Hacker News new | past | comments | ask | show | jobs | submit login
Over 13% of the homes in Japan are abandoned (flip.it)
194 points by bookofjoe 10 hours ago | hide | past | web | favorite | 158 comments





A modern Japanese man, working in tech in California, in his late thirties or early forties spoke with his parents back home in Tokyo five years ago about two houses the family owns, which are in desirable areas, well-maintained and currently occupied. The taxes and financing are such that there is no current scenario where the man could own one or both of these homes. It is simply too expensive. None of the people in this vignette are poor, they are all moderately wealthy people, who have fairly substantial income, and some savings.

Move the story to California. A three bedroom home in the San Francisco Bay Area, covered by Proposition 13, purchased by ordinary working people with good financial habits, around the 1970 time frame, and a working late-thirties, early forties person with some savings and good financial habits, cannot afford to take the home under almost any circumstances due to property taxes (cost of ownership) and competition for financing (loans not available in practice due to terms).

There is a lot of emotion on both sides of the Pacific in each of these cases. Individuals are quick to point fingers at the other individuals. It has been decades in the making, and the situation is not new. Many on both sides of the Pacific are renting at high prices (no accumulated capital) and deferring (or avoiding) having children.


> Move the story to California. A three bedroom home in the San Francisco Bay Area, covered by Proposition 13, purchased by ordinary working people with good financial habits, around the 1970 time frame, and a working late-thirties, early forties person with some savings and good financial habits, cannot afford to take the home under almost any circumstances due to property taxes (cost of ownership) and competition for financing (loans not available in practice due to terms).

California actually has ways to inherit not only the home of your parents and grandparents, but also their tax rate.


Which is bad. It's possible it may end up benefiting me since my parents own a home in the bay area, but I still think it's bad.

The entire prop 13 + zoning + property value situation is terrible, it's a total pyramid scheme: older generations get wealthy through wealth transfers from the younger generation from inflating property values. But it can only work once or twice before the property values are so comically high that even high income DINK couples can't afford to buy in.


DINK - Double Income, No Kids

Where are affordable homes anymore in any big city in the world now? A good apartment in Delhi, India, is 4-6 times the annual income of a high income DINK couple with salaries in excess of $40-50k each (a big amount in India)

I can't think of a single major economic center that has affordable housing now.


Tokyo has decently affordable rent relative to its size/level of prosperity. Compare it to NYC or the SF bay area and it's no contest.

Vienna can be cheap to live in because a large percentage of the housing is the social/public kind.


>>I can't think of a single major economic center that has affordable housing now.

That's what makes them major economic centers: real estate prices. The building, renovation, redevelopment, renting and investing of real estate ... that a massive part of the the modern economy. Think Vancouver makes its money on tourism or lumber? Fishing? It is all down to industry that is perpetually-increasing land values.


What makes them major economic centers is that a lot of useful work is done in them.

High real estate prices is just rent-collection by landlords.

Vancouver is an outlier that makes its money as a destination for laundered international money. The other economic centers actually produce, and export useful goods.


So support remote work and the disintermediation of geography from delivering value. Unless you’re twiddling atoms, no need to be somewhere specific in space time. And if you must twiddle atoms, pay a premium for demanding a specific piece of space time that is in high demand.

High rent collection is a symptom of high demand for an asset. If the land wasn’t valuable, the rent wouldn’t be high!

But the argument that “place X is an economic engine but should still be cheap” is wildly unrealistic.


Berlin? Maybe that’s going away though. Singapore for natives can also be affordable given that buying into housing is socialized.

People on HN have commented that Texas's tech hub is affordable.

Austin is decently affordable, but part of that is just that it's not as much of a tech hub as SF/SV, NYC, Seattle, or Boston.

If the current rate of growth in tech continues in Austin much longer your comment will soon be made untrue. It's been staggering to watch the growth.

Decently affordable is of course a matter of perspective. A small home which sells for $400k in Austin can be had for $150 in a Houston suburb.

Why is that bad? A family lived in the city for generations, and now due to the tech boom and a property bubble they should be forced to move?

It makes a hell of a lot more sense for FAANG to open offices somewhere else.


"My parents got here before" shouldn't entitle you to a lower tax rate than anyone else. This is feudalism.

Property taxes can be viewed as a form of feudalism. You never outright own your property, and if you're not productive enough (can't pay your property tax) your feudal lord (the government) will throw you out and find someone else who is more productive.

You can sensibly critique Proposition 13, but calling it "feudalism" is nonsense. It's the opposite, it's basically carving out a limited exemption in a partially feudal system for some citizens over others. Is it dumb? Sure, unequal? Definitely. But it's not "feudal", it's making the system less so.


My understanding of European feudalism (which is sparse, and comes from https://www.amazon.com/dp/B00XTAXZAU/ ) is that it is characterized by the following features:

- The owner of land owns it outright. If you own land, you don't pay taxes on it to anyone. It's yours.

- Ownership of land is inalienable. Your land is yours, and you can't sell it or otherwise transfer ownership (except through inheritance).

- Land generates revenue through the collection of dues from peasants who would like to work it.

- The feudal dues associated with a stretch of land are fixed by tradition and, like the ownership of the land, can't be changed. This is why European peasant reform movements emphasized stable measurement units so heavily -- since lords couldn't change the nominal amount of feudal dues, changes were actually implemented by messing with the size of the units those dues were measured in.

- The king has no tax authority. He gets his revenue from the land he owns, just like every other noble does.

It is a radically decentralized system, even for the rest of the world at the time, and it reflects the very low level of societal development in feudal Europe.

The US property tax system is nothing like this. The government owns ALL the land, and no one else can ever own any. The government has tax authority over the land and many other things.

The proposition 13 system does look like it's trying to move things in the direction of feudalism, as far as I can see. It's even trying to make sure land can't be sold, in that when you sell your land, all the tax benefits are lost.


> The US property tax system is nothing like this. The government owns ALL the land, and no one else can ever own any. The government has tax authority over the land and many other things.

Just a quibble, but, with the exception of federal lands, it's the individual states that levy property tax in their territory. Allodial title is what it's called when you have no obligations on the property. Nevada allowed limited allodial title, but it only lasts for the life of the owner. The way the implemented it was they computed an estimated total property tax and the owner would buy out the state's interest for his lifetime[1]. It actually provides additional privileges besides property tax exemption. Liens can't be enforced on an allodium, among other privileges.

[1] https://en.wikipedia.org/wiki/Allodial_title#Nevada


Property taxes explicitly work against speculation (you can’t just buy property and sit on it, since property tax acts to depreciate its value), but not rent seeking (indeed, it even pushes people to use their property productively so they can lay their property taxes).

It’s feudal because there are a number of people who own land and can extract an unusually high level of revenue from it purely because of who their parents were. That someone can own inherited land, collect rent, and pay a mere pittance in property tax purely because of who their parents were is as close to an aristocracy as we get in America.

It was never a requirement of feudalism that a land owner had 100% control over their land. Most feudal lords had a greater lord that expected tribute and support during war. In this metaphor land owners would be the lesser lords, not the king.


Do inheritance loopholes apply to rental properties?

I've seen the counterpoint sentiment in this thread described as "right to place". Some have a deep instinct to want to stay where they grew up and continue to build it. Maybe we should find a way to support that dream as well as the needs of people moving from outside to take advantage of the growth produced by their predecessors, instead of vilifying anybody who has something we want.

Otherwise you end up with an entirely transient population with little sense of ownership, responsibility, or community.


As someone from the bay area, if you think the setup there leads to 'natives' being able to stick around for the long term, I have some bad news: it's literally the exact opposite of that.

Out of my high school class, people who stuck around are actually somewhat uncommon. I mean, there's obviously still more there than any single other metro, but surprise surprise, most have moved somewhere much cheaper.

With saner density/zoning regulations, rents would be low enough to where more would have been able to stick around. Instead, very few have.

The current setup benefits homeowners who get in early. Their kids may well eventually benefit by inheriting that house, but in the meantime they've probably lived at least a few decades as adults elsewhere.


> Do inheritance loopholes apply to rental properties?

In California, it's all properties. Regardless of purpose. You can inherit dear old dad's office building and its tax assessment.


You do outright own it, though. It's just that outright ownership doesn't free you from all possible obligations or regulations.

You can own a dog, but that doesn't mean you're allowed to beat your dog. And if you beat your dog, the state may well come in and take it away (and also jail you).


Not quite. A working family living in a city for generations shouldn’t be displaced by taxes on unrealized gains. If the city wants to tax at current prices, they should guarantee that price for 5 years.

All you need is one or two of those generations to have more than one kid and the same dynamic that makes it unaffordable for everyone will make it unaffordable for at least one branch of that generational family.

So why can’t FAANG build offices in Detroit? In the Bay Area the lack of affordability comes from concentration of high paying jobs in a small area. They have the economic clout to push the area to build more, or expand in another part of the country.

>>A working family living in a city for generations shouldn’t be displaced by taxes on unrealized gains.

Why? What entitles someone to being in a certain location?


The right to live and to have property that was legally acquired. Otherwise is just a new form of feudalism.

It’s bad because the tax rate you pay on your property should not be tied to how long you’ve owned it.

Right now two different families living in identical properties in CA can be paying vastly different property taxes depending on when they bought (or inherited) their house. This is manifestly unfair.


Paying an increasing tax is not fair too. You don't get more services from higher tax, the city is just extorting more money because it can and because enough people think this is fair.

No, I think there should be some kind of accommodation for long-time homeowners who are actually cost burdened by increasing property taxes. But a regulation that narrow -- only residential, only primary residence, only long-term owners, only when substantially cost burdened by increased property tax rates -- would only overlap with the current Prop 13 by a small sliver. "Grandma might lose her home" only represents a tiny percentage of the beneficiaries of Prop 13.

> It makes a hell of a lot more sense for FAANG to open offices somewhere else.

Network/ecosystem effects are a natural part of economies and businesses. Why don't we leave it more up to businesses to decide where to hire?

Besides, the current setup is manifestly harmful to any non-homeowners and recent homeowners as it is. Why support a system that strains budgets, kicks out the poor and renters, hurts the environment, and forces long commutes?


There's actually a separate program to help low-income homeowners who are excessively burdened by increasing property taxes: https://www.sco.ca.gov/ardtax_prop_tax_postponement.html

It's even got the limits you suggest baked in - only residential, only primary residences, requires high equity ratio, etc.


Neat! This actually sounds too narrow though, especially the income limit (35k is comically low for coastal California homes).

I think a simpler solution would just be: you may choose to lock in a lower/earlier assessed property value for the purposes of property taxes, with the caveat that the state gets right of first refusal at the assessed value when you decide to sell.

Bam! One and done. Grants flexibility, too; each household can decide whether to treat their house as an investment or as a home, but not both.


I think it might even be easier - take the PTP program and relax a few constraints for eligibility (or at least link it to AMI) and you're done! The option to convert deferred taxes to liens is in there, and the interest rate is high enough to make people think twice about using this for financial engineering without being punitive.

At that point the state has the ability to get their money from any future sale without the extra complexity of having to own the property.


That’s an argument for controlling tax rate increases for one home owner, it’s not a great argument for why people should be able to pass on their tax rates to their children.

The cumulative effect of prop 13 has been to create a landed aristocracy in California cities who have millions of dollars in real estate and pay almost nothing on it purely because of who their parents were. This situation is even worse when the real estate is rentable, and the owners can collect 2019 rent and pay 1970 tax rates.


It's great for one child of that family each generation, not so good for anybody else.

It's like they want a new aristocracy. Which I suppose is the truth; people with the wealth and power would be happy with that.

I genuinely don't think that was the idea. Prop 13 was passed in an era when property values were increasingly rapidly and California was a fairly conservative place. The idea was also promoted by Howard Jarvis in an effort to choke state revenues and keep the state government small (oops).

Of course, it quickly became the new normal. Now getting rid of it is the third rail of California politics.


You touch upon a fundamental problem with the tax calculation. There is no reason for the city budget to increase by x% just because the supposed home values (could be a bubble) happen to increase by x%. It's not as if the other costs of running a government increased by x%. (in the long term there is a smaller increase due to salaries, but the city budget isn't normally spent buying up land)

So a real estate bubble hits, home owners are hurt, and the government gets used to what they think is the new normal. The government takes on wasteful obligations, hiring lots of people and failing to push back on pension demands. Once the bubble pops, the city budget is in deep trouble. Something must be cut. It isn't easy to lay off employees and cut back the pensions, so the city increases the tax rate.

Repeat that again with a new bubble, again and again, and the rates only go up. It's a ratchet effect, with rates going up but never down.

Voters chose a simplistic way to put a stop to this problem. Something was needed, but the chosen solution is pretty bad. The fact that people can't trade houses without seeing rate increases means that people commute too far, clogging up the roads. Newcomers also get hit, with cities imposing huge impact fees and generally discouraging housing because the housing doesn't pay for itself due to Prop 13.

What was really needed was a restriction on the total city budget. Instead of setting a tax rate and then calculating the budget, we could set the budget and then calculate the tax rate. Applying the restriction to the total city budget serves the necessary purpose of putting a stop to out-of-control spending.


I'm unconvinced that most cities are all that generous, with one glaring exception: pensions.

Even when they are generous, for current spending (money raised and spent in the same year) it doesn't seem like a long-term problem, because they can cut back later. There's even a sense in which spare capacity in good times makes it easier to find low-priority items to cut back on. If everything is already high-priority, what do you do?

But where the cost is locked in, far in the future, and variable, city governments are clearly not good at planning ahead. I'm in favor of generous retirement benefits, but using a 401k-like plan where all costs to the city are up front. Most newer businesses moved to that long ago.


Defined benefit plans like pensions aren't generous, its merely the workers negotiating with the employer to put money aside pre-tax from their pay and invest it.

This all goes sideways when these funds are mismanaged & underfunded, which organizations have an incentive to do as it can be a nice way to juice profits immediately.

Wage theft is shameful in any color, and what has happened to American Pensions is stealing earned wages from workers retirement.


I don't under how government pensions are stolen. If the funds are mismanaged, the taxpayer is responsible for making up the difference.

I think getting rid of it won’t be that hard. For corporations, just slowly increase property taxes to what they should be over 10 years. For families, let each couple only own one grandfathered property each, and when they pass away, bring the property taxes up to where they should be. That way you don’t actually price any people out of the homes they currently own (which is the whole emotional issue that nominally created prop 13 in the first place)

It's a good idea. I believe there's actually a prop on the next ballot to roll back prop 13 on corporate offices.

For my own part, I've found that people are also emotionally attached to the idea of being able to raise their own children in the family home. Anecdotally, people often have trouble with the idea that the retired teacher next door in their house is a multi-millionaire, leading to some people refusing to regard residences as meaningful property.


Why would non-people people get a benefit, but real flesh people not?

I'm afraid I don't understand your question. Can you clarify?

I'm going to assume it's a reference to my comment about corporate offices and Prop 13. The measure I referred to is one that will end Prop 13 protections on corporate offices. As a result, real flesh people will continue to benefit from Prop 13 and non-people people will not.


Ah, I misunderstood then. I thought the benefit would go to the companies, while the individual people would still suffer.

That's how it normally goes in this country, so you can probably understand why I was confused.


I can certainly see why you might think that!

As for the way it normally goes, both real flesh people and non-people people generally pay taxes on the value of their real property. Which strikes me as, on the whole, reasonably fair and equitable. California has decided that nobody should have to, provided they've had that real property long enough. The change going to voters would leave real flesh people exempt(-ish).

On the one hand, having corporations pay actual taxes will help state and local governments uncouple their budgets from the stock market some. On the other hand, there's already a problem where cities are incentivized to permit offices over housing, and this seems likely to make that worse...


Really? How?

Prop 13 was amended twice - Propositions 58 and 193. Those allowed Prop 13 tax assessments to be inherited with property to children and grandchildren.

There's some broader legal commentary, which I'm not properly equipped to evaluate, here: https://krasalaw.com/lawyer/2010/08/24/Estate-Planning/Maint...


I didn't know about Japanese property tax, a quick google shows there are a lot of taxes, 1.7% annually. 2% on registration. + some extras

https://resources.realestate.co.jp/buy/guide-to-japanese-rea...


There are huge deductions for your primary residence

This tax thing is an issue for people with multiple homes. Considering the set of people that concerns I wouldn’t cry too much over it


exactly, every country should implement high taxes for second homes.

What about the people owning homes as investments, or as part of their retirement plans? You can argue that a lake house would be taxed because it's lived in part of the year (weekends), but what if the owners put it on AirBnB after the children go off to university and the family isn't enjoying it together anymore?

Housing is a basic necessity, using it as an investment allocates scarce finite resources to you when you don't need it while consuming limited supply thus reducing the available stock for those that do.

The business of buying and selling houses on the flip isn't particularly bad (though it's often predatory and rent seekish) but hoarding property to either rent or just squat to take advantage of the appreciation said hoarding does to drive up prices is evil. Especially when you consider how the entire perverse and unsustainable economic model of endlessly and perpetually rising property values against inflation causes substantive suffering while governments will bend over to preserve it since the landlords are the wealthy interests they want to appease to stay in power.

There are much less amoral, much more productive, and much less predatory ways to grow wealth. Whenever anyone looks at residential property as an infinite profit machine it is a failure of the society to produce productive & positive investment options for that wealth.


There is loads of cheap housing in USA and Canada - just not in popular places. Anyone moaning about the price of real estate should check to make sure they aren't trying to live in one of the most desirable places to live on the planet.

How far should people be expected to commute from these less diserable locations to their place of employment?

Localities with an abundance of cheap housing tend to have significantly higher unemployment rates[1],

[1] https://research.stlouisfed.org/publications/employment-rese...


Let's include pressure to work remotely in the whole equation.

I see no reason why humanity must crowd trample each other in tiny metropolitan areas when there are so many affordable -- and likely more beautiful -- places to live in.

Have basic infrastructure in place, internet excluded, and the problem is solved.


The have been several studies that showed that cities foster innovation and living in larger cities leads to faster increase in income. It's also cheaper for society as a whole to provide good infrastructure in one place rather than spreading it out. Unfortunately we are currently hiding that cost and people living in cities are subsidizing the costs of roads and other infrastructure for people in low density areas.

I would seriously question those studies. You should probably add the increased stress and the lack of leisure time that make people mentally unhealthy.

I am also seriously not okay with the implication that the cities support all other areas. That's extremely questionable.

Lastly, don't forget there have been studies proving fat is bad and sugar is good. Never discount the vested interests that know how to convince people. Apparently you have been influenced by a study.

Not saying you shouldn't believe anything, but maintain a healthy skepticism, please.

I live in the only true big city in my country and truthfully, people are in general happier everywhere else in the country. At least they say so and sound like it.


> I see no reason why humanity must crowd trample each other in tiny metropolitan areas when there are so many affordable -- and likely more beautiful -- places to live in.

This is an incredibly disingenuous argument. You use "must" as if the opposing side is the one forcing people to live a certain way, but it's actually your side that pushes for strong regulations limiting population density even when people do want to live in a big city.

Nobody's suggesting banning living in rural areas or small towns. But regulations as they currently exist work to push people from living in big metros where the good jobs are. That's not the market, that's incumbents using government power to dictate lifestyles for their neighbors and potential immigrants.


Well to be fair, I have no "side" in this. I am saying that there are a lot of incentives for people to crowd in metropolitan areas.

As a resident of a country that only has one big city -- the capital -- I see this all the time: people just have no future elsewhere and come here even though they sacrifice quite a lot and the overall gain might not outpace all the negatives.

Not sure what's the way out, to be honest.


I mean, there's a reason the good jobs tend to come out of those big metro areas: bigger populations make for stronger ecosystem/network effects. If you push policies deflecting people elsewhere, you're not just spreading out the prosperity, you're also reducing it in total.

And I don't think big cities have to be bad to live in. Vienna gets extremely high livability marks despite being the one big city Austria has. I currently live in Munich, and though our yard here is very small compared to the US standard, having a couple of parks within a block and a half (+ other nearby green space) makes up for it, even with a kid.


Big cities don't have to be bad to live in... but they often are.

Sofia isn't anything special but it has quite beautiful neighborhoods which are of course quite expensive to live in.

Back yard? You only have that if you live in villages with like 2000 people. Our capital is so crowded that the real estate agents feel really proud to advertise 68m2 apartments with two small rooms and a tiny kitchen, it's that bad. Good views? Forget about it.

(I am considering moving out of Bulgaria to Vienna/Austria exactly by the way; but I'm for the moment too scared to do it.)


It still seems less than ideal to have people live in places that require long commutes or result in lower income jobs (likely meaning they could be more productive elsewhere) so that someone can accumulate investment properties in the more desirable areas? To me this seems like someone complaining that prices of vegetables and meat going up due to speculation and someone pointing out that rice and bread are still cheap.

Another way of putting this is: there's lots of cheap housing where there's only cheap jobs to match.

It's a pick your poison situation, and it doesn't have to be. Singapore and Vienna are good examples of public housing programs, Tokyo is a good example of the market providing reasonable rent relative to how desirable/big/rich the area is.


Cheap is a relative term. What does the affordability ratio (price vs local available incomes) look like compared to historical norms? Are these places cheap on that basis, or only when compared to the insane prices in desirable places?

This doesn't make sense. Housing that's being rented out is in use by renters. No property is being wasted. Taking properties off the rental market will drive rents up. What do you have against renters?

Vacant property is being wasted. Not too much of that, though.

Morally speaking, a housing market has much in common with a traffic jam or a crowded bus. Everyone takes up space, though some more than others. If you're living somewhere that housing is scarce, you're a small part of the problem, according to the space you take up. The only way to not be part of the problem is to move away.

It doesn't make sense to pick on some of the people in a crowd for making it crowded, assuming they're all taking a similar amount of space.


>>Housing is a basic necessity, using it as an investment allocates scarce finite resources to you when you don't need it while consuming limited supply thus reducing the available stock for those that do.

Using it as an investment doesn't deprive others from using it. Using it as an investment means renting the property out to earn investment income on it.

And investing leads to that scarce resource becoming less scarce, through construction and expansion of housing supply.

Capital leads to abundance. Combating capital investments in housing leads to more housing scarcity. That's exactly what zoning restrictions and rent control do, and why some places have housing scarcity.


This guy invested $30k in getting a (very) run-down home into decent shape. He had a tenant within a week of putting it up for rent:

https://www.youtube.com/watch?v=1Q8pf-Ad0w0

Not sure how his actions are evil or rent-seeking in any way.


They should invest their money elsewhere, like new enterprises, instead of homes as rent-seeking is a negative on society, not a productive activity.

You’re confusing “contract rent” (an amount paid on a recurring basis for the temporary use of goods, services, or property) with “economic rent” (an amount that is paid on top of the “natural” price due to a distortion in the market). Rent-seeking refers to the latter definition of rent.

Renting property is not rent-seeking. Wielding the power of local government to prevent new housing from being built is rent-seeking.


I think you're misusing the term "Rent Seeking". The important part of its definition is the manipulation of the social or political environment to gain financial advantage. It has nothing to do with collecting rent from a tenant.

An example of rent-seeking would be if I were a steel producer and I ask the government to impose a tariff on imported steel.


It is quite appropriate actually. Speculative property buying is very much about trying to capture wealth without creating any wealth.

C.f. also NIMBYism.


1. Speculative property buying provides liquidity to an otherwise exceptionally illiquid market.

2. You have literally just described the stock market.


1. given that it doesn't change the amount of property, how does it provide anything at all?

2. The stock market is exactly people trying to get rich without adding any value to the world.


Where do you expect tech workers to sell their RSUs?

...aaaaand suddenly all of those people currently renting have nowhere to live.

(I swear, the Kantian Categorical Imperative should be taught in high school just for its entertainment value.)


What if I require some leisure time to recharge so I can go back to work and be fully Productive? I need a lake house to go and relax at. The couple provides use of their lake house for my vacation.

That is higher risk and many, many people cannot accept it. They are in no position to lose everything on your dumb startup idea.

How can you state that rent seeking is a negative on society? How is it not just optimal capital allocation?

What is usually meant by rent-seeking is more akin to rent-extraction. Here rent doesn't mean the monthly payment (lease) but an 'economic rent'. That is an income which is guaranteed by some distorition of current market conditions. Most often by some kind of monopoly. Eg. rents for pharma industry because potential competitors are not allowed to enter the market due to industry regulation. This allows the current players extract the guaranteed rent - monopoly income.

production = rent + wages + interest

production - rent = wages + interest

when productivity grows but wages do not, that means the marginal contribution of any new worker is being entirely eaten by various forms of rent within the economy. Those who collect rent have no incentive to do anything but perpetuate their rent collection and most likely if they were to re invest their gains would probably reinvest them in either acquiring more rent or protecting their existing rent... which is why the government should be funded off of monopoly/pigovian taxes like the land value tax, or removing intellectual property deductions from the corp income tax, as opposed to income or consumption taxes - a philosophy known as georgism.


that's the literal definition of rent seeking.

https://en.wikipedia.org/wiki/Rent-seeking


Oh interesting that wasn’t a term I was actually familiar with. I thought we were just discussing the idea of purchasing property and renting it out.

> What about the people owning homes as investments, or as part of their retirement plans?

Housing as an investment does not benefit society.


A significant percentage of people are not financially stable enough to buy a home and pay a monthly mortgage on time for 15-30 years. But they are able to rent.

This is a good point. And that is why land taxation is preferred to property taxation.

Land ownership = people give you rights for exclusive use. So you pay them for the privilege

Property tax = another form of income or labor tax. Somebody put effort and energy into the building, proportion of which is taken away


1.7% annually does not seem particularly high. That's fairly typical in Chicago and it's suburbs. The 2% registration fee on a sale seems roughly equivalent to a transfer stamp, though that cost varies from town to town.

Taxes and loans are cheap in Japan. Anyone with even a modest income in the US should have no problem carrying two homes in Japan.

1.7% tax annually on property certainly doesn't seem cheap to me. I pretty much pay the same in interest on my mortgage in Norway.

That’s about on par with the top ten highest property tax states in the US (~1.5-1.7% annually).

Agreed, just most countries in the world don't have any property taxes, so was surprised to see Japan as having them.

edit: I do agree there are some common property taxes globally, but they're just a few hundred or at most 1-2k a year, not like 1-2% in some of the US states (and Japan) https://en.wikipedia.org/wiki/Property_tax


most advanced countries in the world DO have property taxes. Why do you think that's not the case?

Some places they are capped rather then percentages, I believe this is the case in the UK.

I think most developed countries do in some form

High rent delays child bearing. I wonder how much of the story of the falling japanese population can be attributed to that?

I'd be curious. Is there a correlation between rising living costs (comprised mostly of housing costs) and lower birth rates?

Japan is a social laboratory for the west and we see similar phenomena in the west these days.


I would say there is 100% correlation

+100. because rent is expensive, both parents need to work. Because both parents need to work they need to pay for daycare Costs.

Rent is expensive because both parents are working allowing price to go up.

Because parents wait longer. Their earnings are higher. Allowing daycare Costs to increase.

Tldr it's a vicious circle


Subsidized daycare can boost the economy: more people having kids, and more people on the workforce.

(Quebec/Canada has a mix of semi-state-owned daycare, which are great, but few, and subsidized private daycare, which aren't as good, but usually not that bad)


> Tldr it's a viscous circle

It's a syrupy, goopy circle?


But this is normal for some highly attractive areas. Looking at the U.S. as a whole, situation is pretty much normal - housing is very affordable.

If you take a sample of all houses across the US and look only at their prices, yes, there's lots of affordable housing.

But that picture ignores demographic shifts and jobs. If you look at the prices of houses relative to jobs available in the area, the picture is much worse.

In small towns and rural areas, there's lots of really cheap houses. In the town I grew up, you can find tolerable houses for sale for $100k. But there are no jobs there. Even at that low price, you're unlikely to be able to afford it at any sort of local wage.

Meanwhile, in the city where I live now, the median home price is $750,000. If you aren't in one of a shrinking number of vital industries like tech, that's also unaffordable. Over the years, I've watched friend after friend get priced out of the city.

The main problem I see is that jobs are moving much faster than physical infrastructure and housing can keep up with.


But if someone is priced out, someone else come in right? Definitely the population of these places does not fall, it rises. What's the problem if some people have to leave?

Certain segments of the economy get priced out of the area. If you want to go to a restaurant, there need to be places for the waiters and cooks to live. If you want someone to pick up the trash, there need to be homes for garbagemen. A hospital needs nurses, janitors, and receptionists as well as doctors.

This is changing as income stagnates and loans remain cheap and too easy to get.

Our whole fiscal policy is about printing money through home ownership. It’s creating all sorts of bad behaviors.


the allegory to this is that if you are successful in overcoming these odds, you get to be part of the problem!

Congratulations, no pat on the back, just vilification. The fingers now get pointed at you


Property taxes: even if you own your land, you don't actually own it.

You seem to be confusing the fee simple notion of land ownership that we have in the United States with allodial title which doesn't happen anywhere because it's a terrible way to run a society

https://en.m.wikipedia.org/wiki/Fee_simple

https://en.m.wikipedia.org/wiki/Allodial_title


I doubt there is confusion. Land ownership in the US requires taxes else some level of government claims ownership. This means you do not truly own the land, just merely rent it with a complex social contract.

I agree with some forms of property taxation, for the record, but think that single family owner-occupied homes should be tax free.


Income taxes: even if you own yourself and your labor, you actually don't.

Very short article. Unfortunate that it doesn’t mention that the Japanese view older homes as inferior to new homes. https://www.theguardian.com/cities/2017/nov/16/japan-reusabl...


They're not pulling the old home down and building new ones though, so your reason can't be the whole story.

They're moving to Tokyo.

Japans as a whole is losing population but Tokyo is increasing.


> Japans as a whole is losing population but Tokyo is increasing.

And even smaller cities are losing population much slower than their rural surroundings e.g. Wakayama mentioned in the article shrank by 10% (population wise) between the 2000 and 2015 census, but Wakayama-chi "only" shrank by 6% while rural Kushimoto-cho shrank by 23%, Susami-cho by 30%.


Exactly. We still have echo effects of the zombification of the economy since the 1990s as well. This series does a wonderful job explaining what is happening, through story and pictures. Whole towns are disappearing. Schools are opening and closing based on what grade the only child in the district is in. Go to the oldest post and work back if u have time. https://spikejapan.wordpress.com

I read this


The percentage for the American city of St. Louis is higher (around 19% last I heard). Here, take a look at what you can buy: https://www.stlouis-mo.gov/government/departments/sldc/real-...


Elsewhere:

> However, akiya owners are taxed more for empty plots of land than for having an empty property, according to real estate expert Toshihiko Yamamoto. This is a deterrent to razing a vacant home.

https://www.cnn.com/2018/12/05/asia/japan-vacant-akiya-ghost...

If true, this would go a long way toward explaining the 13% figure.


Weird. We have the opposite issue in the US; I've known several instances of people demolishing an intact structure because they didn't currently have a need for a barn.

There was an earlier post on here about municipalities in Japan offering abandoned houses for practically nothing. And I have to admit, ever since seeing that, the fantasy of building a retreat in "tropical" Kagoshima has been a constant in my mind ;)

From what I've been able to glean by reading, smaller cities and especially villages in Japan have vicious social ostracism, a lack of good jobs, and no remarkable educational institutions.

The sad part is really the social ostracism. Other factors can be fixed or bypassed, but culture is always the hardest bit.

True all of the above. Live in a rural city.

In 1995 I showed my co-workers in Japan the listing for my Grandma's house: a beautiful house on a double corner lot for $20k in rural Saskatchewan Canada. They were dumb founded. That a similar situation would occur in Japan twenty four years later seems unbelievable.

There is no free lunch, they take you the money through high taxes.

Something doesn’t add up. 20% vacancy in Wakayama but foreigners can’t buy houses - https://realestate.co.jp/en/forsale/wakayama

Most likely an issue with that website/service in particular. Other sites list more properties, but still a limited number. So your point about something not adding up may still be correct.

https://en.sekaiproperty.com/search/japan/wakayama

In my experience, when looking at real estate in Japan, going to a local agent is really the best bet.


This feels like a possible cascade failure waiting to happen across their economy and society.

Sounds like they need to encourage immigration to occupy those homes.

If their all be-all end-all goal is occupying those homes with whatever way...

They need to encourage immigration for several reasons, but they don't like immigrants.

What are the reasons? There is none in the article and there is no obvious reason to overpopulate a country with no natural resources.

Local governments have done something in that regard in recent times, but nowhere near enough.

Many small towns will give houses basically for free in exchange for people moving in and fixing them to stay long term :

https://www.rethinktokyo.com/free-houses-japan-countryside


Most of the old homes are actually not worth living in. Construction is so terrible you are practically living outside in terms of insulation. Earthquake hazards with huge shingle roofs unlike anything in US. Even newer construction that’s not even 10 years old is still shit compared to US standards. There is a lot that can be said about why but it would take up a full essay.

Immigrants can't afford it

wouldn't that be a sign of a healthy housing market? (e.g. liquidity)

if 99%-100% of homes were occupied then it would reach saturation (hard to buy/rent homes)


That's still high for a "healthy" level of vacancy, and it's also assuming those vacancies are in areas where people want to live. In reality, most of this housing stock is in smaller towns people are leaving while available housing in Tokyo is not exactly plentiful.

This, in combination with homeless people (or youth who still live at their parents while wanting to live on their own) is why I am pro squatting. If you don't use it, the land is up for other's use.

This article is one paragraph with an additional three paragraphs of fluff padding. Why on earth did we collectively upvote it?

So can I get an airbnb for super cheap there then?

It's surprising to me, since I have heard, that Japan is very, very densely populated.

...in three or four metropolitan areas. Image search for "japan population density": When oil is super expensive and public transportation is well-developed, property scarcity around public transit centers is the choke point.

Even in smaller cities, Japanese urban design usually makes for much higher levels of density than for equivalent population US cities.

I always wonder about these pot calling kettle black statistics. This is normal in the US too. Over 11% of US residential property sits unrented and unused.

https://www.cnbc.com/amp/id/41355854


Wow, 13% is a quite a lot.

It is. Flint, Michigan is at 16% vacancy, and I assume "vacancy" is a broader term than "abandoned".

I wonder if that would have anything to do with all the issues the city has though? According to wikipedia, GM went from providing 80 thousand, to 8 thousand jobs, high crime rates, they had a financial crisis, and of course the whole water contamination issues since 2014.

Seems likely that it's an outlier in this case.


Flint, MI is well known for this.

The intention was undoubtedly to say that Japan's abandonment rate has gotten so high that it's comparable to a disaster stricken city.


Ah I think you're right looks like I misread it haha.

I view it as a positive thing and wish it to happen in many countries.

Governments should stop thinking about population and gdp growth as a necessity. This is harmful when we're dealing with a planet with limited resources.


The problem isn't that they are shrinking, its the after-effects of shrinking and what it entails.

- The population shrinks but density in the cities still increases -> decreased land utilisation/abandoned villages. - Decreasing birth rate -> inverted population cone/less taxes and more high cost individuals (old people with health problems and no income)


You don't see population shrinkage as necessarily bad, well I don't think population growth as necessarily bad. Overall in the modern West theres been a lot more propaganda against the latter. Risky business really, because I get the feeling decline is going to be a lot harder to combat than growth.

Its not really a matter of size as it is of quality. I personally wouldn't mind a lot more genius rocket scientist supermodels being born. Our best chance to stave off extinction is not to bury our heads in the sand and hope we last on this one rock but to expand. Growth is not in itself the evil, limited resources is and that is what should be tackled. If humanity had limited itself to the size that some people think is sensible from the very beginning you wouldn't be enjoying the comforts like your room and fancy computer that you are now.


Japan's population tripled in the past 100 years, they have no natural resources and live on imported oil, minerals and food. The population density is very high if you consider the geography (many mountains). A slight decrease is not a bad thing in such circumstances.



Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: