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Tokyo proves that housing shortages are a political choice

363 points by sampo 7y ago

njepa 7y ago
I never understood this argument. Japan is one of the most different places relative to everywhere else. That you can't find a more familiar example almost becomes a counter argument. There is something about housing markets that makes people feel like their city is somehow unique and if they could just fix their local problem everything would be great. While pretty much every in demand major city in the world is having the same problems.
thefounder 7y ago
The difference here is that London has a lot of foreign and domestic real estate "investors" that I'm pretty sure won't be happy with affordable housing for everyone. Who wants London's property market to crash?
- TaylorAlexander 7y ago
  “Who wants London's property market to crash?” People who value housing as a place to sleep rather than a financial investment.
  - Aeolun 7y ago
    This should be about 100% of the voters right?
    - mjevans 7y ago
      Of those that can AFFORD to live in London? Seems unlikely.
    - dodobirdlord 7y ago
      No, not really. People who own their homes have a vested interest in prices rising, people who live in government-mandated affordable housing have no particular stake one way or the other, and people who rent at market rates often have low visibility into the fact that their rates are the result of a housing shortage and prefer to blame landlords for renting at prices the market will bear.
    - hopscotch 7y ago
      Most of the middle class and up in the UK have a significant chunk of their wealth tied up in property (their own homes, then investment property), so not really.
    - inflatableDodo 7y ago
      In the UK, since the early 1980's, it has been considered political suicide by a succession of both conservative and labour governments to not give money to the middle classes in the form of large increases in the value of their homes. This is one of the main reasons we have built about half as many houses as Canada since 1980, while having around twice the population.
      - ZeroFries 7y ago
        Wouldn't this only work as a method of increasing middle class wealth if you owned 2+ properties? Otherwise, you have to live somewhere. You can't sell your house and unlock that wealth increase without spending it all on the next place to live.
        inflatableDodo 7y ago
        People became obsessed with their home valuation. How much more money your house was worth since you bought it became one of the main methods of social boasting for decades, regardless of whether you were actually able to really profit from any of it.
- dublinben 7y ago
  Current owners of scarce real estate wouldn't lose money if zoning laws were changed to allow more density. The land they own would actually become more valuable, as it could now have more units than before. Allowing more productive use of the underlying land is actually good for both the sellers and buyers of housing.
- CydeWeys 7y ago
  London now has more renters than owner-occupiers, so the answer is, most of London's inhabitants want property prices to decrease. This would make their rent more affordable and give them a better shot at transitioning from renter to owner (which is a goal of many).
tehjoker 7y ago
Just a reminder that land is a limited natural resource that does not have a monetary value assigned to it except by political choice. We could assign zero dollar value to land and allocate it democratically based on utility to the public and with an eye to preserving the environment. Allowing a market in land doesn't allocate it to the best uses (why do we have fancy hotels on the best real estate when there are homeless people?), just to the purposes of the people with the most money. If the people that own the construction equipment refuse to build when land is worth less, the public should step in and do it. For the liberals out there, if we did this a certain person would not be president and the country would be a better, more egalitarian place. Imagine having nearly everything you pay in rent back in your pocket instead of being progressively squeezed more and more each year and spied on (given the increasing installation of monitoring equipment that you do not control). If we could ban owning properties that you do not personally use, imagine how that would change the composition of cities. Gentrification would be vastly reduced. Shops, community centers, and other things that people love wouldn't get kicked out of town because the rent always increases. That would be revolutionary.
- Aeolun 7y ago
  > democratically based on utility to the public Ok, so I want to live in the center of the city, because there the walking distance is shorter. John wants to do the same thing, but he gets assigned a tiny plot somewhere miles outside the center. How will you make value judgements about people in this manner? You cannot assign randomly either, as everyone will hate the place they live.
  - geofft 7y ago
    There are lots of ways to do it, but yes, whatever you do, you have to make that value judgment. I have trouble believing that the value judgment "Your parents were richer than John's parents" is anywhere near the top of the list of reasonable approaches. (I have real trouble believing that the value judgment "Your grandparents shared a race with the politically powerful, who refused to sell to John's grandparents" or "Your great-grandparents shot John's great-grandparents in the face" are anywhere except right at the bottom.)
hackermailman 7y ago
Japanese also don't consider housing to be equity or investment, it depreciates in value every year. A house is just a house not something to speculate on or store money in. https://www.reuters.com/article/us-japan-economy-land/japan-average-land-prices-rise-for-1st-time-in-27-years-government-survey-idUSKCN1LY10J https://www.reuters.com/article/us-japan-economy-land/japan-...
- itsaidpens 7y ago
  This very nearly almost made me aroused. What a wonderful idea.
  - Waterluvian 7y ago
    I ranted about this concept recently when I went to buy my family a house. I can't believe it exists somewhere.
- dev_dull 7y ago
  Even before you mix in build-friendly government policies, Japan has had decades long population decline and extremely difficult immigration process. This is literally the opposite of the major US cities which have seen the most housing inflation. Nothing is built and everybody is moving in.
  - Barrin92 7y ago
    as the article points out, there is significant net migration to Tokyo both from the country itself and from abroad, which makes the situation indeed comparable. I seriously wonder if people here even bother to at least skim the article. In fact Tokyo has grown significantly faster than New York or Los Angeles over the last fifteen years. (population up by about 1.2 million compared to 500k respectively).
- zizee 7y ago
  I believe this is partly a cultural artifact of Japan being earthquake prone. The severity and frequency of earthquakes used to make it difficult to build housing that would last.
sbenitoj 7y ago
It’s amazing that this even needs to be published — no study is needed to prove the laws of supply and demand that have been known and obvious for centuries.
- klyrs 7y ago
  In the neighboring cities of Vancouver, the "known and obvious" laws are false. We have developers building skyscrapers full of condos which are selling for 500k-2M for a 1 bedroom. They're largely vacant because they're bought as investment properties. The ultra-rich can afford these places, but don't need to sleep in them. The demand isn't just people who need a place to stay, and rental prices are absurdly high. We've got a new tax in Vancouver that's helping: the empty homes tax. But that's only Vancouver and not the outlying area.
  - asdfasgasdgasdg 7y ago
    They aren't false. There just hasn't been sufficient building allowed to take up the slack. If Vancouver took a page from Wizards of the Coast's tactics, prices would eventually go down. Namely: you have to convince speculators that you are willing to build (issue cards) until the value of speculative assets falls to the livable price for everyone else. If they were willing to allow unlimited building until the prices fell to the desired level, eventually speculators would realize that Vancouver property is a terrible bet. Actually the presence of these investors is just a reflection of Vancouver's own unwillingness to allow said amount of building. If the speculators thought there was any chance of them building enough to meet demand, they would no longer view housing in Vancouver as a safe investment. So it's really a self-inflicted wound, not a violation of the laws of supply and demand. That being said, an empty home tax does not seem like a bad supplemental approach. However, even assuming the tax is perfectly effective, if the population inflows outpace building, prices will continue to rise. And I would guess that is likely to be the case. The tax is a band-aid, but the problem needs stitches and cyanoacrylate.
    - klyrs 7y ago
      The cities are all extremely friendly to developers (our "affordable housing" is $1700/mo for a 1-bdrm and developers are only required to build a small fraction of "affordable" units). I'm not sure how familiar you are with the area, but it doesn't seem like anybody is holding back on new development except for some weak and failing anti-gentrification efforts. Another significant factor in our local economy is a massive amount of money laundering, perhaps billions of dollars worth. It's been washed in real estate -- and laundry is one place where supply and demand break down: losses are acceptable. What we're seeing is a huge demand for apartments, at rates that property owners can't afford, given the massively inflated value (hence tax). And homeowners (the upper-middle class), sensibly, don't want to see the market crash. So they don't actually want the government to act: new homeowners fear losing half of their investment. It's a vexatious problem all around
WillPostForFood 7y ago
Tokyo proves you need tremendous investment in infrastructure, not just unleashing developers to build without restriction.
- CydeWeys 7y ago
  Most (if not all?) of the transit in Tokyo is private. When you build densely enough, transit becomes highly profitable on its own, and someone will do it.
  - njepa 7y ago
    They are private in ways specific to Japan that, what I know, you pretty much won't find anywhere else.
    - kaybe 7y ago
      Can you elaborate?
      - majormajor 7y ago
        Transit as retail and real-estate play: https://www.citylab.com/transportation/2012/05/secret-tokyos-rail-success/2044/ https://www.citylab.com/transportation/2012/05/secret-tokyos... The end to end control over development of these networks+districts was still more centralized, though not by a government, compared to the rather uncoordinated mess that has been US public transit development.
    - solidsnack9000 7y ago
      Public-private partnership is not so "specific to Japan". The transit/retail connection is definitely a uniquely bright idea but it's something that many other jurisdictions could emulate.
      - njepa 7y ago
        Having that work is specific to Japan. If there is a single example of someone managing to do that successfully, especially with multiple companies, I would like to hear about it. Transit/retail or rail plus property is used in other places, like Hong Kong, but with government owned operators. https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/the-rail-plus-property-model https://www.mckinsey.com/industries/capital-projects-and-inf...
lovemenot 7y ago
Not mentioned in the article, but also significant is that in the last decade or so, commercial property developers have been required to provide housing too. We can see many successful examples of mixed-use buildings in predominantly commercial districts such as Shinjuku and Roppongi.
- Danieru 7y ago
  That is not a requirement but rather an innovation first done by Mori Tower about thirty years ago. Most large sky scrappers are still pure office towers. The mixed use developments are rare and lifestyle branded.
burlesona 7y ago
> What Japan’s inexpensive homes and its alternative policy approach prove is that the housing shortage in British cities is not inevitable. Housing does not have to be expensive in prosperous cities. The housing shortage is something we have chosen to experience and can choose to change if we want to. Written for Britain, but this could be applied universally.
- njepa 7y ago
  It is also meaningless. Yes, if you get to choose what to do, you can do whatever you want. But you don't, so affordable housing remains an unsolved issue in most places. Things haven't changed and aren't changing just because people become convinced otherwise.
  - cheriot 7y ago
    There's a lot of people (in the US at least) that see appreciating property values as inevitable. Combined with views associating dense housing with urban ghettos from the 80s, it's one of the reasons people think building more houses won't make them more affordable.
    - ryl00 7y ago
      That's weird. Don't we get enough stories about Rust Belt economic hardship and Detroit real estate horror stories to know that property values don't always go up? Have we already forgotten 2008?
      - yxhuvud 7y ago
        But it don't have to take a depression to create sinking house prices. In Sweden we had shrinking house prices between 1931 to 1981, with only three years (right after the war) when prices increased. The same period is the most economically successful period we ever had. Why? Because politicians built a shitton of houses (and tore down a lot of crappy housing too). Nowadays people here too think prices always go up, not realizing it is a political choice. It may very well be the right choice, but so many doesn't even understand it is a choice in the first place.
andy_ppp 7y ago
I really hate this trope that is wheeled out about Japanese accomodation; the flats that people talk about would be considered too small to live in by western standards. Most of them seem to be made of horrendous cheap plastic prefab; you get a corridor with a kitchen in it, a mezzanine to sleep on above said corridor that is too small to sit upright, a 7'x'7 living area and a bathroom (including toilet) that is about 2ft x 2ft. For this delight there are people being charged $1000 per month or more in rent. Add in the fact that Japanese have an extremely different relationship to property culterally (and due to earth quake fears) means propeerties are often knocked down and rebuilt (the article notes this - 600000 new homes for an ageing population seems like most of those are going to immigrants). A lot of people in Europe prefer the shared living, and it is better use of resources - you only need one bathroom/one living room per 3 people and those can be MUCH nicer than these micro appartments. London and the west also have different cultural values about building high rise property and overlooking neighbours. It's fine that Japan doesn't mind a sky scraper being built overshadowing their homes but for Londoners or elsewhere this is simply unacceptable to suggest we can change our whole culture to Japanese values and magically solve housing problems.
- JumpCrisscross 7y ago
  > London and the west also have different cultural values That’s the article’s point. Housing shortages are a political choice.
  - deleted 7y ago
    [deleted]
- c0nfused 7y ago
  I think it's not quite as vigorous in opposition as that. The argument is more that housing shortages are a result of how we in the west regulate construction and housing leasing to under supply. I'm not a Londoner, but my american city of about 1 million people has more than 60 different residential zonings. My home can be a single family home, a day care, or a coffee shop with up to 2 employees who reside off the property itself. Additionally, the house is in a historic district and no changes to the exterior may be made that are visible from the alley or street can be made with out approval by the city via application and subsequent public forum. I can see how this would strangle growth of housing supply as the place grows.
BurningFrog 7y ago
In a less exotic location, Houston proves the same.
- pascalxus 7y ago
  Houston and Chicago put the bay area to shame with populations over 2 million, high growth and super cost effective housing. The secret is no zoning laws in Houston
  - seanmcdirmid 7y ago
    Topography also plays a role, Houston and Chicago can grow outward forever, something that pesky hills and water get in the way of in the Bay Area.
  - elgenie 7y ago
    Houston does, however, rely on the taxpayers in the rest of the country to underwrite their many many housing units built in a floodplain.
dhfromkorea 7y ago
I am not convinced. The attribution to the simple zoning system is surely not a complete proof, if any. Consider a counter-example: South Korea that has a very similar zoning system. Yet the housing price around Seoul soared roughly by 60% the past 3 years---so did rents (to a smaller but still significant rate). All the while the apartments supply has been at record high in 10 years. That zoning policy may be a factor but clearly not sufficient.
- cheriot 7y ago
  > All the while the apartments supply has been at record high in 10 years. Has the number of jobs increased? Housing needs to be built in proportion to office/factory/commercial space in order to balance supply and demand.
  - dhfromkorea 7y ago
    The employment rate has increased by somewhat unnoticeable amount over the past 10 years [1]. The increased housing supply is mostly due to cost factors (tax breaks from the previous administrations, low interest rate) and the demand due to decline of small cities (demand gets concentrated around Seoul, the capital city; people buy houses around Seoul while living far away in another place on rent). As for the office/factory/commercial space, there has been a sharp increase in supply, and the vacancy rate (spaces that cannot find tenants) is 10-20% in major cities. Folks still buy buildings with a yield of 2.5-4% because the interest rate is so low. I am currently based in Cambridge, Boston. There are empty stores that have been looking for tenants for more than a year. [1]: http://www.index.go.kr/unify/idx-info.do?idxCd=4013 http://www.index.go.kr/unify/idx-info.do?idxCd=4013
b212 7y ago
How the heck can they deliver so many flats? Poland with 30% of Japan’s population builds roughly 5 times less houses per year and trust me we’re building new blocks literally everywhere. Yet flats are getting much more expensive every year, it’s cheaper for Londoners to buy flats in London than for Poles to get something in Warsaw. I guess what works for Japan won’t work for European Union as folks from Germany, the UK or France can buy Greek, Bulgarian or Polish flats easily...
- jaredklewis 7y ago
  > How the heck can they deliver so many flats? > ... > I guess what works for Japan won’t work for European Union as folks from Germany, the UK or France can buy Greek, Bulgarian or Polish flats easily... This confuses me. Af first, you are impressed by the fast rate of construction in Japan and affordable prices in Tokyo. From there, it seems reasonable to speculate that if Poland increased residential construction to be more in line with that of Japan (proportional to population), Poland might also see a reduction in prices. But you instead immediately jump to the conclusion that it wouldn't work because Poland is in Europe. Japan's system works well enough with a population of 125 million. Any particular reason it couldn't scale to support the 500 million in Europe? If foreigners are eager to buy up Polish housing, this is only a problem if Polish housing is scarce. If instead, Poland increases construction until it has a surplus of housing, housing becomes just another export that can be sold at a profit, injecting money into the Polish economy. So why wouldn't it be in Poland's interest to follow the Japanese model?
- Tharkun 7y ago
  Japanese flats usually don't have central heating. They tend to have a/c in one room. The kitchen is usually tiny by western standards. Often there is no bedroom -- the living room is used for sleeping. In all, 20-30m² flats are pretty common. This is, of course, a lot cheaper to build than 100m² flats with two bedrooms, central heating and a kitchen bigger than most Japanese restaurants. You can't (or rather, propbably don't want) tiny flats unless you live in a city like Tokyo. Where you can find 24/7 convenience stores everywhere, where there's affordable and tasty food to be found everywhere and at almost any time, where public transport is amazing and affordable. Hell, you don't even need a bath in Japan, as there are public baths everywhere. TL;DR invest in your city and smaller, more affordable housing becomes possible and desirable. If you don't, it'll start to feel like USSR housing really quickly.
purplezooey 7y ago
Look at this. From the article it says Tokyo started 110,000 houses annually per year since 2003. Population of Tokyo: ~9M. Population of the Bay Area: ~7M. The BA starts around 11,500 houses per year. Roughly similar in population -- a tenth of the housing being built. Wtf.
- Shivetya 7y ago
  because it is wholly under the domain of politics in the Bay Area. Most if not all special interest groups are linked back to either those in office or their party. the usual method is to form groups where you friends and family get nice part time advisement jobs pulling down 100k or more; we recently had a candidate in my state who part timed a get out to vote PAC for even more. There have been many stories posted here and elsewhere how nearly every attempt to build housing is derailed, usually under the guise of setting aside for "affordable housing", followed by union workers only, followed by environmental concern; one was defeated for adding a few hours of shade to twenty percent of a play area/park of a school!; to finally architectural concerns because why would we want to impose on history of buildings barely a hundred years old. It comes down to money for politicians and those already there not wanting "those people" living among them. Heck in my local metro area they have squads to clear out the homeless and undesirables every time a convention or big game comes in; a town which has been blue for most all this century and most of the previous. One where you will hear the politicians stamp their feet about how unfair it is and if only they had more power and money they could fix it, yet they never have. Instead a new stadium displaced an older black church, go figure.
  - codedokode 7y ago
    > to finally architectural concerns because why would we want to impose on history of buildings barely a hundred years old. On the other hand, why do people need to build a new, ugly modern high-rise buildings in historical parts of the city? Is there not enough of other land? Historical parts better stay historical forever and there should be no new buildings, I think. Because no tourist will ever come to see modern, ugly concrete buildings.
ousta 7y ago
crime is very low in japan, food is often of quality, low immigration so less chance to end up in some places where you re the only person speaking english and women are not allowed into coffee shops. so yeah building more housing works. in western countries it is a bit more complicated. there are definitly a huge chunk of the real estate that is located in highly undesirable neighborhoods. i don't know many new york well-intended democrats that will trade a spot in chelsea for one in harlem.
codedokode 7y ago
I am surprised to read that houses in Japan are "inexpensive". They are very expensive, as is everything in Japan. Also I think there might be differences because the climate is relatively warm, the houses don't have central heating, which reduces the costs. The prices in London are high probably because there are lot of rich people, lot of immigrants and therefore high demand for housing.
- joshdance 7y ago
  and those who live in London doesn't allow enough houses to be build to lower the cost?
  - sgt101 7y ago
    The planning laws and social/physical infrastructure mitigate against initiatives and changes that would reduce the costs. One fundamental is that the rail gauge in the UK was the first one created, and this meant that tunnels and bridges were built unambitiously, consequentially there are no double decker trains in the UK. If there were double decker trains on the London commute lines London accommodation prices would be significantly reduced (I believe). That's just one small example of the complex confluence of issues that have driven the market in one direction though. Everyone should remember that 60 years ago London housing was very poor as well as relatively expensive (although far more attainable). That's important as it shows that things can and will change over time in the market. We need to think about this because some of the reforms suggested will fundamentally alter the physical geography of the city in ways that will have consequences 100's of years into the future. Architects and planners have a very bad track record with respect to these alterations, for example see Birmingham, Portsmouth, Ipswich, Reading in contrast to Manchester, Brighton and Bristol where history has run differently (Bath is a really good story - the 60's got stopped in its tracks there).
sgt101 7y ago
Think speak in the article :"Tokyo reformed its green belt twice" in fact Tokyo did not reform its green belt, it abandoned it. Also, yes, it is good if single people can make the choice to live independently, but a far larger problem in my mind is that families are driven either into poverty or out of London. The reform that I would seek is that apartments should have three bedrooms, this would create desirable family homes as well as flexible share candidates.
- lopmotr 7y ago
  What makes you think the market won't provide those 3 bedroom apartments? Why should those details be dictated? Isn't the the whole problem causing housing shortages in the first place - local government deciding how much luxury everybody must have, no matter how much they don't want it? Whenever there's a housing shortage, people start wanting to impose even more restrictions instead of allowing the people living there to drive the market with what they really want.
  - sgt101 7y ago
    The market is providing 2 beds (one big, one small) because these are acceptable to young professional couples. When babies come (which is often what happens) then the apartment works for a short time, but then confronts the couple with a challenge. The second bed is inadequate, and if the babies are of different sexes then the law dictates that they can't share the room past 9(?) years old. This causes the couple to seek a house (there are no 3 bed apartments) houses are very inefficient in terms of footprint, and affordability means that most young couples end up commuting. Government has a role because developers just building things mean that the costs of the development are unanticipated and then later socialised as collateral damage. On the other hand if government manages development then the appropriate stock with appropriate infrastructure (doctors, schools, shops, transport) can be provided at the time and the cost socialised in the transaction and managed. This is economically much more efficient.
sytelus 7y ago
This is bit overblown article. Certainly bad zoning laws can help inflate prices and there are several other factors like investors using real-estate for investment. However the major cause of real-estate price increase over long term is plain and simple: heavy urbanization of entire world. If you look at graph of population moving to urban centers over centuries it looks like literally almost vertical line in recent decades [1]. I'd heard that 90% of Earth's population is concentrated around just 40 urban centers! The real-estate in rural area has remained same or took nose dive while in urban areas it keeps going up. Interesting question is how fat this trend will keep going? My guess is that this is black-hole effect, a larger city attracts even larger population towards it. Japan has recently became outlier because of economic issue as well as population decline. [1] https://ourworldindata.org/urbanization https://ourworldindata.org/urbanization
Udik 7y ago
I loved the beginning of a recent article on Japan on the London Review of Books: "One can fly to Japan from anywhere, but from Japan one can only fly to the Third World, and it hardly matters whether one lands in Kinshasa, London, New York or Zurich: they are all places where one must be constantly watchful and distrustful, where one cannot leave a suitcase unattended even for ten minutes, where women strolling home through town at 3 a.m. are deemed imprudent, where the universal business model is not to underpromise and overdeliver but if anything the other way round, where city streets are clogged at rush hour because municipal authorities mysteriously fail to provide ubiquitous, fast and comfortable public transport, where shops need watchful staff or cameras against thieving customers, and where one cannot even get beer and liquor from vending machines that require no protection from vandalism." https://www.lrb.co.uk/v41/n07/edward-luttwak/friendly-relations https://www.lrb.co.uk/v41/n07/edward-luttwak/friendly-relati... If it's true, it sounds like there are a lot of "political choices" going in on in Japan that are completely unknown to the rest of the world.
csomar 7y ago
I was in Tokyo last month. I think the city is under-estimated and not getting the praise that it deserves. It is true that you get less square meters in Tokyo, but the Japanese makes it up by quality, utility and accessibility. Quality: Having stayed in relatively cheap locations, you get much better quality (especially clean) comparing to what you'd get if you were in New York, Hong Kong or "Paris". Technology: Japanese care about technology and convenience. Toilets and showers are one example. Being able to store your luggage in several stations. Automated doors for practically any store. Small details that add up. Accessible: There is a great transit system that makes the whole place very accessible. Even the most remote places are still accessible by train. The train stations are not the most modern in the world but at least smell good enough.
- magnetic 7y ago
  Why did you use double quotes around Paris?
rb808 7y ago
If you restricted London to 1% foreign born people you wouldn't see a housing shortage either - currently 37% of London's population was born outside of the country. The article quickly dismissed that political choice, but it seems more relevant to me. Being an immigrant myself I'm not anti-immigrant, but it is important for things like housing policy.
- ramraj07 7y ago
  So you think Tokyo is less than 1% foreign born?
  - myrandomcomment 7y ago
    486K as of 2017. So around ~3% http://nbakki.hatenablog.com/entry/Foreign_Population_by_Nationality_in_Tokyo_as_of_2017 http://nbakki.hatenablog.com/entry/Foreign_Population_by_Nat...
pacifika 7y ago
Uk is not London
amai 7y ago
The number of houses built is not the best metric. How many square meters of housing are build every year?
crimsonalucard 7y ago
Kind of unrelated but also relevant. What is it like working as a software engineer in Japan vs. say San Francisco? How's the pay? The stress? San Francisco is a filthy city but would are software engineers happier in that city or would they be in Tokyo?

363 points by sampo 7y ago

I never understood this argument. Japan is one of the most different places relative to everywhere else. That you can't find a more familiar example almost becomes a counter argument. There is something about housing markets that makes people feel like their city is somehow unique and if they could just fix their local problem everything would be great. While pretty much every in demand major city in the world is having the same problems.

thefounder 7y ago

The difference here is that London has a lot of foreign and domestic real estate "investors" that I'm pretty sure won't be happy with affordable housing for everyone. Who wants London's property market to crash?

TaylorAlexander 7y ago
“Who wants London's property market to crash?” People who value housing as a place to sleep rather than a financial investment.
- Aeolun 7y ago
  This should be about 100% of the voters right?
  - mjevans 7y ago
    Of those that can AFFORD to live in London? Seems unlikely.
  - dodobirdlord 7y ago
    No, not really. People who own their homes have a vested interest in prices rising, people who live in government-mandated affordable housing have no particular stake one way or the other, and people who rent at market rates often have low visibility into the fact that their rates are the result of a housing shortage and prefer to blame landlords for renting at prices the market will bear.
  - hopscotch 7y ago
    Most of the middle class and up in the UK have a significant chunk of their wealth tied up in property (their own homes, then investment property), so not really.
  - inflatableDodo 7y ago
    In the UK, since the early 1980's, it has been considered political suicide by a succession of both conservative and labour governments to not give money to the middle classes in the form of large increases in the value of their homes. This is one of the main reasons we have built about half as many houses as Canada since 1980, while having around twice the population.
    - ZeroFries 7y ago
      Wouldn't this only work as a method of increasing middle class wealth if you owned 2+ properties? Otherwise, you have to live somewhere. You can't sell your house and unlock that wealth increase without spending it all on the next place to live.
      - inflatableDodo 7y ago
        People became obsessed with their home valuation. How much more money your house was worth since you bought it became one of the main methods of social boasting for decades, regardless of whether you were actually able to really profit from any of it.
dublinben 7y ago
Current owners of scarce real estate wouldn't lose money if zoning laws were changed to allow more density. The land they own would actually become more valuable, as it could now have more units than before. Allowing more productive use of the underlying land is actually good for both the sellers and buyers of housing.
CydeWeys 7y ago
London now has more renters than owner-occupiers, so the answer is, most of London's inhabitants want property prices to decrease. This would make their rent more affordable and give them a better shot at transitioning from renter to owner (which is a goal of many).

tehjoker 7y ago

Just a reminder that land is a limited natural resource that does not have a monetary value assigned to it except by political choice. We could assign zero dollar value to land and allocate it democratically based on utility to the public and with an eye to preserving the environment. Allowing a market in land doesn't allocate it to the best uses (why do we have fancy hotels on the best real estate when there are homeless people?), just to the purposes of the people with the most money. If the people that own the construction equipment refuse to build when land is worth less, the public should step in and do it. For the liberals out there, if we did this a certain person would not be president and the country would be a better, more egalitarian place. Imagine having nearly everything you pay in rent back in your pocket instead of being progressively squeezed more and more each year and spied on (given the increasing installation of monitoring equipment that you do not control). If we could ban owning properties that you do not personally use, imagine how that would change the composition of cities. Gentrification would be vastly reduced. Shops, community centers, and other things that people love wouldn't get kicked out of town because the rent always increases. That would be revolutionary.

Aeolun 7y ago
> democratically based on utility to the public Ok, so I want to live in the center of the city, because there the walking distance is shorter. John wants to do the same thing, but he gets assigned a tiny plot somewhere miles outside the center. How will you make value judgements about people in this manner? You cannot assign randomly either, as everyone will hate the place they live.
- geofft 7y ago
  There are lots of ways to do it, but yes, whatever you do, you have to make that value judgment. I have trouble believing that the value judgment "Your parents were richer than John's parents" is anywhere near the top of the list of reasonable approaches. (I have real trouble believing that the value judgment "Your grandparents shared a race with the politically powerful, who refused to sell to John's grandparents" or "Your great-grandparents shot John's great-grandparents in the face" are anywhere except right at the bottom.)

hackermailman 7y ago

Japanese also don't consider housing to be equity or investment, it depreciates in value every year. A house is just a house not something to speculate on or store money in. https://www.reuters.com/article/us-japan-economy-land/japan-average-land-prices-rise-for-1st-time-in-27-years-government-survey-idUSKCN1LY10J https://www.reuters.com/article/us-japan-economy-land/japan-...

itsaidpens 7y ago
This very nearly almost made me aroused. What a wonderful idea.
- Waterluvian 7y ago
  I ranted about this concept recently when I went to buy my family a house. I can't believe it exists somewhere.
dev_dull 7y ago
Even before you mix in build-friendly government policies, Japan has had decades long population decline and extremely difficult immigration process. This is literally the opposite of the major US cities which have seen the most housing inflation. Nothing is built and everybody is moving in.
- Barrin92 7y ago
  as the article points out, there is significant net migration to Tokyo both from the country itself and from abroad, which makes the situation indeed comparable. I seriously wonder if people here even bother to at least skim the article. In fact Tokyo has grown significantly faster than New York or Los Angeles over the last fifteen years. (population up by about 1.2 million compared to 500k respectively).
zizee 7y ago
I believe this is partly a cultural artifact of Japan being earthquake prone. The severity and frequency of earthquakes used to make it difficult to build housing that would last.

sbenitoj 7y ago

It’s amazing that this even needs to be published — no study is needed to prove the laws of supply and demand that have been known and obvious for centuries.

klyrs 7y ago
In the neighboring cities of Vancouver, the "known and obvious" laws are false. We have developers building skyscrapers full of condos which are selling for 500k-2M for a 1 bedroom. They're largely vacant because they're bought as investment properties. The ultra-rich can afford these places, but don't need to sleep in them. The demand isn't just people who need a place to stay, and rental prices are absurdly high. We've got a new tax in Vancouver that's helping: the empty homes tax. But that's only Vancouver and not the outlying area.
- asdfasgasdgasdg 7y ago
  They aren't false. There just hasn't been sufficient building allowed to take up the slack. If Vancouver took a page from Wizards of the Coast's tactics, prices would eventually go down. Namely: you have to convince speculators that you are willing to build (issue cards) until the value of speculative assets falls to the livable price for everyone else. If they were willing to allow unlimited building until the prices fell to the desired level, eventually speculators would realize that Vancouver property is a terrible bet. Actually the presence of these investors is just a reflection of Vancouver's own unwillingness to allow said amount of building. If the speculators thought there was any chance of them building enough to meet demand, they would no longer view housing in Vancouver as a safe investment. So it's really a self-inflicted wound, not a violation of the laws of supply and demand. That being said, an empty home tax does not seem like a bad supplemental approach. However, even assuming the tax is perfectly effective, if the population inflows outpace building, prices will continue to rise. And I would guess that is likely to be the case. The tax is a band-aid, but the problem needs stitches and cyanoacrylate.
  - klyrs 7y ago
    The cities are all extremely friendly to developers (our "affordable housing" is $1700/mo for a 1-bdrm and developers are only required to build a small fraction of "affordable" units). I'm not sure how familiar you are with the area, but it doesn't seem like anybody is holding back on new development except for some weak and failing anti-gentrification efforts. Another significant factor in our local economy is a massive amount of money laundering, perhaps billions of dollars worth. It's been washed in real estate -- and laundry is one place where supply and demand break down: losses are acceptable. What we're seeing is a huge demand for apartments, at rates that property owners can't afford, given the massively inflated value (hence tax). And homeowners (the upper-middle class), sensibly, don't want to see the market crash. So they don't actually want the government to act: new homeowners fear losing half of their investment. It's a vexatious problem all around

WillPostForFood 7y ago

Tokyo proves you need tremendous investment in infrastructure, not just unleashing developers to build without restriction.

CydeWeys 7y ago
Most (if not all?) of the transit in Tokyo is private. When you build densely enough, transit becomes highly profitable on its own, and someone will do it.
- njepa 7y ago
  They are private in ways specific to Japan that, what I know, you pretty much won't find anywhere else.
  - kaybe 7y ago
    Can you elaborate?
    - majormajor 7y ago
      Transit as retail and real-estate play: https://www.citylab.com/transportation/2012/05/secret-tokyos-rail-success/2044/ https://www.citylab.com/transportation/2012/05/secret-tokyos... The end to end control over development of these networks+districts was still more centralized, though not by a government, compared to the rather uncoordinated mess that has been US public transit development.
  - solidsnack9000 7y ago
    Public-private partnership is not so "specific to Japan". The transit/retail connection is definitely a uniquely bright idea but it's something that many other jurisdictions could emulate.
    - njepa 7y ago
      Having that work is specific to Japan. If there is a single example of someone managing to do that successfully, especially with multiple companies, I would like to hear about it. Transit/retail or rail plus property is used in other places, like Hong Kong, but with government owned operators. https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/the-rail-plus-property-model https://www.mckinsey.com/industries/capital-projects-and-inf...

lovemenot 7y ago

Not mentioned in the article, but also significant is that in the last decade or so, commercial property developers have been required to provide housing too. We can see many successful examples of mixed-use buildings in predominantly commercial districts such as Shinjuku and Roppongi.

Danieru 7y ago
That is not a requirement but rather an innovation first done by Mori Tower about thirty years ago. Most large sky scrappers are still pure office towers. The mixed use developments are rare and lifestyle branded.

burlesona 7y ago

> What Japan’s inexpensive homes and its alternative policy approach prove is that the housing shortage in British cities is not inevitable. Housing does not have to be expensive in prosperous cities. The housing shortage is something we have chosen to experience and can choose to change if we want to. Written for Britain, but this could be applied universally.

njepa 7y ago
It is also meaningless. Yes, if you get to choose what to do, you can do whatever you want. But you don't, so affordable housing remains an unsolved issue in most places. Things haven't changed and aren't changing just because people become convinced otherwise.
- cheriot 7y ago
  There's a lot of people (in the US at least) that see appreciating property values as inevitable. Combined with views associating dense housing with urban ghettos from the 80s, it's one of the reasons people think building more houses won't make them more affordable.
  - ryl00 7y ago
    That's weird. Don't we get enough stories about Rust Belt economic hardship and Detroit real estate horror stories to know that property values don't always go up? Have we already forgotten 2008?
    - yxhuvud 7y ago
      But it don't have to take a depression to create sinking house prices. In Sweden we had shrinking house prices between 1931 to 1981, with only three years (right after the war) when prices increased. The same period is the most economically successful period we ever had. Why? Because politicians built a shitton of houses (and tore down a lot of crappy housing too). Nowadays people here too think prices always go up, not realizing it is a political choice. It may very well be the right choice, but so many doesn't even understand it is a choice in the first place.

andy_ppp 7y ago

I really hate this trope that is wheeled out about Japanese accomodation; the flats that people talk about would be considered too small to live in by western standards. Most of them seem to be made of horrendous cheap plastic prefab; you get a corridor with a kitchen in it, a mezzanine to sleep on above said corridor that is too small to sit upright, a 7'x'7 living area and a bathroom (including toilet) that is about 2ft x 2ft. For this delight there are people being charged $1000 per month or more in rent. Add in the fact that Japanese have an extremely different relationship to property culterally (and due to earth quake fears) means propeerties are often knocked down and rebuilt (the article notes this - 600000 new homes for an ageing population seems like most of those are going to immigrants). A lot of people in Europe prefer the shared living, and it is better use of resources - you only need one bathroom/one living room per 3 people and those can be MUCH nicer than these micro appartments. London and the west also have different cultural values about building high rise property and overlooking neighbours. It's fine that Japan doesn't mind a sky scraper being built overshadowing their homes but for Londoners or elsewhere this is simply unacceptable to suggest we can change our whole culture to Japanese values and magically solve housing problems.

JumpCrisscross 7y ago
> London and the west also have different cultural values That’s the article’s point. Housing shortages are a political choice.
- deleted 7y ago
  [deleted]
c0nfused 7y ago
I think it's not quite as vigorous in opposition as that. The argument is more that housing shortages are a result of how we in the west regulate construction and housing leasing to under supply. I'm not a Londoner, but my american city of about 1 million people has more than 60 different residential zonings. My home can be a single family home, a day care, or a coffee shop with up to 2 employees who reside off the property itself. Additionally, the house is in a historic district and no changes to the exterior may be made that are visible from the alley or street can be made with out approval by the city via application and subsequent public forum. I can see how this would strangle growth of housing supply as the place grows.

BurningFrog 7y ago

In a less exotic location, Houston proves the same.

pascalxus 7y ago
Houston and Chicago put the bay area to shame with populations over 2 million, high growth and super cost effective housing. The secret is no zoning laws in Houston
- seanmcdirmid 7y ago
  Topography also plays a role, Houston and Chicago can grow outward forever, something that pesky hills and water get in the way of in the Bay Area.
- elgenie 7y ago
  Houston does, however, rely on the taxpayers in the rest of the country to underwrite their many many housing units built in a floodplain.

dhfromkorea 7y ago

I am not convinced. The attribution to the simple zoning system is surely not a complete proof, if any. Consider a counter-example: South Korea that has a very similar zoning system. Yet the housing price around Seoul soared roughly by 60% the past 3 years---so did rents (to a smaller but still significant rate). All the while the apartments supply has been at record high in 10 years. That zoning policy may be a factor but clearly not sufficient.

cheriot 7y ago
> All the while the apartments supply has been at record high in 10 years. Has the number of jobs increased? Housing needs to be built in proportion to office/factory/commercial space in order to balance supply and demand.
- dhfromkorea 7y ago
  The employment rate has increased by somewhat unnoticeable amount over the past 10 years [1]. The increased housing supply is mostly due to cost factors (tax breaks from the previous administrations, low interest rate) and the demand due to decline of small cities (demand gets concentrated around Seoul, the capital city; people buy houses around Seoul while living far away in another place on rent). As for the office/factory/commercial space, there has been a sharp increase in supply, and the vacancy rate (spaces that cannot find tenants) is 10-20% in major cities. Folks still buy buildings with a yield of 2.5-4% because the interest rate is so low. I am currently based in Cambridge, Boston. There are empty stores that have been looking for tenants for more than a year. [1]: http://www.index.go.kr/unify/idx-info.do?idxCd=4013 http://www.index.go.kr/unify/idx-info.do?idxCd=4013

b212 7y ago

How the heck can they deliver so many flats? Poland with 30% of Japan’s population builds roughly 5 times less houses per year and trust me we’re building new blocks literally everywhere. Yet flats are getting much more expensive every year, it’s cheaper for Londoners to buy flats in London than for Poles to get something in Warsaw. I guess what works for Japan won’t work for European Union as folks from Germany, the UK or France can buy Greek, Bulgarian or Polish flats easily...

jaredklewis 7y ago
> How the heck can they deliver so many flats? > ... > I guess what works for Japan won’t work for European Union as folks from Germany, the UK or France can buy Greek, Bulgarian or Polish flats easily... This confuses me. Af first, you are impressed by the fast rate of construction in Japan and affordable prices in Tokyo. From there, it seems reasonable to speculate that if Poland increased residential construction to be more in line with that of Japan (proportional to population), Poland might also see a reduction in prices. But you instead immediately jump to the conclusion that it wouldn't work because Poland is in Europe. Japan's system works well enough with a population of 125 million. Any particular reason it couldn't scale to support the 500 million in Europe? If foreigners are eager to buy up Polish housing, this is only a problem if Polish housing is scarce. If instead, Poland increases construction until it has a surplus of housing, housing becomes just another export that can be sold at a profit, injecting money into the Polish economy. So why wouldn't it be in Poland's interest to follow the Japanese model?
Tharkun 7y ago
Japanese flats usually don't have central heating. They tend to have a/c in one room. The kitchen is usually tiny by western standards. Often there is no bedroom -- the living room is used for sleeping. In all, 20-30m² flats are pretty common. This is, of course, a lot cheaper to build than 100m² flats with two bedrooms, central heating and a kitchen bigger than most Japanese restaurants. You can't (or rather, propbably don't want) tiny flats unless you live in a city like Tokyo. Where you can find 24/7 convenience stores everywhere, where there's affordable and tasty food to be found everywhere and at almost any time, where public transport is amazing and affordable. Hell, you don't even need a bath in Japan, as there are public baths everywhere. TL;DR invest in your city and smaller, more affordable housing becomes possible and desirable. If you don't, it'll start to feel like USSR housing really quickly.

purplezooey 7y ago

Look at this. From the article it says Tokyo started 110,000 houses annually per year since 2003. Population of Tokyo: ~9M. Population of the Bay Area: ~7M. The BA starts around 11,500 houses per year. Roughly similar in population -- a tenth of the housing being built. Wtf.

Shivetya 7y ago
because it is wholly under the domain of politics in the Bay Area. Most if not all special interest groups are linked back to either those in office or their party. the usual method is to form groups where you friends and family get nice part time advisement jobs pulling down 100k or more; we recently had a candidate in my state who part timed a get out to vote PAC for even more. There have been many stories posted here and elsewhere how nearly every attempt to build housing is derailed, usually under the guise of setting aside for "affordable housing", followed by union workers only, followed by environmental concern; one was defeated for adding a few hours of shade to twenty percent of a play area/park of a school!; to finally architectural concerns because why would we want to impose on history of buildings barely a hundred years old. It comes down to money for politicians and those already there not wanting "those people" living among them. Heck in my local metro area they have squads to clear out the homeless and undesirables every time a convention or big game comes in; a town which has been blue for most all this century and most of the previous. One where you will hear the politicians stamp their feet about how unfair it is and if only they had more power and money they could fix it, yet they never have. Instead a new stadium displaced an older black church, go figure.
- codedokode 7y ago
  > to finally architectural concerns because why would we want to impose on history of buildings barely a hundred years old. On the other hand, why do people need to build a new, ugly modern high-rise buildings in historical parts of the city? Is there not enough of other land? Historical parts better stay historical forever and there should be no new buildings, I think. Because no tourist will ever come to see modern, ugly concrete buildings.

ousta 7y ago

crime is very low in japan, food is often of quality, low immigration so less chance to end up in some places where you re the only person speaking english and women are not allowed into coffee shops. so yeah building more housing works. in western countries it is a bit more complicated. there are definitly a huge chunk of the real estate that is located in highly undesirable neighborhoods. i don't know many new york well-intended democrats that will trade a spot in chelsea for one in harlem.

codedokode 7y ago

I am surprised to read that houses in Japan are "inexpensive". They are very expensive, as is everything in Japan. Also I think there might be differences because the climate is relatively warm, the houses don't have central heating, which reduces the costs. The prices in London are high probably because there are lot of rich people, lot of immigrants and therefore high demand for housing.

joshdance 7y ago
and those who live in London doesn't allow enough houses to be build to lower the cost?
- sgt101 7y ago
  The planning laws and social/physical infrastructure mitigate against initiatives and changes that would reduce the costs. One fundamental is that the rail gauge in the UK was the first one created, and this meant that tunnels and bridges were built unambitiously, consequentially there are no double decker trains in the UK. If there were double decker trains on the London commute lines London accommodation prices would be significantly reduced (I believe). That's just one small example of the complex confluence of issues that have driven the market in one direction though. Everyone should remember that 60 years ago London housing was very poor as well as relatively expensive (although far more attainable). That's important as it shows that things can and will change over time in the market. We need to think about this because some of the reforms suggested will fundamentally alter the physical geography of the city in ways that will have consequences 100's of years into the future. Architects and planners have a very bad track record with respect to these alterations, for example see Birmingham, Portsmouth, Ipswich, Reading in contrast to Manchester, Brighton and Bristol where history has run differently (Bath is a really good story - the 60's got stopped in its tracks there).

sgt101 7y ago

Think speak in the article :"Tokyo reformed its green belt twice" in fact Tokyo did not reform its green belt, it abandoned it. Also, yes, it is good if single people can make the choice to live independently, but a far larger problem in my mind is that families are driven either into poverty or out of London. The reform that I would seek is that apartments should have three bedrooms, this would create desirable family homes as well as flexible share candidates.

lopmotr 7y ago
What makes you think the market won't provide those 3 bedroom apartments? Why should those details be dictated? Isn't the the whole problem causing housing shortages in the first place - local government deciding how much luxury everybody must have, no matter how much they don't want it? Whenever there's a housing shortage, people start wanting to impose even more restrictions instead of allowing the people living there to drive the market with what they really want.
- sgt101 7y ago
  The market is providing 2 beds (one big, one small) because these are acceptable to young professional couples. When babies come (which is often what happens) then the apartment works for a short time, but then confronts the couple with a challenge. The second bed is inadequate, and if the babies are of different sexes then the law dictates that they can't share the room past 9(?) years old. This causes the couple to seek a house (there are no 3 bed apartments) houses are very inefficient in terms of footprint, and affordability means that most young couples end up commuting. Government has a role because developers just building things mean that the costs of the development are unanticipated and then later socialised as collateral damage. On the other hand if government manages development then the appropriate stock with appropriate infrastructure (doctors, schools, shops, transport) can be provided at the time and the cost socialised in the transaction and managed. This is economically much more efficient.

sytelus 7y ago

This is bit overblown article. Certainly bad zoning laws can help inflate prices and there are several other factors like investors using real-estate for investment. However the major cause of real-estate price increase over long term is plain and simple: heavy urbanization of entire world. If you look at graph of population moving to urban centers over centuries it looks like literally almost vertical line in recent decades [1]. I'd heard that 90% of Earth's population is concentrated around just 40 urban centers! The real-estate in rural area has remained same or took nose dive while in urban areas it keeps going up. Interesting question is how fat this trend will keep going? My guess is that this is black-hole effect, a larger city attracts even larger population towards it. Japan has recently became outlier because of economic issue as well as population decline. [1] https://ourworldindata.org/urbanization https://ourworldindata.org/urbanization

Udik 7y ago

I loved the beginning of a recent article on Japan on the London Review of Books: "One can fly to Japan from anywhere, but from Japan one can only fly to the Third World, and it hardly matters whether one lands in Kinshasa, London, New York or Zurich: they are all places where one must be constantly watchful and distrustful, where one cannot leave a suitcase unattended even for ten minutes, where women strolling home through town at 3 a.m. are deemed imprudent, where the universal business model is not to underpromise and overdeliver but if anything the other way round, where city streets are clogged at rush hour because municipal authorities mysteriously fail to provide ubiquitous, fast and comfortable public transport, where shops need watchful staff or cameras against thieving customers, and where one cannot even get beer and liquor from vending machines that require no protection from vandalism." https://www.lrb.co.uk/v41/n07/edward-luttwak/friendly-relations https://www.lrb.co.uk/v41/n07/edward-luttwak/friendly-relati... If it's true, it sounds like there are a lot of "political choices" going in on in Japan that are completely unknown to the rest of the world.

csomar 7y ago

I was in Tokyo last month. I think the city is under-estimated and not getting the praise that it deserves. It is true that you get less square meters in Tokyo, but the Japanese makes it up by quality, utility and accessibility. Quality: Having stayed in relatively cheap locations, you get much better quality (especially clean) comparing to what you'd get if you were in New York, Hong Kong or "Paris". Technology: Japanese care about technology and convenience. Toilets and showers are one example. Being able to store your luggage in several stations. Automated doors for practically any store. Small details that add up. Accessible: There is a great transit system that makes the whole place very accessible. Even the most remote places are still accessible by train. The train stations are not the most modern in the world but at least smell good enough.

magnetic 7y ago
Why did you use double quotes around Paris?

rb808 7y ago

If you restricted London to 1% foreign born people you wouldn't see a housing shortage either - currently 37% of London's population was born outside of the country. The article quickly dismissed that political choice, but it seems more relevant to me. Being an immigrant myself I'm not anti-immigrant, but it is important for things like housing policy.

ramraj07 7y ago
So you think Tokyo is less than 1% foreign born?
- myrandomcomment 7y ago
  486K as of 2017. So around ~3% http://nbakki.hatenablog.com/entry/Foreign_Population_by_Nationality_in_Tokyo_as_of_2017 http://nbakki.hatenablog.com/entry/Foreign_Population_by_Nat...

pacifika 7y ago

Uk is not London

amai 7y ago

The number of houses built is not the best metric. How many square meters of housing are build every year?

crimsonalucard 7y ago

Kind of unrelated but also relevant. What is it like working as a software engineer in Japan vs. say San Francisco? How's the pay? The stress? San Francisco is a filthy city but would are software engineers happier in that city or would they be in Tokyo?