Tokyo has rightly been getting some plaudits for housebuilding of late, and this post brings together some stats that illustrate just how impressive its record is.
First, some definitions and context. The statistics in this post are all for the Tokyo Metropolis area, also known as Tokyo Prefecture, with a population of around 13.5 million as of 2015. This is just part of the Greater Tokyo urban area, which holds around 37.8 million people, but for the purpose of this post when I say ‘Tokyo’ I mean the Metropolis/Prefecture.
The data in this post come from three online collections: the Tokyo Statistical Yearbook, the Japan Housing and Land Survey tables and Historical Statistics of Japan. As data sources these are all the more useful for being extremely old-fashioned: data is presented in tables using the same variable names and layouts going back decades, arranged on sites that are blessedly free of intrusive bells and whistles. Long may that continue, because when combined with an awesome commitment to publishing statistics in English, the end result is an amazingly accessible trove of historic data, probably more than is available for any other city I’ve looked at, including London.
It’s well known that Japan’s population is falling, but less so that Tokyo continues to grow, adding around 940,000 people (an extra 7.5%) between 2005 and 2015. That means Tokyo, like many big cities around the world, has the challenge of how to ensure there’s enough housing to go around. But unlike most big cities around the world, Tokyo is actually meeting that challenge.
Annual housebuilding statistics in Tokyo are expressed in terms of dwelling starts rather than completions. The chart below (compiled from various years of the Tokyo Statistical Yearbook) shows the trend in new dwelling starts in Tokyo between 1995 and 2015. Starts hit a peak of 192,000 in 2003 and a trough of 108,000 in 2009 but averaged 155,000 new homes over the two decades.
But that’s new supply in gross terms and everyone knows the Japanese demolish housing at a much higher rate than most countries, so what’s the net growth like? The chart below (from table 5 here) shows how the number of homes in Tokyo changed between 1963 and 2013 (based on the five-yearly Housing and Land Survey, the latest one of which was carried out in 2013). In just a fifty year period Tokyo’s housing stock nearly tripled in size, from 2.51 million homes in 1963 to 7.36 million in 2013.
Tokyo does demolish a lot of housing – between 2002 and 2011 there were 1.58 million starts but between 2003 and 2013 the stock grew by 1.17 million, so if we assume that it takes an average of two years from start to completion then it looks like 0.41 million homes were demolished in a decade, or about 7% of the 2003 stock. Put another way, roughly one home is demolished for every four new ones built. But the scale of construction still means that Tokyo’s housing stock is growing very fast – roughly 2% a year, about twice as fast as that of Paris, London or New York as the chart below (from the GLA’s Housing in London 2017 report) shows.
In 1963 there were 2.69 million households in Tokyo, and by 2013 this had grown to 6.51 million. So while the number of households grew quickly, the number of homes grew faster, and Tokyo went from having a crude ‘housing deficit’ in 1963 to a ‘surplus’ in 1973, and an even bigger surplus every year after that. By 2013 there were 849,000 more homes than households.
What strikes me about this chart is that at every point after 1968 Tokyo had (a) more than enough housing to go around (by this measure, anyway) and (b) more than it had ever had before. It is often said that by those criteria the UK should stop focusing on new trying to increase new supply and should instead focus on a better distribution of its existing housing. But Tokyo illustrates another strategy: keep building more and more housing, far past the point of mere sufficiency and into the realm of abundance.
The next chart shows the change in the type of dwellings in Tokyo between 1978 (the furthest back the data goes) and 2013. The fastest growth has been in apartments, particularly the tallest ones (six storeys or more). In 1978 there were 823,000 homes in Tokyo in apartment buildings of 3 or more storeys. 25 years later there were 3.6 million. Over the same period the number of houses grew slightly while the number of low-rise apartments fell. All of this is consistent with a pattern of housing growth achieved primarily through densification rather than sprawl.
That’s backed up by data on land use, which indicates that the acreage devoted to housing in Tokyo grew by around 1.5% between 2006 and 2011, whereas the number of homes grew by 9.2%. On average there are around 110 dwellings per hectare of residential land in Tokyo, compared to roughly 60 in London as of 2005 (the last time similar land use statistics were collected).
Really fast densification in an already built-up area like Tokyo can only be achieved through demolition and redevelopment, and we’ve already seen that around one existing home is demolished for every four new ones. The next chart shows how that trend has affected the age of profile of Tokyo’s housing stock over time. For obvious reasons there aren’t many dwellings in Tokyo dating from earlier than 1950, but even the stock of homes built in the 1950s and 1960s is dwindling fast: in 1998 there were 856,000 homes originally built between 1951 and 1970, but only 15 years later in 2013 this had fallen to 451,000. Replacing swathes of old housing with taller, denser new housing is what enables Tokyo to grow its housing stock so fast.
What does all this new construction mean for the amount of housing space available? Tokyo has a reputation for tiny apartments, and at 64m2 its average dwelling size is indeed smaller than what most Westerners would be used to, although it has risen over time.
The average size of new homes in Tokyo is very similar, at 65m2 (down from around 80m2 in the late 1990s).
But what these figures on average dwelling size don’t tell you is that the average Tokyo resident has far more space today than they did fifty years ago. The reason is that the average number of people in a Tokyo household has plummeted over this period, from 3.6 in 1963 to 2.0 in 2013. Of course, this could only happen because there was so much housing available for people to move into. When there isn’t enough housing then you get the opposite effect – of multiple unrelated people living together, and rising household sizes. London’s a good example of this.
When you combine the average floorspace per home and the average number of people per household you get the below trend in average floorspace per person (this shows the space in occupied homes only – if you took vacant homes into account it would be much higher). The amount of space per person saw a remarkable increase from 15m2 in 1963 to 32m2 in 2013. Londoners have a similar amount of space per person on average today (assuming similar methodologies for measuring floorspace – there’s not enough detail in the Tokyo stats to tell), but in stark contrast to Tokyo there has been little or no increase in London in around 20 years (according to this article, which in classic UK-housing-discourse style seems to suggest that it’s evidence against a housing shortage).
So how come Tokyo is so good at building housing? That’s a long story in itself, but this Robin Harding article in the FT is a good place to start, and if you want to dig into the academic literature try here, here and here. In short, Japan has a relatively simple and unambiguous zoning code, one which the national government has repeatedly adjusted in order to allow for more housing growth in Tokyo. That has been done in the face of opposition at neighbourhood and even city level, opposition that in countries which have devolved land use decisions to a local level would be enough to stop densification or at least divert it to poorer areas. What you might call the ‘supersidiarity’ of Japan’s approach to housing policy is therefore quite progressive, as well as being extremely effective in getting housing built.
James Gleeson 
Reblogged this on Eliot Pearson on WordPress.
Thanks for writing this; you’re making a lot of great data accessible to the casual reader.
Do you happen to have similar charts for median apartment prices (perhaps as % of income or something) over this time period (and comparisons against other large cities)?
Hi, thanks for the kind words. Unfortunately no, I don’t know of any good idea on affordability in Tokyo over this time period. There are some imperfect sources that might help:
– the Demographia survey https://t.co/bjthYRZ2Qe which I’m generally fairly sceptical of.
– There’s some data on household expenditure in the Tokyo Statistical Yearbook https://t.co/QomzWyhh79
– For house price trends you could try the Japan Real Estate Insitute https://t.co/Y8FRPTEqmR and for rents the Kantei institute https://t.co/n2cOfsyw5J (in Japanese – I used Google Translate)
– And the OECD have some figures here under Regional Statisticshttps://t.co/7x064dBFTg but without more details it’s hard to know what to make of them.
There was a time when Tokyo had such a price bubble that one single block of land was said to be “worth more than the entire State of California”. But in general, Tokyo’s entire property market has behaved very uniquely; most of the rest of the world has a “cycle” shorter than 20 years, but Japan seems to have had one long slow run-up that took decades, followed by a long slow deflation that is also taking decades.
I explain the unique and significant difference in institutional arrangements between Tokyo and the rest of the world, HERE:
View at Medium.com
I comment rarely, but this was a good article. thanks for writing it.
Having lived in Japan for over a decade (as well as in other major metropolises in North America and elsewhere East Asia) I do not think a discussion on Tokyo housing can be had without a parallel discussion on public transport investment, the unique situation about housing values in Japan, or the seismology of Japan.
Japan can build more housing because it has continually invested in public transportation (bus, rail) to allow access to ever farther/cheaper housing. San Francisco is a great example of both the problems in housing (they don’t allow much new housing) as well as a profound lack of investment in public transportation (SF is the city where Travis Kalanick started Uber because of the poor transportation situation. And Tokyo is famously a city where Uber is largely useless because of the ubiquity of public transport and the availability of taxis.) So housing policy has to be married to transport policy to be effective.
That buildings (not land) lose value over time in Japan is largely unique to Japan, at least in major metropolitan areas. If you look at other major metro areas that have some sort of geographic boundary (London, NYC, Shanghai, San Francisco, etc.) housing values largely only rise (barring occasional financial crashes.) Using Japanese examples to compare against other cities where housing largely only rises is problematic- you’re not comparing apples with apples. In practice, this means that housing goes to zero value over the length of the mortgage. Where else is this the case? I cannot think of any other major market where this is the case. The reason that Japan has such unique residential architecture is because of this too- if you don’t have to worry about the value of the structure over time, build what you want to live in, not what will be worth more later. Alastair Townsend’s 2013 piece in ArchDaily, “Why Japan is Crazy About Housing” goes into this in detail.
Note also that Japan is the most seismically active country in the world, so it is broadly safer to build more housing with fewer stories than for example Manhattan, where there are a lot of taller buildings, both because of the geographic limitations of the island as well as because there is no fear of earthquakes. The earthquakes also drive the value of buildings built decades earlier with little to no quake-safety tech down. This also pushes the drive for more building with newer quake-safety technology and quake-safer building codes. So most structures are torn down to meet ever changing, ever stricter building codes.
I do think the path that Japan has chosen for housing policy in the major metro areas has worked for Japan. It’s a country where most of the economic activity is in the major metros. Geographically, there’s not that much land for housing near those major metros (Japan is largely mountainous), and there are the policies to keep costs reasonable (which you explain effectively), which is why the housing size is smaller than in many other comparable major cities. There has been little to no investment in rural Japan since the economic crash of the 90s and no young people want to live/work in rural Japan. Spike Japan has a fascinating look at the failure of post-bubble rural Japan.
The really, really crucial thing about that “investment in public transport” is what I explain in the essay I linked from my comment earlier. In Japan, the ownership of the land around the stations is retained by the transit-operating enterprises themselves – and there are many such enterprises, not one single monopoly as is typical in most cities. Therefore these enterprises have always, from the outset over 100 years ago, competed between themselves, for tenants as the first priority; these tenants are then naturally “ridership”. This is what makes the pricing of floor space competitive, instead of monopolistic as is more usual in cities with the opposite kind of arrangements for mass transit.
That is, the land is all privately owned, separate to the transit operator; and the transit operator is heavily subsidized. Site owners interests are more about “gains” in whatever form they take, and this is often capital gains in site values. The site owners interests seldom align with the interest of “getting more ridership for the transit system”. The rents or floor space selling prices always sit at a profit-maximizing level for the site owners, not for the transit system. In fact the subsidies to transit, capitalize into higher site values without the site owners even bothering to redevelop. But in Japan, maximizing rental income by keeping it cheap and going for volume, provides another income stream to “subsidize” the transit, which receives very little public, taxpayer subsidies. Occasionally bailouts and nationalizations have occurred, but the norm is for private ownership and minimal subsidies from the taxpayer over the long term both past and future.
In Japanese cities, one can look at aerial photographs and tell where the transit routes run because there is more building “up” where the stations are. There is no institutional arrangements in western cities that achieve anything like this beneficial outcome. Public subsidies just pour down a black hole of operating losses and capital replacement that never pays a cent in return; and land owners gain a wealth transfer in the form of capture of some of the “value” (the part that is not just dead-weight loss) created by the subsidies.
It is extremely unfortunate that we persist in a lose-lose institutional arrangement and don’t understand the reasons for the world’s sole real success story in mass transit. By the way, in Hong Kong, the monopoly, public mass transit system also owns the land served by the transit, but because they are a monopoly, they do not try to “attract tenants” with competitive pricing, they follow whatever price gouge the land-scarce market is sustaining. The ridership is also pretty much captive; the extremely high population density makes private cars and even motorbikes non-viable as an option. So the government “keeps taxes low” on one hand, but on the other hand, they are the world’s most exploitive landlord, representing a very handy revenue stream that appears to be “not a tax”.
It is also a myth that Hong Kong’s extremely high density results in high co-location efficiencies; the rents are so high and hence the “pricing out” effect is so maximized, that monster commutes are the norm, not the exception. So the government monopoly is also literally gouging fare revenue for excessively lengthy travel on the transit system.
Came across this in 2021, so well after it was posted. Very interesting essay and the comments are spot on. What I would add to the explanation is the effect of “rent control” in Japan. While the ability of landlords to raise rents has been liberalized recently, for many years, the law governing rents made it difficult for landlords to raise rents unless the tenant moved out, and there were protections that made it difficult to push tenants out. The result of this regime was not a complete halt to building rentals, but a tendency to build only SMALL rentals. Rental apartments were often only 45 square meters, barely enough for one person. This was by design. They wanted tenants who would stay only for awhile (singles, not yet married) who would move out when they married or when they had children, allowing the landlords to raise rents periodically between tenants. The proliferation of small rentals meant there were a lot of affordable apartments, which sounds attractive to young people living in London or New York, but the absence of more variety in the rental market meant that residents of Tokyo faced a lot of pressure to either stay single (to avoid having to move) or have small families of just one child, if they could not afford to make the leap to owned (and larger) homes. In this essay, the shrinking household size is presented as evidence that lots of housing is available, but the flip side is that the shrinking household size is being shaped by a rental market that provided few larger (family-size) apartments.
It is true that lots of families of four do live in 60 square meter apartments (often condos). I lived in such an apartment with my family of five for awhile, and knew neighbors who were doing it long term. But this was not comfortable, and it has contributed to the fall in the total fertility rates in Tokyo to 1.0 children, far below the level in other parts of Japan where larger family-size homes are more affordable.