Posts Tagged ‘rentals’

Does ownership = entitlement?

October 22, 2011

Damages: Worse for some

There was a very interesting letter in today’s Tokyo Shimbun. A 51-year-old company executive from Kodaira, Tokyo, wrote that he recently visited his sales department in Sendai, and one of the employees told him that the residents of the condominium where he lived until the earthquake of Mar. 11 all received “charity donations,” presumably from the Red Cross, totaling ¥450 million, or ¥3 million for each of 150 households. Since the building was declared “zenkai,” or uninhabitable due to the extent of the damage, all the condo owners have had to move. Obviously, thought the executive, ¥3 million is not enough money to replace their apartments.

But what really bothered the letter writer was that he soon learned that other, presumably less deserving victims of the disaster also received donated funds. Another “acquaintance” was given ¥2.5 million. His apartment was also condemned, but it was a rental. The executive said that the person hardly needed that much money, because all he required was “maybe ¥200-300,000 to move to a new rental apartment.” Even more outrageous was the intelligence that someone who lived in a public apartment (koei, meaning that the amount of rent is pegged to the tenant’s income) also received “a lot of money” from the fund. The executive couldn’t understand why, since all that person had to do was “move to another public apartment.” In the end, the letter writer said, “I have doubts that this donated money was spent meaningfully on victims who really needed it, and a lot of people I know in Sendai feel the same way.”

Most of those people are probably home owners themselves, and the letter brings up a matter that has simmered under the surface of disaster coverage for months now: Do home owners deserve more help than other people? Obviously, they think so, but one of the basic tenets of “ownership” is that the thing owned is the owner’s responsibility. He has dominion over that thing and no one can take that away from him. This belief forms the sacred core of capitalism and free enterprise: You can do anything you want with your property, and the unavoidable corollary is that you and only you are responsible for what happens to it.

But ever since the disaster home owners in the affected areas have demanded that the authorities (including TEPCO) help them rebuild, and not just with loans, but with direct payments. In response to the Great Hanshin Earthquake, the government passed the Disaster Relief Act, which provided funds for people affected by natural disasters. Owners of homes assessed to be zenkai can receive up to ¥3 million toward rebuilding. Many homeowners say this is not enough, and there is even a plan for the government to buy up private land along the coast that has become uninhabitable due to changes in the shoreline.

The magnitude of the disaster has, however, obscured an important point. Japan is a capitalist democracy, so why should the government give any free money to home owners? By using tax money to help them, even people who don’t own homes pay to help replace lost private property. This concept violates the spirit of “ownership” and certainly constitutes what libertarians would call a moral hazard.

We don’t necessarily support this view. The lives of people in the stricken areas have been destroyed, and we believe it is a social obligation for all of us to help them get back on their feet, whether through the agency of the government or through charitable concerns like the Red Cross. However, the man who wrote the letter to the Tokyo Shimbun has his priorities twisted. Why is a home owner–who tacitly accepts the risk attendant to ownership–eligible for greater charitable assistance (on top of the money he/she will receive from the government) than is someone who rents? Because he has “lost more”? Perhaps, but loss is an unavoidable component of ownership, so why should a renter be penalized for risking less? It’s a class distinction; no more, no less.

Shift that burden

October 16, 2011

Professor Yosuke Hirayama of Kobe University, probably Japan’s foremost scholar on the subject of housing and social policy, was the subject of a fairly long interview in the Asahi Shimbun recently, and though everything he said has been discussed at length in this blog, his explanation of what’s wrong with Japan’s official housing policy deserves to be summarized, especially in light of the current worldwide movement to close the income gap. For sure, Hirayama’s belief that government must shift its policy away from home ownership may raise the hackles of free market advocates and libertarians since it basically takes for granted the idea that housing is such a basic need for all members of society that the authorities need to be involved. What’s notable is that his ideas are based on classic, some might say prosaic economic principles; but in any case it was government that created the problem in the first place.

In a nutshell, Hirayama says that Japan’s long-time housing policy, which is based on promoting home ownership, has hit a wall, and that the government should shift this policy to promoting rentals. He begins by citing the disaster in the Tohoku region, where home ownership is even higher than the national average and where a good portion of these homeowners are elderly people who live alone. They are already in debt, and to encourage them to build new houses is simply to push them further into debt. Instead, the government should promote the construction of more rental housing and offer subsidies to renters. He mentions that he himself lived through the Great Hanshin Earthquake of 1995, and at the time was renting. Compared to homeowners, he survived the situation without as much emotional or financial trouble, because all he had to do was move. Of course, earthquakes are unpredictable, and by themselves can not be used to argue against home ownership (though he also points out that seismologists predict a better than even chance of a major earthquake hitting a large populated area in Kanto or Tokai in the next 30 years). The point is that renting has its advantages, a notion that has no traction in Japan. (more…)

Blacklist blues: update

August 20, 2009

The blacklist for rental scofflaws that was planned by a number of rental guarantee companies and reported below has apparently been scrapped–for the time being. According to a front page article in today’s Asahi Shimbun, the group of 15 that came up with the blacklist have decided not to go through with it after “thinking more seriously about it.” Also, other guarantee companies who aren’t in the group apparently complained and the land ministry expressed its “concern.” But the main problem seems internal–some of the companies actually want the blacklist to be more draconian while others are caving to outside pressure to just chuck the whole thing. Anyway, the group will continue its discussion of the matter in the fall. In a way, that makes sense. The rental market isn’t very good right now, and such tactics, which are meant to appeal to landlords, seem self-defeating in what is essentially a buyers market.

Blacklist blues

August 15, 2009

According to a front page story in today’s Asahi Shimbun, a group of 15 nationwide “yachin hosho kaisha” (rental guarantee companies) have gotten together and at the end of the month will start compiling a blacklist of rent scofflaws. (more…)

The First Straw

July 30, 2009

The Kyoto District Court ruling on July 23 was a bombshell, and if it sets some sort of precedent could change the situation for Japanese renters forever. After the jump, the Kyodo report from Japan Times (more…)

New leases on life

July 16, 2009

According to the website of the housing newsletter Jutaku Shinpo, during FY 2008 88.5 percent of the rental properties in Japan were occupied. Moreover, during that time 91.6 percent of these properties decreased their rents. Perhaps this astonishing statistic should be taken with a grain of salt since the newsletter’s survey, which was conducted among rental property management companies, only had a 26 percent response rate. Nevertheless, it’s startling. (more…)

Rent me

June 21, 2009

The Asahi Shimbun ran an article about a 62-year-old widow who abandoned her house in Saitama prefecture, where she and her late husband raised two children, and moved to a smaller house in Fukushima prefecture that her husband bought just before he died. The house has a garden and the woman says she is quite comfortable. The thing is, she did not sell her Saitama house. This unusual arrangement is made possible for a new sort of organization that helps older people “change homes.” (more…)


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