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Economy

Aging Japan grapples with 8m empty homes and stashed cash

More than $200,000 found at a Tokyo demolition site was left unclaimed

This uninhabited house in Kagawa Prefecture on the island of Shikoku is being refurbished with help from Dutch students.

TOKYO -- As Japan's population ages rapidly, a record 13.6% of housing stands empty nationwide while developers shrug off flat demand and continue their building spree.

A record-breaking 8.46 million residences were unoccupied in 2018, according to a twice-a-decade housing survey released Friday by the central government. The number has grown by 260,000 since the last survey in 2013.

Secret stashes of cash are often discovered when those houses are taken down, a trend that sheds light on the isolation of the elderly. 

Vacant houses can be divided into two categories: those intended for future rental or sale, and the rest. In the latest survey, those in the latter category reached 3.47 million residences, up 9.1% from 2013.

The increase comes largely from a building boom that defies the shrinking population. Construction on about 950,000 new residences began in fiscal 2018, according to the survey -- 0.7% more than in the year before. This has only squeezed demand for aging buildings that are already vacant, and local governments have gotten stuck dealing with the aftermath.

A local resident does yardwork at an empty house near Tokyo. A shrinking population and construction boom means more homes are unoccupied in Japan.   © Reuters

Vacancy rates were highest in Yamanashi Prefecture, home to the northern part of Mount Fuji, at 21.3%. Wakayama Prefecture, known for its many Buddhist temples, followed at 20.3%, and former Winter Olympics site Nagano Prefecture at 19.5%. Many of these are popular locations for vacation homes, which the survey counts as vacant housing. But the numbers also reflect a rural flight driving population declines in those areas.

As old housing is torn down, cash found there is being brought to the police. The equivalent of more than $200,000 was once found at a Tokyo demolition site in 2018.

"It's probably partly because more elderly people are living on their own," explained Hideto Kone, deputy director of a national accreditation body for specialists in cleaning out the belongings of the deceased.

The money "was likely secret savings that the families didn't even know about," Kone said.

If the original owners cannot be found, and the finders also give up their claim, the cash goes to the local government. The Tokyo Metropolitan Government took in about 560 million yen ($5 million) this way in 2018.

After Japan passed legislation in 2015 to counter the surge in empty houses, municipalities around the country had urged owners to repair or demolish 708 properties by last October. Municipalities took action on behalf of noncompliant owners in 118 of these cases.

Owners are responsible for demolition costs. But in many cases, tracking them down is difficult. "Area residents ask us to do something because empty houses are a hazard, but it's costly and time-consuming," the head of a Hokkaido municipality lamented.

Localities are not idly standing by, becoming creative in coping with the problem. One city made a park out of the lot remaining after an empty house was removed. In exchange for renting the land for free, the landowner enjoyed a five-year exemption from property taxes.

The private sector is also seeing opportunities. Katitas, a broker of existing houses, purchases single-family homes, makes improvements and sells them for around 10 million to 15 million yen.

Services around the country provide information on uninhabited properties available for rent or purchase, and a variety of startups have launched businesses making use of unoccupied homes. Nonprofit organizations have turned such properties into cafes or guesthouses. Using them for Airbnb and other short-term rentals is also under consideration.

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