This is a view on unregulated building that I don't get how you came to it. If you're free to build whatever then the most profitable thing is probably a townho

This is a view on unregulated building that I don't get how you came to it. If you're free to build whatever then the most profitable thing is probably a townhouse. Whatever marginal gain might be had selling one fool a bigger house than anyone needs is less than the gain of selling two or three people a far more modest, somewhat shared living arrangement in the same floor space. Not exactly urban density, just well, town density. I legit don't know what sort of seedy business you reckon is held back merely by regulations right now. Put another way, as a rational profit seeking venture, I certainly can't see any such business wanting to set up by a school in particular. Kids aren't known for their disposable income and there's no real benefit towards picking a controversial position. But in any case this is all solved by Tokyo minimum nuisance zoning. In short, what that means is you can't build your seedy business in your school zone but you can put your school in your seedy business zone. The zones don't directly prescribe how land can be used, only limits the amount of tolerable disturbance allowed per neighborhood. Things get built where they otherwise wouldn't, but no one has to deal with more annoyance than they bought into.