Every time I see this I have to laugh. If you live in Tokyo, I'd love to hear your anecdotal experience.

I have stayed and visited japan for the last 35 years, and find all of the "Tokyo is so affordable and buildable" is hilarious. The breathless articles I read about it leave out fundamental aspects (the incredible density, the absolute destruction 70 years ago, the corruption [especially in Shinjuku], the size of the "livable apartments", the need to rebuild anything from before 1980 for earthquake safety, that youth population falling by half), and the fact that most people who can leave Tokyo to raise children do (even if it means commuting 2hrs each way every day on a train).

This just doesn't match anywhere in the US or frankly almost anywhere else in the world. I know 2 people who actually still live in Tokyo. One is a 28 year old single foreigner, and the other is stuck in a 100 year mortgage with their extended family. All the rest moved.

So why is the population of Tokyo steadily increasing while the population of Japan overall is decreasing? Is it all just foreigners explaining 2+% growth rate in recent years despite them making up less than 3% of the cities total population? Or are the people stuck in 100 year mortgages just have lots more kids than everybody else?

The pricing is set by the marginal housing. Marginal housing is older tiny apartments that would be considered deathtraps in the US or Europe. Those older 7 story buildings are torn down and replaced with 30+ story apartments (in less corrupt ways than in the past at densities that most other countries would consider too high) which are unaffordable to the people who are forced to leave and commute long distances to newer/safer, but similarly high density housing.

Because ALL of the jobs are in Tokyo (or Osaka, or Fukuoka). Note that Chiba city is growing faster than Tokyo and it's a suburb (same with Tsukuba)! Shin-Yokohama is getting too expensive.

Meanwhile in western countries the prices go up for no reason! That 30 year old house? It's worth double what it was 10 years ago! And now it's a 30 year old house instead of a 20 year old house. This is reality where I grew up. Most of my peers are priced out too. And I grew up out of the city centre...

And interest rates went from 20% in 1980 to 2% in 2021. Like fashion bags and NFTs they were financialized. The market can remain irrational longer than you can remain solvent. Seen China and the massive building there, but it didn't lower prices... they're higher than SF or NY!

It's not just housing. Look at bare land or abandoned buildings in CA. Those also grew by similar amounts or even more! Why develop it when it goes up in value? Why not own multiple empty homes when they "only" go up in price. Well, welcome to higher interest rates and likely a less deflationary world (deglobalization) with non-wage inflation that prevents the Fed put.

Interest rates don’t really matter to housing prices when supply and demand are at equilibrium. It may shift that equilibrium point but Japan has had the same exact interest rate policy as the US over the same time period but the price of a house in Japan hasn’t increased in nominal terms since 1990.

Everything you point out isn’t driven by interest rates but instead by artificial supply constraints on housing.

Well, actually Japan's interest rates haven't been falling they have been below the inflation rate (eg mostly below 1) for the last 30 years. That is literally the lost 3 decades since 89, when they had a huge housing crash.

https://tradingeconomics.com/japan/interest-rate

No housing is not a financial asset in Japan.

However, China where they have built massive quantities of housing, it is an exceptionally expensive financialized asset, because that is where lending went.

Housing isn’t a financial asset in Japan because you can build as much as you need so it doesn’t appreciate. Once supply caught up and overshot in china prices plummeted. It really is that simple.

I don't want to be too combative here, but Kurthr's comments are completely unrelated to the sentiment of most people in Japan. I don't know where they came from. I lived in Tokyo for years and still have an apartment there. You can work part time for minimum wage and still afford an apartment you can live in comfortably.

It's not going to be a US-style giant house with a green lawn, but it isn't some dystopian hole in the wall or giant share-house like non-wealthy San Francisco residents are stuck in.

You can fire up Netflix and watch some of "The Full-Time Wife Escapist" on there to see a normal small apartment in action. It's tiny by US standards, but people can live there comfortably.

> and the fact that most people who can leave Tokyo to raise children do (even if it means commuting 2hrs each way every day on a train).

Is that why the population is 14M - 34M in the metro? Bigger than every American city and about the size of all of Canada combined? They just can't get out to where it should by all accounts be cheaper? Is there a fence or something?

It takes too long to get there by train. Shinkansen is too expensive for daily commuting (for normal people). Two hours each way sleeping on a commuter train is about the limit of what people can tolerate. I love Tokyo and the rest of Japan. It's amazing, but if you put any other culture in Tokyo, it would be unlivable.

Agreed. Don't forget the massive implosion of the real estate market 30 years ago that turned a whole generation off of buying property and bankrupted vast swathes of the population.

Said "breathless articles" usually just grab some "rate of price increase" chart benchmarked to the most severe recession in recent decades and start celebrating just because Tokyo also has good housing policy. But in trying to advocate for good policy elsewhere, they just end up championing national recession, international stagnation, depressed wage growth, and more.

see charts & data etc here: https://www.conradbastable.com/essays/japans-housing-crisis-...

So Tokyo isn't affordable and livable because it's dense?

I lived in Japan so I understand where you're coming from...but the fact that "fleeters" are even a thing should tell you they are doing something right with housing prices. Can you imagine an American person in Seattle deciding to just work 30 hours at a conbini and being able to rent a studio?

A couple things:

1. Sure, Tokyo is dense and can be kinda soul crushing...but the option of having a roof even at incredibly low income is better than none.

2. Zoning to allow residential to be on top of business, and allowing smaller apartments and 2 very obvious things that make it literally "easier to build" in Japan than the US.

This isn't even just a Tokyo thing. When I lived in a pretty nice suburb in Okinawa a lot of my friends were paying like 300-400$ usd for rent, and I rarely ever saw homeless people. I live in Honolulu now and there's homeless everywhere and good luck finding any studio under $1300. There's a pretty obvious difference.

I agree that there's gotta be a place to live (that doesn't require a 1hr car drive or a multi-hour commute) to support city living at reasonable working wage and that is not possible in most rapidly urbanizing/gentrifying areas of the US (it is possible in Detroit or even NY to some extent).

That probably means something of a couple hundred ft2, not 1000. However, the reasons for homelessness in Hawaii vs Tokyo (I've actually seen some in the last 5 years!) has a lot to do with weather, social acceptance, and income from panhandling (which doesn't happen in Tokyo).

Also, a lot of the homeless I see outside (not the hidden homeless who have one or more jobs) in the US have problems that would lead to incarceration in Japan (drug use, untreated mental illness). At the same time I've known older people in Japan who would be in memory care in the US who were helped by the community to remain living in their houses in Japan. It is much safer in Japan, but at the same time any activity that makes it feel less safe is much more likely to be "policed".

As a side note, I'd love to read anything you've written about Tokyo, or Japan in general. Could you share blog posts or such, if there's any?

Otherwise, simone.brunozzi at gmail if you're willing to :)

Federalized zoning rules. Congress has the authority.

https://fred.stlouisfed.org/series/JPNCPIHOUAINMEI

One size fits all zoning regulations for rural Montana, Manhattan and the suburbs of Los Angeles.

Yes. It is your property, build it out as dense as you wish. There is not the demand in rural Montana to build out a 160 acre ranch with apartments. Just remove density restrictions and let people build to meet demand.

You're proposing removing zoning, parent is proposing federalized zoning.

Basically the same thing in this case. You can't have no zoning, but having a baseline bare minimum set at the federal level without carveouts for specific neighborhoods or districts is mostly just about superseding the authority of councils to mess around.

We need to use a state or federal authority to take the power of municipalities in the same way the builders remedy works.

What is substantively different about any of these places that require different zoning laws? Do you think someone is just going to build a mega skyscraper in rural Montana because they can?

I don't presume to know the needs of Montanans. My state is diverse enough that statewide zoning laws are obviously specifically crafted with a certain subset of the state in mind and are unworkable for different communities.

For instance, there are laws that prevent certain stores (alcohol sales, for example) from being within X miles of a school. There are cities where the central location where the central location of the town where all commerce happens and where the school is is less than a square mile.

Unless you're proposing legislating the removal or limiting of zoning on the federal level, it seems like an incredibly bad idea.

China has an enormous amount of housing. Their prices are still sky high

There's a huge cultural difference there though -- people don't trust stocks, bonds, or bank accounts. Housing is the only investment most people will consider.

There are old men who still remember their neighbors being dragged out of those houses, tried, and executed by Mao's kangaroo courts.

Most martial arts schools with ties to China have stories of expatriation or of practicing in the dark in basements.

All those houses bought in Vancouver aren't just about financial investments, they're also a potential bolt-hole if things get ugly again.

Also those houses are being bought with money being smuggled out of China. For all of the reasons that patio11 gives in https://www.bitsaboutmoney.com/archive/money-laundering-and-..., real estate is an excellent investment for money whose provenance you wish to be hard to discover.

This is a negative way to look at China's history.

As a Chinese-American, whose family and friends all profited greatly from China's rise, I do wonder, how much of that profit was just being lucky enough to support the "winning team," and how much blood was shed on the other side.

I guess the only true mindset is a neutral one.

We have a model for that in your birth country (American Civil War). But from my fractured knowledge of Chinese history, there's been a lot less backpedaling vis-a-vis the Civil War on ideological differences between the winning and losing side (and we mostly lament those as regression instead of progress).

In China, things have come back. People who escaped were invited back with promises of better treatment, even given platforms (eg, martial arts) but who knows what we Earthlings have lost from people who didn't. Biomechanics, biology, art, technology, philosophy...

Nor should they, cultural or not. Look how the government destroyed the Ant group recently. When they can unilaterally do that, how can you find a safe stock?

Land in China is all leased from the government, so there's no escaping government risk there without leaving the country

The Chinese situation is caused by government rather than by their culture. Chinese corporations are forced into inefficient state-mandated investments and provide meager rates of returns for shareholders. They get tons of shiny public infrastructure while savers are given nothing, and are not allowed to invest internationally. In other words, it is pure financial repression.

Sounds a lot like the US to me.

Housing in ghost cities doesn't count. Housing needs to be available where the jobs are.

I think it's time to reverse the equation: jobs have to be available where housing is!

In other words, we must learn how to improve the economy without turning the cities into antlers.

Why do you think that is?

I have an answer: there is nothing else to invest in for the average person.

When very few can purchase a luxury suit in a ghost city in china, the infra build costs were high, but the available buyer population is way fn low - its inverse to supply&demand when it comes to chinese real estate.

The buyers would have to fund ALL the infra to power, water, feed such ghost city homes, and where will they work?

I used to work with a guy in SF that had a consultancy that would bring chinese 'students' on tours of the US to various universities to have them pick where they wanted to go to school.

These were the children of chinese oligarchs - and they would land in SFO with luggage full of cash - and, not knowing how things worked in the US, would jusr bribe their way through every transaction at ~$10,000 a time...

The chinese oligarchs own more of america than you may know.