The “ghost town problem” in Japan and how the Government is trying to resolve it.

Japan is trying to fix its ‘ghost town’ problem by attracting people to settle in the rural areas by offering them homes at $500! However, this is not enough to solve the problem.

Look at the farmland in Wakayama, Japan. You will be shocked to know that more than 18% of homes are abandoned.In 2011, Uchiyama Seichi began re-evaluating his life. In March 2011, an earthquake called the Tohoku Earthquake struck the northeast coast of Japan and caused a tsunami. This led to the killing of more than 20,000 people. The death and destruction made Uchiyama consider his legacy.While in conversation with Insider, Uchiyama said, “I thought, what could I leave behind, and what example could I be to my children … if I can’t say I lived a fulfilling and enjoyable existence?”

In 2016, Uchiyama and his wife moved from Tokyo to the mountainous prefecture of Wakayama. This was 9 hours away from Tokyo towards the south. They made akiya-an abandoned home by the countryside their home and settled there.Uchiyama shared that the akiya looked almost haunted at first, but then they changed the flooring, repaired the roof, and made the renovation a family project. However, he did not share the price at which he bought akiya!You will be surprised to know that they spent a whopping one million yen (roughly $9,000) renovating the house, and it took them one year to do so. Now they are settled there and have their organic farm, cafe, and guest house out of the property.

Currently, the situation in Japan is that it has innumerable unoccupied homes all across the country’s rural areas. On the other hand, countries like US faced scarcity of homes in their country! As per Japan’s Housing and Land, survey was conducted every five years, around 8.49 million akiya recorded in 2018.
These abandoned homes in the rural areas of Japan are now known as “ghost villages,” which neither can be filled with people nor knocked down. The scenario is that there is almost 1 in every five houses that are empty in some areas. The government is trying its best by offering homes at $500 homes and even tax breaks to entice people of Japan to move from urban to rural areas like Wakayama. However, they have to go a long way, yet the people of Japan are not getting lured by these offers due to the cultural divide and the bureaucratic difficulties that come along when they move to rural areas.

Chris McMorran, an associate professor in Japanese studies at the National University of Singapore (NUS), gives a bleak outlook for rural communities even though COVID-19 caused many workers employed in big cities like Tokyo to work without physically living there. He also shared with Insider that the young generation is incredibly hesitant to move to rural areas due to lack of opportunities and because they do not prefer living in akiya.
“McMorran also shared that, “The fact that there are so many empty houses is a blight on the landscape, and a further deterrent, because people don’t want to live in a terminal village surrounded by ‘ghost houses.” He also pointed out that the dropping population of Japan due to a low birthrate since the 1970s is another cause. He further pointed out that this will get worse day by day because there are not enough people in Japan, so filling these akiya homes in rural areas is a concern that is likely to continue.The rugged southeastern coast of Japan witnesses a prefecture of 934,000 people (as of the 2018 census). Wakayama City is the biggest city in Japan and home to 40% of its total population. It is about an hour and 15 minutes away from Osaka.
This area is considered Japan’s spiritual heartland and its fruit kingdom. Tourists are frequent visitors due to hot springs, the giant pandas at the Wakayama City zoo, and the thousand-year-old Kumano Kodo Pilgrimage Route that passes through 43 miles of mountains, forests, and coastlines.Uchiyama loved the idea of pursuing agriculture. “I thought of Wakayama’s abundant nature, seas, mountains, and rivers. I guess I thought it would be a gorgeous place for kids to grow up,” said Uchiyama.

A photo of Uchiyama Seichi and his wife in front of their countryside home runs a farm and a cafe.
However, when Insider spoke to people about this story, they found that the prefecture is known first and foremost for something else. It is known for a fact how rural it is. Wakayama City is the only city with a population that exceeds 65,000 people.Yamamoto Reik, who shifted to Wakayama from New York, stated that “When driving, it is not uncommon for a troop of monkeys and badgers to cross the road even during the day. Now I’m used to such a scene, but at first, I was surprised.”
The animals are comfortable moving around, probably because there are not many humans everywhere in that area. The prefecture’s population has witnessed a steady decline since 1996.It was revealed by Richard Koo, chief economist at Japan’s Nomura Research Institute (NRI), to Insider that there was a lot of economic activity like factories in the Japanese countryside about 30 years ago. As a result, the Japanese yen kept rising till April 1995, which led to hollowing out the country and creating a rust belt area that he likened to Ohio’s.Tsutsui Kazunobu, professor of regional studies at Japan’s Tottori University, stated that the rural-urban migration trend goes back decades. From 1960 to 2015, the occupancy in rural areas witnessed a drop from 39 households per rural community in Japan to just 15.

According to the government’s official census conducted every five years, the 30 towns, cities, and villages of Wakayama’s have seen a decrease in population between 1995 and 2020. Also, the prefectures in Japan’s most significant cities (Tokyo, Yokohama, and Osaka) saw a population increase in this same period.
Japan now states the highest vacancy rates of the 37 countries surveyed by the Organization for Economic Co-operation and Development (OECD) in May. As a country, it has a 14% vacancy rate.Well, in rural areas, the vacancy rate is 16% and higher in some prefectures. Kochi, Kagoshima, and Tokushima displayed a vacancy rate of above 18% in the Housing and Land survey in 2018. Wakayama topped the list with a vacancy rate of 18.8% vacancy.

Since the 1970s, both the national and municipal governments have identified the imbalance between rural and urban Japan.Prime Minister Yoshihide Suga has promised to revive the rural areas of Japan and stimulate the rural economy in Japan.He believes that through tourism and agricultural reforms, we will be able to move people to rural areas, leading to reviving the rural areas, creating employment, and boosting Japan’s economy.
At the regional level, the government is trying to give the best offers to shift to rural areas in Japan. These offers include renovation of the homes and property tax rebates.They also develop akiya banks and websites that showcase the various akiya homes for sale at 50,000 yen ($455).

Inside of the Tokai farmhouse.The family in this property in Irokawa village. They spent 1.5 million yen ($12,500) to renovate it, and it took them eight months to do so.
They restored the house’s original structure, and they stated that the majority of the work involved turning the abandoned paddy fields around the house into fertile land to grow their crops.Now they grow tea plants, plums, and yuzu. They even keep chickens and are enjoying the peace there.

Furukawa Ryuji, the chief of the Wakayama prefectural planning department, mentioned that their main goal is to solve population decline, low birth rate, and an aging population and maintain vitality and vibrancy of our community and the larger region.
Furukawa Ryuji has noticed that homes in good condition tend to be sold first, and the listings have increased from 200 to 600 since inception. When you look through the akiya bank currently has about 110 properties listed that comprise dilapidated $800 home to a $45,000, multiple room property with attached farmland for farming.

Space to build
Furukawa stated that real estate agencies handle some listings, and some newcomers have inherited the property.Nomura Yuichi and his wife Seiko shifted from Okinawa to Seiko’s hometown of Wakayama in 2011. After five years, they moved to their inherited family home. They spent three million yen ($37,000) in renovating the shop and the apartment above it.The Nomura’s operate a bakery and sell custard buns and danishes now. Doing this was their dream!

Nomura Yuichi home with renovation in progress.

Nomura Yuichi and his wife in front of their bakery.we mentioned that many families like Nomura were able to start their small businesses after shifting.
When he was in his 50’s, Sakurai Yasunori saw a business opportunity in an abandoned building near his office in Wakayama. He invested one million yen ($12,100) in 2012 to renovate the akiya. He now rents it out to travelers for trekking to Kumano Kodo.
Hayashi Noriaki, a businessman, converted a Wakayama akiya into a movie-theater-cum-bookstore. He invested six million yen ($72,800) and completed it in four years.

Hayashi Noriaki turned movie-theater-cum-bookstore.
McMorran, the NUS professor, said that there is a resistance for people to move to rural areas like Wakayama. This is because of basic amenities like hospitals and daily item stores.

Yamamoto could not find work after shifting to Wakayama from NYC as remote working opportunities were not present. Further, even her husband couldn’t find work and thus moved back to Tokyo to get a job.Koo, an NRI economist, stated that people in Japan do like to have their own house.
In the US, people prefer purchasing old homes, renovate and make them their dream homes. But that is not the case with Japan; people here do not believe in DIY renovation culture, as mentioned by Douglas Southerland, the senior economist responsible for OECD monitoring of the Japanese economy.
The Building Standard Law in Japan has been amended five times to make the older buildings stronger to withstand an earthquake. However, most of the akiya homes date back to 1918 and thus not considered fragile to move in as a structure.Koo mentioned that a land that has nothing on it has a higher value than a pre-owned house because of the cost of pulling a place done.”

Iwade-shi, a city in Wakayama, photographed with a drone from the sky.Ideally, the best thing to do is break down the houses and build new ones, but the government cannot do that due to the prevailing strict property laws.Mc Morran stated that before 2015, the Japanese government did not have the right to contact the owner and ask them to renovate a dilapidated or abandoned home. However, many generations of people are attached to rural areas, and thus, touching their land is also not possible.
The akiya in Japan are homes in limbo, as described by Koo. This means that you cannot tell the owner to do the renovation, and neither can the government take ownership of it, so it just stays as it is. Further, Koo pointed out finding out to whom the house belongs is a difficult task, and so most of the time, the government gives up.

In addition to the economic, financial, and cultural barriers to entry, there is a social barrier to tackle, as pointed by Koo. Moreover, the rural society of Japan is very closed. They do not accept new people quickly. It takes them time to do so. Further, there is a lack of employment opportunities, and there is a presence of exclusionary attitude described by Koo.Wakayama is only a microcosm of the more enormous population shifts happening across Japan and around the world.
In Italy, homes are being sold for as low as $1 and even free! In the US, people are being offered cash rewards of $10,000 to people to move in rural parts.
The government of Japan is trying other ways, too, like taking over the houses where no one came to claim and then redevelop them.

The Tokai’s rice paddy fields.The good news is that due to the changes in work culture due to the Covid-19 Pandemic, people’s interest in Wakayama has increased. The trends that have emerged are Teleworking and side businesses, so living and working in an akiya is suited in these cases.However, as per Insider research with economists and academics, the akiya homes will not get filled fast. Further, the pandemic has harmed the tourism sector of Suga’s rural revitalization plan, as per Koo.

Mc Morran stated that there would be some winning prefectures on the way to revitalize, but there will be many losers.

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