Affordable Housing Has Become Unaffordable to Build | The Tyee
Affordable Housing Has Become Unaffordable to Build | The Tyee
A ‘perfect storm’ of rising costs makes it hard to keep rents low, say non-profits.
Japan has faced a housing crisis in the past, but it has implemented several policies to address the issue. Here are some ways the Japanese government has tackled the housing crisis:
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Establishment of the Government Housing Loan Corporation (GHLC): The government established the GHLC to encourage housing construction and homeownership through loans[2].
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National zoning reforms: In 1968, a new city planning law was passed on a national level with the goal of reforming the city planning process, curbing issues with housing shortages, and promoting urban development[3].
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Relaxation of regulations: The Japanese government began relaxing regulations that had restricted supply, allowing taller and denser buildings in Japan's capital[5].
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Surplus of housing: Tokyo has had more housing than households every year since 1968, and they continue to build on that surplus. The resulting excess of housing over households creates a buyer’s market, vacancy rates stay high, and all the benefits of abundant housing accrue. The resulting slack in the system has kept rents and prices low and stable[1].
Because of these policies, Japan is facing a housing glut due to falling demand caused by a shrinking population[4]. The government has also implemented a subsidized housing initiative to reduce the number of empty homes, but it has fallen below the national target[6].
Citations: [1] Yes, Other Countries Do Housing Better, Case 1: Japan - Sightline Institute https://www.sightline.org/2021/03/25/yes-other-countries-do-housing-better-case-1-japan/
[2] Land scarcity, high construction volume, and distinctive leases characterize Japan's rental housing markets | Brookings https://www.brookings.edu/articles/japan-rental-housing-markets/
[3] How Tokyo Avoided the Affordable Housing Crisis - KonichiValue https://www.konichivalue.com/p/contrarian-investing-how-tokyo-avoided
[4] More empty homes: Japan's housing glut to hit 10m in 2023 - Nikkei Asia https://asia.nikkei.com/Spotlight/Datawatch/More-empty-homes-Japan-s-housing-glut-to-hit-10m-in-2023
[5] What Housing Crisis? In Japan, Home Prices Stay Flat - WSJ https://www.wsj.com/articles/what-housing-crisis-in-japan-home-prices-stay-flat-11554210002
[6] Japan's New Housing Policy to Reduce Abandoned Homes Falls Below National Target https://thediplomat.com/2019/09/japans-new-housing-policy-to-reduce-abandoned-homes-falls-below-national-target/
House prices in downtown Tokyo is often as low as $300k, and I'm not talking about living in a shoebox, but something actually kinda decent: https://www.youtube.com/watch?v=iGbC5j4pG9w
The fact that a city like that can achieve something so incredible means that we're doing it all wrong. And that is, we let communities reject bully others because they don't like change, despite change happening in their neighbourhoods constantly. They say it's to preserve the "character" of their neighbourhood, but the neighbourhood I grew up in was all small detached homes, often nothing more than bungalows. Every single house in the area now is at least 4 times bigger, and completely unrecognizable.
How is that fine, but we can't have townhouses and apartments? A properly designed townhouse can house six families in the same plot of land as a single detached home if the laws allow for multiple addresses to exist on one plot. Hell, I know plenty of houses that rent out to multiple families already and only appear to be a single house from the outside, yet proper apartments aren't allowed?
It's just hypocrisy. People want to get rich by sitting on their plot of land until they decide they're ready to retire so constantly lobby to stop the development of high density housing, despite the fact that their taxes go to pay for building houses a hundred kilometers away.
They don't care that as long as homes are unaffordable to the young, it's going to push back marriage and decrease as the number of children they have. When this happens, there'll be a glut in housing demand a few decades down the line as the population stops increasing and instead decreases, causing the housing bubble to violently burst.
Japan learned that lesson the hard way and fixed their laws so it won't happen again. It took 30 years since the housing bubble burst, but there's finally signs of a recovery. We don't want that here, and the only way to prevent it is to make it easy to build high density housing. The price isn't the issue, the problem is that only a handful of development are allowed every year, and it takes something like 5 years from application to approval to develop a site.
We don't need houses in the middle of nowhere that'll have a commute time of 4 hours each way. We need to rebuild the inner city for low and mid-rise apartments and condos, single detached turned into townhouses. And if I can be a bit greedy, allow for mixed used development almost everywhere. I don't mind dealing with some neon lights if it means there's a convenience store every two blocks, a grocery store every six, and dozens of small shops in between generating the governments billions in tax revenue. Because nothing makes everybody rich like downtowns: https://www.youtube.com/watch?v=7Nw6qyyrTeI
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Then let the government build it, profit isn’t the point
Building all affordable housing with tax dollars is a noble goal, but that’s not happening anytime soon and our housing crisis demands action now. Our current regime has nowhere near the money and administrative power to facilitate this alone.
Why not just make it easier for for-profit AND non-profit developers to build housing in the meantime? Fixing the broken process is free and we can start today.
The government needs to fill in the underconstruction of housing since 2009. All of the "market based solutions" have been attempted and failed.
The ONLY remaining solutions are government produced housing targeted at first time home buyers and pre-empting zoning, parking and density requirements such that new housing can be built with less materials and space. Those are it. Anything else is just nonsense political masturbation about bipartisanship and unicorns.
Since 2009 private investment in housing has been too low and it will continue to be too low.
our housing crisis demands action
I love the 'act now think later' banners.
Building all housing with tax dollars alone is a noble goal, and one we should strive towards, but realistically that isn’t happening anytime soon and our housing crisis is a raging fire that demands solutions now.
It would be exorbitantly expensive, like hundreds of billions if not trillions to catch up on our deficit. It’d also require a complete overhaul of our current market-based regime and a herculean administrative arm that our government isn’t anywhere near ready to facilitate.
In the meantime, we can just make it easier for for-profit AND non-profit developers to build housing. We can undo the last century of nimby-centric zoning that restricted housing starts in our major cities to build housing. That’s free, and we can start today.
If we can subsidize billionaires we can subsidize housing.