Archive for February, 2012

That sinking feeling

February 23, 2012

Tilt: Park City Townhouses in May

It was recently reported that 32 households in the city of Urayasu, Chiba Prefecture, plan to sue Mitsui Fudosan, the company that developed their neighborhood. Urayasu, of course, suffered particularly bad liquefaction during last March’s big earthquake, since most of it is built on landfill. Some of the residents of Park City Townhouse, where homes originally went on sale in 1981, have accused Mitsui of neglect, since their homes were extensively damaged while surrounding neighborhoods, which were built by other developers, experienced much less damage. The plaintiffs are asking for ¥700 million.

Many people in Urayasu have already carried out repairs on their homes, including jacking up building that sunk during the quake. The local government gave up to ¥2 million to each household that suffered damage, but for some homes that isn’t nearly enough. Jacking up a house costs at least ¥10 million. The problem with a place like Park City Townhouse is that all 70 households are supposed to act as one when making a decision, and for months the community was split between repairing and rebuilding. In order to use the large-scale repair fund (shuzenhi), which all the homeowners contribute to on a monthly basis, three-fourths of the residents have to approve. And in order to rebuild the whole neighborhood–which would require a considerable investment from everyone–four-fifths of the residents have to say yes. So far, neither of those proposals have been addressed, but almost half have decided they will file a suit “in solidarity” against Mitsui. Those residents who are not taking part in the suit, according to the weekly magazine Aera, seem to doubt that they could possibly win against such a big company. In addition, some are averse to the publicity, which will do even greater damage to their property values than the quake itself has already done.

Park City Townhouse has always been something a model community. The homes, which originally cost about ¥30 million, retained their value better than most Japanese homes do, up until the quake, that is. Made up completely of two-story townhouses–a style that was popular until land values skyrocketed, thus making multi-story condos more feasible from a financial standpoint–Park City has been used as a backdrop for many movies and TV dramas when producers want to show modern lifestyles. However, the quake revealed what a shoddy job the developer did in preparing the land. Across the street, the predecessor of the semi-public housing corporation UR developed a three-story apartment complex on land that was prepared with a process called sand compaction. (Tokyo Disneyland, which isn’t far away, used the same process, which is why only the parking lot, which didn’t use it, was damaged in the quake) It suffered very little damage in the quake. In Park City, all 70 units were designated hankai (destroyed) to some extent by housing authorities. In addition, large cracks appeared in the ground from which deposits of old garbage such as discarded carpeting–i.e., landfill–come up to the surface. Geologists say that there is no real difference between Park City and the UR complex in terms of potential for ground liquefaction, so the plaintiffs are charging Mitsui with neglect when they prepared the land, and according to Aera’s research other Mitsui developments in other cities suffered liquefaction as well.

Mitsui has said it feels no obligation to pay for repairs or reconstruction, citing the now familiar reason that the earthquake was “beyond what anyone could have expected” (soteigai). Aera points out that the company is very powerful in Urayasu, having helped turn it into one of Tokyo’s most thriving suburbs, and therefore the local government is anxious about taking sides. There are similar suits pending in other neighborhoods throughout the affected areas targeting different developers, but Park City seems to be the one capturing the most attention.

Field diary: Matsudo-Mabashi

February 14, 2012

The house we inspected was in Matsudo, the nearest station Mabashi on the Joban Line, but the Joban line that connects with the Chiyoda subway line, not the one with the express stops that goes all the way to Tohoku. It was an eleven-minute walk from the station, and since Mabashi is 22 minutes from Nishi Nippori on the Yamanote Line, it makes it quite a convenient location with regards to Tokyo. This is significant since the house price is ¥12.8 million. That could be considered quite cheap; or expensive since it was built in 1975: 65 square meters of floor space comprising two floors on 75 square meters of land. There was another house on sale 15 minutes from the station, of approximately the same age, slightly smaller, but that one cost only ¥6.2 million. (more…)

The influence of proximity

February 6, 2012

Yesterday we inspected a house built by A-1 near Monoi Station on the Sobu line in Chiba Prefecture. A-1 was the subject of one of the Japan Times’ entrepreneur columns a few weeks ago and the writeup was very intriguing in that here was basically a housing design company that tried to keep costs down by overseeing construction. Their home page proved to be even more intriguing in that the designs were simple and practical, the materials attractive (wood interiors, in particular), and the prices well within almost anyone’s budget. One of the ways they keep their prices down is eschewing expensive promotion. For instance, they don’t build model homes but rather pay people who are now living in A-1 homes a small fee to show prospective buyers around their dwellings. That’s what we did, in the company of an A-1 salesman. (more…)

The landlord’s an idol

February 2, 2012

This week the tabloid press is obsessed with Tomoko Nakajima, half of the comedy duo Othello. According to the scandal weekly Flash, Nakajima hasn’t paid rent on two apartments in Shibuya–one her residence, the other an office–since last August and is now being sued by the owners of the two properties, which together cost ¥1.1 million a month to rent. Nakajima hasn’t worked since April when she took sick leave, but show biz reporters are saying that she came under the spell of a “fortune teller.” Nakajima allowed the woman to move in with her and she has been directing Nakajima’s life ever since, presumably squeezing her for cash. The comedian’s parents and management company say they have not been able to contact her for months, but also assume that once Nakajima runs out of money the woman will lose interest and move out.

The story wouldn’t have normally interested us until we heard that the apartment Nakajima rents as a residence at ¥650,000 a month is owned by Masahiro Motoki, who starred in the Oscar-winning film “Departures” (“Okuribito”). We dug a little deeper and learned that Motoki is not the person who is suing Nakajima for back rent. The suit is being carried out by the guarantee company that manages the apartment. This is a common investment scheme. Guarantee companies broker deals between apartment sellers and buyers, convincing the potential landlords to purchase the property and leave all management to the guarantee company, which looks for tenants, sets rent rates, and acts as guarantor in exchange for a sizable fee that is paid by the tenant. Nakajima’s unit is 122 square meters, which partially explains why her rent is so high. Other factors include the location, Shibuya, and the fact that the building houses a number of other celebrity-owned units that we presume are also managed by guarantee companies, thus setting up an interesting show biz pecking order. Motoki, a former Johnny’s idol who made a successful transition to legitimate acting, can invest in properties that are then rented out to other show biz people who are successful but not successful enough to buy their own luxury condos. (We’re not entirely sure if Motoki didn’t live in the apartment at some time in the past, but at any rate he did hire the guarantee company) In fact, we would think that one of the advantages a star like Motoki would derive from such a business arrangement would be keeping his name out of the press if a lawsuit erupted with a tenant. How does it look for a former idol to be suing a civilian, or even a current comedian for that matter? Maybe it means nothing. In our research we found a number of celebrities who have made similar investments, including another comedy duo, Kyain. Othello is popular, but not as popular as Kyain. Are they popular enough to afford ¥1.1 million a month in rent? At the moment, apparently not.


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