 percent, or 1 in 5, as the population continues to decrease. And during that time nearly 5.8 million new units will be built.

Alarmed by the situation, the Liberal Democratic Party-Komeito ruling coalition decided in December to end the preferential tax treatment that discourages landowners from razing abandoned dwellings.

How did the situation come about and what problems do vacant dwellings pose?

There are various reasons behind the plethora of vacant housing.

Dwellings may be in between occupants, or were inherited by people who live elsewhere, or their location makes them or the land they stand on hard to market. Owners and potential buyers may regard them as obsolete.

Problems arise when dwellings are left unattended and unmaintained, when owners have no plan to sell them, rent them out or move into them for a prolonged period.

The Nomura Research Institute relegates such abandoned units to the “other” category. They numbered some 3.18 million, or 5.2 percent, of total residential dwellings in 2013.

The institute expects the figure to rise to 5.03 million, or 7.5 percent, of a forecast 66.4 million units by 2023.

A home left unattended for many years poses safety hazards. It can fall apart inside and out, and even collapse, threatening adjacent dwellings. Abandoned housing also poses sanitation ills and affects local property values, and such dwellings, especially older units, are prone to earthquake and storm damage.

Empty houses are also easy prey for arsonists and burglars, experts note.

According to data from the Fire and Disaster Management Agency, of 25,260 structural fires that broke out in the first half of 2014, confirmed and suspected arson cases represented 17.1 percent of the total.

In November, for example, a fire that gutted an uninhabited house in Mito, Ibaraki Prefecture, also burned down an adjacent house. It was the fifth fire within a 2-km radius in a month whose cause investigators were unable to pinpoint. They thus suspected arson, according to the Sankei Shimbun.

Vacant dwellings can also be an invitation to criminal elements, including burglars, and when such structures become eyesores, they draw the wrath of neighbors worried about the impact on their own property values.

Why are houses left in disuse?

The nonprofit group Akiya Akichi Kanri Senta (Vacant Home and Land Management Center) lists on its website various reasons, key among them is when someone inherits a dwelling but lives elsewhere.

An elderly owner who has moved into a nursing home, for example, may opt before death to leave a house vacant in order for relatives to inherit the structure, if this makes sense tax-wise.

People also refrain from demolishing a vacant dwelling because higher property taxes are imposed on open land. If they live away from a property and can’t make productive use of it, they may also be disinclined to raze empty structures.

Why are uninhabited houses increasing?

Hidetaka Yoneyama, a senior researcher at the Fujitsu Research Institute, noted that the increase in vacant dwellings is also a legacy of government efforts to increase housing to address an immediate postwar shortage and subsequent high economic growth at a time when the population was rapidly increasing.

As government-backed low-interest housing loans and tax benefits on those loans triggered a massive supply of new dwellings, quantity took precedence over quality. Houses were built to last just 25 to 30 years, well short of the global standard.

Homebuyers have meanwhile been disinclined to renovate and move into existing homes, Yoneyama said.

When the population started to decline and vacancies increased, there were even fewer people willing to buy a used dwelling.

Adding to the problem has been the decline in extended families living under one roof. When offspring become adults, they move away instead of remaining in homes they stand to inherit, thus such dwellings later become vacant.

The upshot is empty houses are increasing even as new units are added to the market.

Further aggravating the situation is the deduction on fixed asset taxes. Owners of land with a dwelling, even empty, pay one-sixth of what they would owe if the land was vacant.

Initially introduced in 1973 to induce farmers to free up their land for residential development, this deduction has been blamed for making homeowners reluctant to tear down empty houses.

The ruling bloc finally decided in December to disqualify dwellings recognized by municipalities as “vacant houses with a problem” from getting the tax break. The measure is expected to be incorporated in the fiscal 2015 budget proposal slated for Cabinet approval on Wednesday.

What measures have been taken to address the issue?

Reflecting the extent of the problem, as of last April 355 prefectural and municipal governments, or about one-sixth of the total, had introduced bylaws on the issue.

The bylaws allow, for example, local governments to issue guidance or advise property owners on ways to remedy issues associated with vacant homes.

The Diet in November also passed a bill allowing municipal governments to take more forceful action.

The law allows municipalities to order the removal or repair of vacant homes that they deem problematic, particularly those at risk of collapsing or pose health hazards. If an owner does not comply, municipalities can take direct action.

In addition, local governments are now able to more quickly identify the owners of vacant homes using information on fixed asset taxation.

What other measures can be done for vacant homes?

Yoneyama of the Fujitsu Research Institute said a key solution is to encourage buyers to purchase used dwellings by improving their quality and economic attractiveness compared with new houses.

Many existing houses, he said, are not maintained because owners don’t consider selling them a priority.

Noting that moves are afoot in the used home market to keep better records on repairs that can be reflected in assessments, Yoneyama wants the government to offer larger tax incentives on loans for purchasing used houses than for new homes, and to introduce renovation subsidies.

Another idea is freeing up vacant dwellings for use as public housing. Many public housing complexes were built in the early postwar period and now need to be replaced, but tight government finances have led to delays.

Local governments and nongovernmental organizations are trying to help homeowners find people who can occupy or purchase their unused dwellings. They have created an “akiya” (vacant home) website that in particular looks to connect urbanites seeking to live in rural areas with owners of vacant dwellings in the countryside.