Japanology Plus

Hello, and welcome to Japanology Plus.
I'm Peter Barakan.

Today we're doing a follow-up on
an earlier episode about vacant homes,

which are a nationwide problem.

A government report is due
to be released later this year,

and the number of empty properties
is expected to exceed ten million.

At the same time,

people are coming up with all kinds of
ideas to take advantage of vacant homes,

and on today's program we'll take
a look at some of those initiatives.

New Roles for Vacant Homes

Nakagawa-san, nice to see you again.

Hello. It's been a while.

Nakagawa Hiroko, a returning guest,
is a writer and journalist.

She has covered real estate investment
and vacant homes for over 30 years

and is involved in a government project
that's tackling the issue of vacant homes.

We talked about a year ago
about this same problem.

How much has changed in the meantime?

When it comes to vacant homes,

we have to think about Japan's population.

It's decreasing and aging,
which is a big problem.

In 2023, the number
of births and marriages

fell by over five percent
compared to the previous year.

Meaning that there will be
fewer and fewer children,

and then of course population
aging will accelerate.

Now, the situation regarding vacant homes.

A 2015 study estimated that there
would be 20 million of them by 2030.

That would be one in three homes—
a dramatic prediction.

But the situation isn't quite that bad.

In Japan, a “vacant home”
is defined as a property that

has remained totally unoccupied
for at least a year.

And the number of such homes
is constantly increasing.

A 2018 survey stated that there
are around 8.5 million of them,

which is one in seven homes.

Right at the beginning of this year,

there was a serious earthquake
in the Noto Peninsula.

A year before that,
I actually inspected housing in that area.

The official database of vacant homes

shows that even the newer vacant
properties there are 30 years old;

the older ones are 50 to 60 years old.

They've been neglected for so long
that their condition has deteriorated,

and they're at risk of collapse.

Right.

If they do collapse, they block roads.

Help can't get in,
and people can't get out.

The rubble is also a fire hazard.

Since that earthquake,

I believe there's been an increased
awareness of the dangers

that vacant homes can pose in a country
that's so prone to natural disasters.

Against this backdrop of vacant
homes posing various forms of danger,

in 2023 the government revised
legislation relating to vacant homes.

Properties at risk of collapse
were already subject to regulations.

Properties with minor problems,
such as one broken window,

are now subject to similar guidelines.

So for example what kind
of penalties would be exacted?

Previously, the property
tax for a vacant home

might be only around
one-sixth of the full rate.

But now, if the home is damaged
in any way, that tax break will not apply.

These days numerous
initiatives around Japan

reflect a positive attitude to
the value of vacant homes.

One approach is to buy an old
vacant home at a bargain price,

renovate it, and make
money by renting it out.

This real estate investor, who prefers
to remain anonymous, got started in 2022.

Today she's visiting
a newly renovated home

about 60 kilometers
south of central Tokyo.

Wow!

This is amazing.

It's a 59-year-old, one-story building.

Before the renovations,
it was dirty and needed a lot of work.

Now, it's spotless.

And it has a new open-plan layout.

The property cost two million yen to buy,

and six million to renovate—

so eight million yen in total.

If she rents it out
for 80,000 yen a month,

she will earn 960,000 yen per year—

a 12 percent yield on her investment.

She had concerns about the future

and was looking for a way to
make some money on the side.

I currently work full time,

but I'm worried about
what will happen when I get older.

I'm not sure I can keep working
at my current pace.

That's what prompted me
to start investing in real estate.

I wanted a little financial breathing
space, some leeway in everyday life.

This style of investment
is drawing attention.

These days, tours of vacant homes
are being arranged in and around Tokyo.

They're popular with office
workers and homemakers,

and they're typically fully booked.

Next, we visit Higashiosaka.

A lot of people here commute
to the adjacent city of Osaka,

but as the population declines,
the number of vacant homes is increasing.

Hello.

Hello.

Hello.

This is Okuma Shigeyuki.

Okuma seeks out suitable
properties all over Japan

and supports the process
of investing in them.

I understand that more and more people
are now interested in

investing in vacant houses.

Yes, there's a huge increase every year.

So far, 15,000 people have
signed up with my association.

This place was purchased by an investor
but has yet to be renovated.

It's a 47-year-old three-bedroom house
with a floorspace of 50 square meters.

It's been vacant for two years.

It's in good shape.

Yes, but not the floor. It's not level.

It's a bit dirty,
but it doesn't look too bad.

Before it's rented out,
the interior needs to be redone.

The floor plan needs to be re-designed.

The idea is to create a space
where anyone would like to live.

So that means taking out some walls.

Structurally, is that possible?

Load-bearing walls will be left alone.

A building company will do the work,

and that company will ensure
that there won't be a problem.

Yes, of course, yeah.

Let's look at the kitchen.

The floor is uneven. Can you see?

Stand on this part.

Oh yeah.

Yeah, you can see it is...

so what do you do about that?

We'll make it level.

If it had sunk down a lot more,
there'd be nothing we could do.

But fixing this degree
of unevenness is no problem.

A layman might think
that this is hopeless!

But professionals can make
most places look nice—

even if non-experts think it's impossible.

I can understand that too, yeah, sure.

Next, the bathroom.

Removing all this,
and installing an all-in-one unit,

would be extremely expensive.

So the bath will just be spruced up.

And the walls will be repainted.

That helps keep the cost down,
which is a key point.

With walls like this,
it's OK just to replace the wallpaper.

No more work than that.

The floor is fine as-is, too.

Deciding what to do, and what not to do,
is an important call for the investor.

So if you want to buy
a property like this one,

roughly how much is it going to cost you,

and how much more outlay
is needed to make it rentable?

This property was sold
for 1.7 million yen.

And the renovation will
cost 2.45 million yen.

The monthly rent?

Around 45,000 yen.

That's really cheap.

You'd be getting about 13 percent
of your investment back in one year.

That's pretty good these days.

So even with a low rent, you can recoup
your investment at a good pace.

Yes. There will always be
demand for houses like this.

Why is there so much interest these
days in investing in vacant houses?

I think the biggest factor
is anxiety about the future.

Young people are worried about
how much they will be able to earn.

Older people are worried about whether
their pension will be enough to live on.

Those are typical worries.

People go looking for additional income,

and it doesn't take much money

to get started as an investor
in vacant properties.

So there's a lot of interest.

And there are literally millions of these
vacant houses around the country,

and they are attractive investment
opportunities I suppose.

On the other hand,

when you're buying an old house
that's been empty for,

in some cases, quite a long time,

you have to be pretty
careful as well, I'm sure.

You do.

People live in these places, after all.

You can't afford to cut corners.

You can't endanger anyone's life.

Properties should be surveyed
by professionals

and renovated by professionals.

Before renting out a house,

you have to make sure
that it is sufficiently safe.

Some regional governments
are using vacant homes

to breathe new life
into a local community.

Ozu, with a famous castle,
is a well-established tourist destination.

But there were more and more vacant homes,

and visitor numbers were declining.

So a decision was made
to use the vacant homes.

And now attractive new spaces
are emerging along the main street.

This century-old home
is now a souvenir shop.

Here's a stylish café.

This spacious lawn now serves
as an al fresco dining area.

We passed through here last year.

Although it's supposed to be a tourist
spot, it was looking a bit desolate.

Today it's much more lively,
which is wonderful.

Inoue Yosuke runs a company

that works with the local government
to renovate vacant homes.

We were once getting
40,000 visitors every year,

but the empty houses became an eyesore.

It was disappointing for tourists,
and frustrating for me.

Now, based on a city plan,

he is turning those vacant homes
into shops and places to stay.

Whatever doesn't need to
be renovated is left as it is.

This approach preserves the history
and charm of the old buildings.

Here's a carved-out gourd.

We always keep details like this.

Also these sliding panels.

We'll make good use of these.

So far, Inoue has turned 22 vacant
properties into shops and places to stay,

and there are plans for
him to work on more.

This type of collaboration between
private and public entities is

generating nationwide interest
as a new approach to tourism.

Next, we visit the Fuse covered
shopping street in Higashiosaka.

What do you think this is?

“Ladies Shop.”

Some kind of boutique?

Let's go in and see.

Hello.

Hello and welcome. Thank you for coming.

This is the front desk for a hotel.

We see this whole shopping
street as one big hotel.

OK.

I've never come across
anything like this before.

How does it work?

We renovated vacant
properties around here.

And turned them into guest rooms.

So where are the rooms?

Dotted along the street.

We head out to take a look at one.

On most days, more shops are open.

Then it's a bit more lively.

We're visiting on a Thursday,

which is when many shops
are closed for the day.

OK, here we are!

These are three of our properties.

They were vacant,
and so we turned them into guest rooms.

This room is suitable for six people.

There are three beds in each section.

OK.

Guest rooms have been installed
in seven renovated properties.

There are 19 rooms,
which can accommodate 76 people.

It still feels like an old house.

Oh OK, this is kind of nice.

Towels and wash...
these typically you use in a public bath.

So am I guessing that's where people go?

The rooms do have bathrooms.

But in a Japanese-style hotel,

a lot of guests look forward
to using a large, communal bath.

So you were right,
our guests also use a public bath.

Is it nearby?

Yes, it's a three-minute walk.

Guests can take their washtubs
and drop in like a local would.

And there's something else.

One of our highlights...it's the view.

Oh, there's something beyond the...

Yes.

...the cloth here. What is it?

Regular hotels have an ocean view,
or you can see the mountains.

But our view is different:
the shopping street.

Hi there!

Shopping street panorama!

The public bath is only one highlight.

At this café, guests can enjoy
a Japanese-style breakfast.

A hearty meal to start the day.

Later, how about takoyaki: octopus balls?

Or kamaboko: steamed fish cake,
a local specialty.

Let's speak with someone.

The food looks tasty!

Did the hotel bring new life
to the shopping street?

Absolutely.

Thanks to the guests staying at the hotel,

Fridays and Saturdays
in particular are busy.

Those days are quite a bit livelier
than they used to be.

It seems they enjoy these
snacks in their room.

Perhaps with a few drinks?

Oh, yes, they do.

Right? It's perfect for that.

Others buy food to eat
as they're walking around the area.

Oh really?

I'd like edamame tempura.

OK.

Sounds good.

Same for me.

OK.

780 yen change.

Thank you.

It's delicious!

Thanks very much.

Here's another popular food shop.

It's rare for a hotel to be integrated
into an entire shopping district.

That novelty appeals to young people,

and these days I do see some
young visitors here and there.

The current owner's mother actually
closed this shop 36 years earlier.

He reopened it six years ago.

Every year, more shops
were forced to close down.

It was sad.

I'm from around here.

I saw what was happening
to the shopping street.

And I was not happy about it at all.

I wanted a shop to open for once,
so I decided to reopen this one.

That was my motivation.

Initiatives in communities all over Japan

are making use of vacant
homes in various ways.

A number of decentralized hotels
like this have been opened.

The conventional approach was
for everything to be in one building.

Japanese people really liked that.

A big hotel would have a bath,
a party room, and karaoke.

You can eat there.

You drink, sing, and bathe.

But this new approach lets
the whole community benefit.

Here, guests spend money at the public
bath, the food shops, and the greengrocer.

The hotel boosts business
for the entire shopping street.

Small circular economies will have
an important role to play from now on,

and decentralized hotels
can contribute to that.

That's why so many have been opened.

They don't just make money for themselves.

They benefit the entire community.

Interesting, yes, yes.

Next, we visit a residential area
in the neighboring city of Yao.

As society changes,
how people use real estate changes,

and how people use vacant
homes changes as well.

This house embodies another new approach.

This was an empty house?

Doesn't look...it looks brand new!

Yes, but it was a vacant home.

And it was renovated by Hosokawa-san.

Nice to meet you.

Hello there. Nice to meet you, too.

It's hard to believe that this
is a remodeled empty home.

It's about 50 years old.

Really?

Yes.

Until a few years ago,
a mother and son lived here.

This is what it looked like
after it became vacant.

OK.

My company made a successful
bid for it at auction.

We renovated it, and now
we're putting it on the market.

This is a detached house and yet now
it's intended for a single occupant.

Just for one person?

Yes, detached houses are often
sold with families in mind.

But today,

many people in Japan are living alone
for years, or for their whole lives.

So there's actually a demand
for something like this.

Some major housing companies are now
designing properties for solo residents.

Social change is affecting real estate.

That's what's happening.

Right.

The kitchen and dining room
are in the same space.

I designed this for a single occupant.

Someone living alone.

I thought they probably
wouldn't cook that often.

That's what I imagined.

So it's a pretty minimal kitchen.

And I went for open storage.

You can see everything.

Actually, none of the storage
in here has a door.

As the occupant will live alone,
they'll probably want a little luxury.

So…

Check this out.

Oh wow!

In the best room in the house
we put this—a bath!

You've got a bath here,
and a shower room here as well.

And...what's this out...
this little deck here?

Well, let's say you're in the bath,
and you get a little hot.

You can cool off here,
in this space outside in the sun.

And it's just about
visible from that side.

Oh, the awning comes out!

Ooh, OK.

So just to make sure
that nobody sees you. OK.

I thought that having the bath
at the center of the home

might enrich everyday life.

That was the idea.

In Japan, houses are often designed
to appeal to a broad range of buyers.

The aim is to ensure that
at least one of them will buy it.

This is the opposite.

We just want to find one person
in hundreds or thousands

who would really love it.

This house has a focused appeal.

Interesting.
Completely different way of...

...designing a house.

There are two rooms upstairs.

One of them has exposed pillars
that used to frame a closet.

These two pillars are structurally
important and couldn't be removed.

So I had to decide what to do with them.

I chose to add more.

These two pillars and the beams are new.

It feels like a space for something,
but for what?

What are you going to do here?

This space poses a question.

By the way, how much are you
asking for this house?

For the building and land,
41.8 million yen.

In Japan, construction costs
are going up every year.

More and more expensive.

Also this building is 50 years old.

In places you can't see,
we had to strengthen it in various ways.

In the walls, out of sight,
there is X-shaped metal bracing.

And where the pillars and beams meet,

T-shaped metal fittings

ensure that the pillars and
beams are securely connected.

We used metal fittings
in all kinds of places.

OK.

What did you think of everything
we've seen today?

Private companies coming up with
different ideas to use vacant homes.

Obviously there are things
that the government

is doing to encourage people
to come up with more ideas as well.

Japan's got a shrinking population.

There's going to be more and more
of these empty houses.

And obviously there's
a lot of work to be done.

I don't think it will be easy,

but it is encouraging to see that

people are coming up with interesting
ideas to make use of these places.

It is.

The government has been
considering various options

to make vacant homes easier to use.

Relaxing laws and regulations,
for example.

At first, each vacant home
was seen in isolation.

It was something to be dealt with
on an individual basis, one by one.

But nowadays,
people have started to consider

how these buildings relate to
the community around them.

That's a significant change.

Earlier, I mentioned natural disasters,

and I think that in a crisis,

vacant homes could be put
to use as emergency housing.

That's an option we have to consider.

And I believe it should be
part of a nationwide effort

to come to grips with this challenge.

OK. It's been a very interesting day.
Thank you very much.

Yes, thank you.