7 ms·

> This counsels that a young person born and educated in e.g. Gifu move to Tokyo after graduation to earn a living. > Many, many do. While Japan’s overall popul

> This counsels that a young person born and educated in e.g. Gifu move to Tokyo after graduation to earn a living. > Many, many do. While Japan’s overall population is declining, Tokyo’s increases by about 100,000 people per year. Notably this differs from America in that rent acts as a natural counterbalance here. It’s not common knowledge that a university graduate should move to New York or San Francisco, in fact if you aren’t in a top paying field it’s probably common knowledge that one should not move to these cities. I wonder how much different the population landscape of the United States would look like if NYC, the Bay Area, LA etc had ever figured out how to plan for urban growth in the same way Tokyo did (context: you can afford a small single family home on a middle class income in Tokyo, I think prices there are around 30% over other Japanese cities)

ghaff 5y ago
Note that parts of somewhere like NYC are extremely expensive. Of course, those are the large parts of Manhattan and parts of Brooklyn where young professionals want to live. Other boroughs can be significantly less expensive but it's not what most professionals mean when they think NYC. Of course, the general point applies. If you're talking about a lower income job you can get just about anywhere, moving to many big cities isn't a great financial decision.
MengerSponge 5y ago
Someone who knows more about Japanese culture and tax policy needs to weigh in, but my understanding is that housing is typically not considered a long-term investment vehicle, to the point that houses are expected to be demolished after some number of decades and depreciated accordingly. This mindset prevents an established base of property owners from blocking subsequent development, resulting in their property values skyrocketing. America might have a chance of fixing this with national-level zoning, which will never happen as long as current political alliances are the way they are.
- srcreigh 4y ago
  The way I understand this (as a Canadian) is When most voters own homes, politicians increase home prices When (or if) most voters don't own homes, politicians decrease home prices In your understanding, what is the force which breaks this equilibrium?
- deleted 5y ago
  [deleted]
- BurningFrog 5y ago
  I suspect the causality is reversed: Housing is not considered a long-term investment because demolition and new construction is easy.
  - asciimike 5y ago
    Really good article on zoning in Japan: http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html I think it's a bit of both, it's not viewed as as much of an investment therefore zoning laws are lax, which mean that housing can't become an investment because anyone can build (up to) anything on a lot.
  - Tiktaalik 5y ago
    I think the tax code even incentivizes demolition in that the taxes for sales of bare land versus land with a structure on it are less.
    - MarkSweep 5y ago
      In constraint, California tax policy incentivizes keeping around crappy old buildings. If keep the old building, Proposition 13 limits how much your tax can go up. If you build a nice new building, the state punishes you but reassessing the value of your property. This can greatly increase your property tax if you have owned the property for a while.
  - MengerSponge 5y ago
    My instinct is that the causal arrow begins with earthquakes and disposable (timber-based) building practices, which keep housing/structures from being viewed as stable long-term vehicles
    - xxpor 5y ago
      So why didnt California end up in that state, concidering it has nearly the same conditions?
burlesona 5y ago
According to one study US GDP would be 9% higher if SF, LA, and NYC made room. They estimate NYC would grow to 40 million people. https://www.aeaweb.org/articles?id=10.1257/mac.20170388 https://www.aeaweb.org/articles?id=10.1257/mac.20170388 Originally found via: https://www.worksinprogress.co/issue/the-housing-theory-of-everything/ https://www.worksinprogress.co/issue/the-housing-theory-of-e...
- no_butterscotch 5y ago
  It may be good that they don't make room then. I wonder if the US would just become a group of 3 or 4 large sprawling city-states.
  - SllX 5y ago
    SFBA (maybe w/ Sacramento Area and Monterey Bay Area), Greater LA, Seattle Area, Portland+Vancouver and that’s just the West Coast. Add in the 4+ in Texas, two or three different parts of Florida and we haven’t even touched on the Northeast or Midwest still. Nah, the US would not become merely 3 or 4 large sprawling City-States. For all of us city dwellers, there’s plenty that want nothing to do with anything that resembles a City.
  - mactrey 5y ago
    Isn't it weird to use the word "sprawling" here? A world where major cities are affordable would be more dense. It would be easier to preserve land for its natural beauty. The US today is sprawling.
  - kitten_mittens_ 5y ago
    This comment reminds me of https://www.theonion.com/new-study-finds-most-of-earth-s-landmass-will-be-phoeni-1819579315 https://www.theonion.com/new-study-finds-most-of-earth-s-lan....
  - ZoomerCretin 5y ago
    What problems do you think would arise from such a situation?
  - 4y ago
SapporoChris 5y ago
One of the reasons for the immigration is while Tokyo is an expensive city, its costs can be compensated with a tiny apartment. However, it's not necessary to live in Tokyo. Many of the surrounding cities commute to Tokyo on a daily basis. https://en.wikipedia.org/wiki/Tokyo#Demographics https://en.wikipedia.org/wiki/Tokyo#Demographics "During the daytime, the population swells by over 2.5 million as workers and students commute from adjacent areas. This effect is even more pronounced in the three central wards of Chiyoda, Chūō, and Minato, whose collective population as of the 2005 National Census was 326,000 at night, but 2.4 million during the day.[91]"
- golemiprague 5y ago
  If by surrounding cities you mean Yokohama, Chiba and Saitama it is practically the same city, it is all one big metro area and commuting by regular train from those cities takes about half an hour on average. Also, you don't really need tiny apartment, decent size places are not that expensive either if you are willing to live half an hour by train from the central areas of Tokyo.
- Aperocky 5y ago
  > population swells by over 2.5 million I'd imagine at least half of them wouldn't strictly need to be there but for cultural reasons.
lovemenot 5y ago
Kalzumeus spoke about "Tokyo" to represent Tokyo, Osaka, Nagoya and other large regional cities. As you might expect, these Tokyo-like cities are much more expensive at their centre than at their periphery. Nevertheless, I imagine your eyes may water when you find out just how much more so. I only know one of these cities well, and to be fair only in land values not in rentals. In absolute amounts, Tokyo itself is of course more unequal than smaller big cities. But the relative value distribution is perhaps fairly consistent across Tokyo-like cities. Within Tokyo-city, very central regions (Minato-ku) are valued at 4X over central urban districts (Nakano-ku), which in turn, are 8X more expensive to buy than the least valuable outer-Tokyo districts (Hachioji-shi). So there's a 32X differential in land values within that city's borders. Now, let's zoom out from the city itself. Within just a few hours drive or rail journey, we can easily get to 300X land values: $300 in Minato buys the same area of land worth around $1 in a fairly central district of a fairly large town in Nagano. Parts of mountains obviously go for much cheaper than land in these towns, but I don't have good market data for that. My guess is a further 5X - 10X. Undoubtedly, it is more than 1,000 times, and perhaps sometimes as much as 10,000X, more expensive to buy a plot of land in Japan, than another plot of the same size just 500Km - 1,000Km away. One may reasonably dispute these figures in detail. I did try to be conservative. Nevertheless, they are certainly right in the order of magnitude. Getting back to your point, I would say that in spite of the wonderful societal benefits of world-class transportation within and between cities, if the goal was to achieve ball-park economic parity across the regions then that policy in Japan has been a failure. Income & expenditure? Sure ... all of Japan looks pretty consistent. Property valuation? ... the discrepancy is almost unfathomable.
- paulmd 5y ago
  That sounds like a lot, but 32x is probably less than the differential in the US between downtown manhattan and suburban Jersey or Delaware, and of course there's a whole rural level in the US far below that as well. That said, the whole "tokyo is just turbo-expensive!" thing is, in the broad strokes, generally false. Buying land in high-density commercial districts is going to be expensive, just like if you wanted to build a detached single-family home in downtown manhattan, but to put some hard numbers to it: In September 2020, the average listing price for a newly constructed detached wooden house in Tokyo of between 100-sqm and 300-sqm (1,076 sqft and 3,229 sqft) was: https://resources.realestate.co.jp/news/how-much-does-it-cost-to-buy-a-house-in-tokyo-october-2020-update/ https://resources.realestate.co.jp/news/how-much-does-it-cos... > Greater Tokyo Area: ¥36,850,000 ($354,000) > Tokyo (23 Wards + Western Suburbs): ¥42,880,000 ($412,000) > Tokyo 23 Wards: ¥59,410,000 ($570,000) > Tokyo western suburbs: ¥40,110,000 ($385,000) -- > For July to September 2020, the average sales price for a previously owned detached house in Tokyo was: > Tokyo (23 Wards + Western Suburbs): ¥46,150,000 ($443,000) -This was a year-on-year increase of 5.5% and an increase of 14.6% compared to the April to June period, when sales dropped sharply due to coronavirus social distancing measures. -This was also the highest average sales price since the July to September (3rd quarter) 2018 period of ¥47,020,000. > Tokyo 23 Wards: ¥57,170,000 ($549,000) -This was a year-on-year increase of 5.7% and an increase of 15.8% compared to the April to June period. -This was also the highest average sales price since the July to September (3rd quarter) 2018 period of ¥57,170,000. > Tokyo Western Suburbs: ¥32,730,000 ($319,000) -This was a year-on-year increase of 10.1% and an increase of 5.7% compared to the April to June period. -- Honestly those prices aren't bad at all for "the densest metropolis in the world", especially considering the excellent transportation and other infrastructure that remove the need for cars (and they have cheap healthcare/etc by US standards as well). That is for 1k-3k sq-ft detached family homes, so that's not $300k for a shoebox, that's $300k for an average home by western standards. Undoubtedly some difference in materials/etc but it's not uncommon to see houses going for $750k-1m in 2nd-tier or 3rd-tier tech cities in the city proper and $500k+ on the outskirts. The bigger factor, by US standards, is that salaries are much lower, obviously that is a much bigger number if you're making $50k a year at the peak of your career, but again, with US housing prices generally being 2-4x japanese prices, it probably ends up being similar-ish. I have a friend that was subletting a room who got the boot because the owner was selling, got $750k for an average single-family home in a second-tier or third-tier city with insane tax rates.
csours 5y ago
Point taken, but young people still move to larger regional towns. You may move to Houston, Atlanta, Kansas City, etc for economic reasons.
JohnWhigham 5y ago
This is what can be accomplished with a homogeneous society. The US is too multicultural and has too many competing interests (both people and companies) for something like this to even be thought of.
kryptiskt 5y ago
Tokyo had tremendously expensive real estate before the 80s bubble burst, so I wonder if it's the result of wise planning as much as the outcome of the 30 years of stagnation.

ghaff 5y ago

Note that parts of somewhere like NYC are extremely expensive. Of course, those are the large parts of Manhattan and parts of Brooklyn where young professionals want to live. Other boroughs can be significantly less expensive but it's not what most professionals mean when they think NYC. Of course, the general point applies. If you're talking about a lower income job you can get just about anywhere, moving to many big cities isn't a great financial decision.

MengerSponge 5y ago

Someone who knows more about Japanese culture and tax policy needs to weigh in, but my understanding is that housing is typically not considered a long-term investment vehicle, to the point that houses are expected to be demolished after some number of decades and depreciated accordingly. This mindset prevents an established base of property owners from blocking subsequent development, resulting in their property values skyrocketing. America might have a chance of fixing this with national-level zoning, which will never happen as long as current political alliances are the way they are.

srcreigh 4y ago
The way I understand this (as a Canadian) is When most voters own homes, politicians increase home prices When (or if) most voters don't own homes, politicians decrease home prices In your understanding, what is the force which breaks this equilibrium?
deleted 5y ago
[deleted]
BurningFrog 5y ago
I suspect the causality is reversed: Housing is not considered a long-term investment because demolition and new construction is easy.
- asciimike 5y ago
  Really good article on zoning in Japan: http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html I think it's a bit of both, it's not viewed as as much of an investment therefore zoning laws are lax, which mean that housing can't become an investment because anyone can build (up to) anything on a lot.
- Tiktaalik 5y ago
  I think the tax code even incentivizes demolition in that the taxes for sales of bare land versus land with a structure on it are less.
  - MarkSweep 5y ago
    In constraint, California tax policy incentivizes keeping around crappy old buildings. If keep the old building, Proposition 13 limits how much your tax can go up. If you build a nice new building, the state punishes you but reassessing the value of your property. This can greatly increase your property tax if you have owned the property for a while.
- MengerSponge 5y ago
  My instinct is that the causal arrow begins with earthquakes and disposable (timber-based) building practices, which keep housing/structures from being viewed as stable long-term vehicles
  - xxpor 5y ago
    So why didnt California end up in that state, concidering it has nearly the same conditions?

burlesona 5y ago

According to one study US GDP would be 9% higher if SF, LA, and NYC made room. They estimate NYC would grow to 40 million people. https://www.aeaweb.org/articles?id=10.1257/mac.20170388 https://www.aeaweb.org/articles?id=10.1257/mac.20170388 Originally found via: https://www.worksinprogress.co/issue/the-housing-theory-of-everything/ https://www.worksinprogress.co/issue/the-housing-theory-of-e...

no_butterscotch 5y ago
It may be good that they don't make room then. I wonder if the US would just become a group of 3 or 4 large sprawling city-states.
- SllX 5y ago
  SFBA (maybe w/ Sacramento Area and Monterey Bay Area), Greater LA, Seattle Area, Portland+Vancouver and that’s just the West Coast. Add in the 4+ in Texas, two or three different parts of Florida and we haven’t even touched on the Northeast or Midwest still. Nah, the US would not become merely 3 or 4 large sprawling City-States. For all of us city dwellers, there’s plenty that want nothing to do with anything that resembles a City.
- mactrey 5y ago
  Isn't it weird to use the word "sprawling" here? A world where major cities are affordable would be more dense. It would be easier to preserve land for its natural beauty. The US today is sprawling.
- kitten_mittens_ 5y ago
  This comment reminds me of https://www.theonion.com/new-study-finds-most-of-earth-s-landmass-will-be-phoeni-1819579315 https://www.theonion.com/new-study-finds-most-of-earth-s-lan....
- ZoomerCretin 5y ago
  What problems do you think would arise from such a situation?
- 4y ago

SapporoChris 5y ago

One of the reasons for the immigration is while Tokyo is an expensive city, its costs can be compensated with a tiny apartment. However, it's not necessary to live in Tokyo. Many of the surrounding cities commute to Tokyo on a daily basis. https://en.wikipedia.org/wiki/Tokyo#Demographics https://en.wikipedia.org/wiki/Tokyo#Demographics "During the daytime, the population swells by over 2.5 million as workers and students commute from adjacent areas. This effect is even more pronounced in the three central wards of Chiyoda, Chūō, and Minato, whose collective population as of the 2005 National Census was 326,000 at night, but 2.4 million during the day.[91]"

golemiprague 5y ago
If by surrounding cities you mean Yokohama, Chiba and Saitama it is practically the same city, it is all one big metro area and commuting by regular train from those cities takes about half an hour on average. Also, you don't really need tiny apartment, decent size places are not that expensive either if you are willing to live half an hour by train from the central areas of Tokyo.
Aperocky 5y ago
> population swells by over 2.5 million I'd imagine at least half of them wouldn't strictly need to be there but for cultural reasons.

lovemenot 5y ago

Kalzumeus spoke about "Tokyo" to represent Tokyo, Osaka, Nagoya and other large regional cities. As you might expect, these Tokyo-like cities are much more expensive at their centre than at their periphery. Nevertheless, I imagine your eyes may water when you find out just how much more so. I only know one of these cities well, and to be fair only in land values not in rentals. In absolute amounts, Tokyo itself is of course more unequal than smaller big cities. But the relative value distribution is perhaps fairly consistent across Tokyo-like cities. Within Tokyo-city, very central regions (Minato-ku) are valued at 4X over central urban districts (Nakano-ku), which in turn, are 8X more expensive to buy than the least valuable outer-Tokyo districts (Hachioji-shi). So there's a 32X differential in land values within that city's borders. Now, let's zoom out from the city itself. Within just a few hours drive or rail journey, we can easily get to 300X land values: $300 in Minato buys the same area of land worth around $1 in a fairly central district of a fairly large town in Nagano. Parts of mountains obviously go for much cheaper than land in these towns, but I don't have good market data for that. My guess is a further 5X - 10X. Undoubtedly, it is more than 1,000 times, and perhaps sometimes as much as 10,000X, more expensive to buy a plot of land in Japan, than another plot of the same size just 500Km - 1,000Km away. One may reasonably dispute these figures in detail. I did try to be conservative. Nevertheless, they are certainly right in the order of magnitude. Getting back to your point, I would say that in spite of the wonderful societal benefits of world-class transportation within and between cities, if the goal was to achieve ball-park economic parity across the regions then that policy in Japan has been a failure. Income & expenditure? Sure ... all of Japan looks pretty consistent. Property valuation? ... the discrepancy is almost unfathomable.

paulmd 5y ago
That sounds like a lot, but 32x is probably less than the differential in the US between downtown manhattan and suburban Jersey or Delaware, and of course there's a whole rural level in the US far below that as well. That said, the whole "tokyo is just turbo-expensive!" thing is, in the broad strokes, generally false. Buying land in high-density commercial districts is going to be expensive, just like if you wanted to build a detached single-family home in downtown manhattan, but to put some hard numbers to it: In September 2020, the average listing price for a newly constructed detached wooden house in Tokyo of between 100-sqm and 300-sqm (1,076 sqft and 3,229 sqft) was: https://resources.realestate.co.jp/news/how-much-does-it-cost-to-buy-a-house-in-tokyo-october-2020-update/ https://resources.realestate.co.jp/news/how-much-does-it-cos... > Greater Tokyo Area: ¥36,850,000 ($354,000) > Tokyo (23 Wards + Western Suburbs): ¥42,880,000 ($412,000) > Tokyo 23 Wards: ¥59,410,000 ($570,000) > Tokyo western suburbs: ¥40,110,000 ($385,000) -- > For July to September 2020, the average sales price for a previously owned detached house in Tokyo was: > Tokyo (23 Wards + Western Suburbs): ¥46,150,000 ($443,000) -This was a year-on-year increase of 5.5% and an increase of 14.6% compared to the April to June period, when sales dropped sharply due to coronavirus social distancing measures. -This was also the highest average sales price since the July to September (3rd quarter) 2018 period of ¥47,020,000. > Tokyo 23 Wards: ¥57,170,000 ($549,000) -This was a year-on-year increase of 5.7% and an increase of 15.8% compared to the April to June period. -This was also the highest average sales price since the July to September (3rd quarter) 2018 period of ¥57,170,000. > Tokyo Western Suburbs: ¥32,730,000 ($319,000) -This was a year-on-year increase of 10.1% and an increase of 5.7% compared to the April to June period. -- Honestly those prices aren't bad at all for "the densest metropolis in the world", especially considering the excellent transportation and other infrastructure that remove the need for cars (and they have cheap healthcare/etc by US standards as well). That is for 1k-3k sq-ft detached family homes, so that's not $300k for a shoebox, that's $300k for an average home by western standards. Undoubtedly some difference in materials/etc but it's not uncommon to see houses going for $750k-1m in 2nd-tier or 3rd-tier tech cities in the city proper and $500k+ on the outskirts. The bigger factor, by US standards, is that salaries are much lower, obviously that is a much bigger number if you're making $50k a year at the peak of your career, but again, with US housing prices generally being 2-4x japanese prices, it probably ends up being similar-ish. I have a friend that was subletting a room who got the boot because the owner was selling, got $750k for an average single-family home in a second-tier or third-tier city with insane tax rates.

csours 5y ago

Point taken, but young people still move to larger regional towns. You may move to Houston, Atlanta, Kansas City, etc for economic reasons.

JohnWhigham 5y ago

This is what can be accomplished with a homogeneous society. The US is too multicultural and has too many competing interests (both people and companies) for something like this to even be thought of.

kryptiskt 5y ago

Tokyo had tremendously expensive real estate before the 80s bubble burst, so I wonder if it's the result of wise planning as much as the outcome of the 30 years of stagnation.