UCLA Housing Voice

Ep 72: Notes on Tokyo’s Housing, Land Use, and Urban Planning with Shane Phillips

• UCLA Lewis Center for Regional Policy Studies • Season 3 • Episode 14

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In this episode, Shane combines insights from a recent trip to Tokyo with official data on housing production, affordability, land use policy, and more.

Show notes:

Hello! This is the UCLA Housing Voice Podcast, and I'm your host, Shane Phillips.

This week, as promised, and only about five days late, I’m doing a solo episode based on my recent trip to Japan, spent mostly in Tokyo with a few days in Osaka. I’ve already said this many times in the six weeks since I got back to the states, but I went to Tokyo with very high expectations and it exceeded them in nearly every way. I got to see many things I’d only read about, and I experienced and learned many things I didn’t anticipate, or hadn’t even considered before.

I’ve had some trouble describing what it was about Tokyo that charmed me so much, in part because I can’t really point you to a specific feature or landmark or neighborhood that I saw and thought, “This is what people need to see, this is Tokyo.” What’s stayed with me is how all the little things came together, and their sheer abundance.

For me, the experience of Tokyo was defined by nothing so much as abundance. From the many large and small commercial districts that seem to all attract enough patrons to thrive, to the yokochou — streets that house scores of bars and restaurants as small as 50 square feet each, and fitting as few as 4 or 5 customers and a bartender — to the pencil-thin zakkyo buildings where shops and restaurants and schools and arcades and other public-facing businesses occupy not just the ground floor but the 3, 4, 8 stories above, each contributing to a profusion of advertising signs attached to each building, there’s just so much everywhere you go. And as much as there’s so much busyness, so many choices and variety, it’s also so easy to escape to a side street or park for a bit of quiet.

But all that said, Tokyo is a place like any other, with a people who are no more or less special than any other — though they’re unique, in the same way that every culture is unique. Tokyo, and Japan, and I think Asian cultures generally tend to be exoticized and essentialized in Western culture, and I want to avoid conveying something similar in my admiration of certain aspects of the city. We can celebrate people and places without putting them on a pedestal, or holding them apart as something alien. Like any other place, Tokyo can’t be duplicated. There’s too much history and geography and inertia for that to be possible. But also like any other place, it can be learned from, and we can apply those lessons elsewhere, taking and adapting what works for us and leaving what doesn’t.

As much as I enjoyed my time in Tokyo, and in places like Paris and Mexico City, and as much as the things they do well makes me frustrated about certain aspects of the US and our cityscapes, I also always come away with a greater appreciation for the things we do well — the things that draw people here from all over the world to work and raise families and become our neighbors. The goal here isn’t to replace our cities with cities from other places, as though that would be possible even if we tried. The goal is figuring out what other places do better than us and importing them as well as we can, adding their strengths to ours.

Part of why I find Tokyo so compelling is that for all its differences, a lot of how it operates feels very portable to a North American context. Among other things, economically we share a lot, as very market-oriented economies that also have relatively weak social safety nets. I’d love to see us spend much more on both supply and demand-side housing subsidies, but we’ll need to build a lot more homes whether that happens or not, and virtually every nation in the world gets most of their housing through market-based production. If and when those bigger social and economic changes come, we’re not going to regret having a denser, more diverse, abundant, and affordable housing stock to spend all those subsidies on.

In this episode I’ll be drawing on what I saw during my trip, but also a lot of what I’ve read and data I’ve crunched to get a better picture of Tokyo and its housing market and policies. I’ll be comparing it to the US at times, with a focus on Los Angeles as another large world city and the place I know best. This episode is not a comprehensive overview of Tokyo and doesn’t aspire to be, and as careful as I’ve tried to be, I’ll almost certainly make some mistakes. If I do, you’re welcome to tell me about it.

I know the basics of Japanese pronunciation, but have no real sense for where syllables are accented and emphasized, so on this point I will sound very much like the foreigner I am. You do not need to tell me about my pronunciation mistakes.

If you enjoy this episode and want to hear more like it, you can let me know at shanephillips@ucla.edu. The Housing Voice Podcast is a production of the UCLA Lewis Center for Regional Policy Studies, and on it we bring scholarly research and insights to a much wider audience, which we’ve now been doing for a little over three years. If you’re interested in supporting this work, we’d love to talk about how we can do more, and reach more people. And with that, let’s get to our conversation with… me.


TOKYO STATS

I’ll kick things off with some of the veeeery basics. As of 2023, Japan had an estimated population of 124 million people living on about 146,000 square miles of land. It’s just a bit smaller than California, which is 156,000 square miles and home to 39 million people.

Overall, Japan’s population density is about three times greater than California’s, but that doesn’t tell the whole story, because only about a third of Japan’s land mass is considered habitable. I don’t have data on the amount of habitable land in California, but comparing country to country, Japan’s ratio of population to habitable land is more than 20 times greater than ours in the US.

Zooming in, the Tokyo metro area, or Greater Tokyo, is home to 36.9 million people, making it the most populated metro area in the world. Greater Tokyo is made up of four prefectures, which I’ve seen described as something like states or provinces, but I feel like counties may be a more intuitive comparison, at least when looking at their physical size. By population, the largest of those prefectures is — you guessed it — Tokyo prefecture, with over 14 million people.

Tokyo prefecture is composed of 23 special wards, or districts, that are centrally located within Greater Tokyo, and another 39 ordinary municipalities to the west of the special wards. My wanderings around Tokyo were confined to the special ward areas, and even though I walked about 100 miles over my seven days there, I didn’t set foot in more than half of them, and I was only able to see a small part of most of those I did explore. When most people imagine Tokyo, I suspect they’re mainly thinking about Tokyo prefecture, and that’s most of what I’ll be talking about in this episode.

Physically, the 23 wards add up to around 240 square miles, which is 20% smaller than New York City and half the size of the City of Los Angeles. Greater Tokyo stretches out 5,200 square miles, which is a bit larger than Los Angeles County and a bit smaller than Puerto Rico or Connecticut.

Tokyo’s special wards are home to about 9.7 million people, with an average population density of 41,000 people per square mile. By way of comparison, Seoul, Barcelona, and Buenos Aires all have similar densities. Paris is a bit higher, at around 54,000 per square mile. Manhattan is over 70,000, but all of New York City minus Staten Island — sorry Staten Island — is a bit lower, with around 34,000 people per square mile. All these figures are for cities proper, by the way — just the cities themselves and not other jurisdictions or whole metro areas.

 

TRANSPORTATION

This is a podcast about housing, and I promise we’ll spend most of our time there. But before we do, these densities — and remember they’re averages, with more and less densely populated areas — these densities beg the question of how the heck everyone gets around. Like, how can you have a functioning city, where people are able to get where they need to go every day.

Greater Tokyo isn’t the densest place in existence, but combine the world’s largest population with among the world’s highest densities and it wouldn’t be surprising if the result was a fairly dysfunctional transportation network. Famously though, Tokyo manages pretty damn well.

To me, it didn’t feel anything like the claustrophobically dense city its sometimes portrayed as. Maybe that was just my experience, because among other things a lot of my travel was outside peak commuting hours, but I also think a lot of it comes down to the efficiency of the transportation system, including its heavy reliance on the two most space-efficient modes of travel: trains and walking. Let’s do a bit more comparison of Tokyo to New York to illustrate.

In New York, the MTA runs 250 miles of rail lines through 472 or 423 stations, depending how you count, but 423 seems to be the better figure for international comparisons. Including bus ridership, it served about 3.5 billion rides in 2019, which I’m choosing as a reference year because ridership today is still far below the pre-COVID peak.

Tokyo’s transit system is a bit harder to pin down because it has multiple private operators, and because of my own challenges researching this stuff without reading or speaking the language. That said, the highest ridership operators are Tokyo Metro, the Toei Subway, and the East Japan Railway Company, or JR East, especially their Yamanote and Chuuou Lines. Together, the two subway operators and these two JR East Lines add up to around 250 miles of rail and 340 stations, which is similar to New York’s MTA, and at least 6 billion riders annually — almost double the MTA.

That 6 billion figure does not include buses, which don’t seem to play as big a role in Tokyo as in transit-oriented North American cities, such as they are. By US standards Tokyo just doesn’t have as many roads where a bus would fit. More importantly, the 6 billion riders served by those three Tokyo operators miss a lot of commuter and other rail service, much of which reaches outside Tokyo prefecture. I picked those three sets of rail lines because I didn’t want to cherry-pick data and give Tokyo an unfair advantage, but if we wanted to compare the MTA to the Tokyo metro, Greater Tokyo has around 15 billion riders each year, about 4 times New York’s MTA.

I did a bit of digging to compare ridership changes in New York versus Tokyo following COVID-19, but Tokyo data was challenging. Ridership on the MTA was down about 35% between 2019 and 2022, and ridership on the Yamanote Line took a similar hit over those same years, but that may not be reflective of the broader system. Most of the 30 or 40 train rides I took during my trip were standing room only, but only a few were approaching 100% full.

So why does Tokyo get so much more ridership than New York despite similar system sizes? Part of this is probably just how I’m measuring.

But beyond that, there is a real difference between these places, I think there are a few things worth mentioning. One is the hundreds of miles of rail lines running out to the suburbs of Tokyo and other prefectures. These regional lines don’t have the same ridership, but they feed the high-ridership lines in the 23 wards. If those outer routes disappeared, Tokyo would lose the ridership on those lines and a lot of riders who use them to transfer to the Yamanote Line, Toei Subway, and other core routes.

Tokyo’s lines are mostly privately owned, and don’t have unified ownership, but they’re coordinated extremely well, including a single fare card you can use for most transit services, as well as convenience stores and such. That convenience is one fewer barrier of entry to using the system.

Service frequency is one of the most important determinants of ridership, and on this metric Tokyo blows every North American city out of the water. Take the Yamanote Loop Line for example, which at 21 miles, 30 stations, and upward of 4 million riders daily, probably has the most trips per mile of any rail line in Tokyo.

Service starts just before 5am, and by 6 a new train stops at each station, in both directions, every 5 minutes. From 7 to 10am it’s every 3 or 4 minutes, and headways remain under 6 minutes until 9pm. Looking at the timetable — also linked in the show notes — I counted 241 arrivals at each station in each direction daily, and only the first and second train, second and third, third and fourth, and 240th and 241st had headways over 10 minutes.

To be clear, I’m not trying to pick on New York here, because it’s by far the best, highest ridership transit service in the United States. If I’m criticizing New York’s MTA, and sure, I am, then all these criticisms go double or quadruple for every other US city. Looking at you, LA Metro.

The system is extraordinarily reliable, despite the fragmented ownership and operations, and the stations are very well maintained even if plenty are showing their age.

The stations are destinations in their own right, with shops and restaurants and services within short walking distance. I had what may have been the best ramen of my life at a restaurant in Tokyo Station, which is along the Yamanote Line and a hub for about a billion other rail lines.

And many if not all of the stations I visited had publicly accessible bathrooms. You really can’t downplay the value of knowing you’ll have somewhere to go if you need to while out and about. Bathrooms could also be found in parks and other public spaces all over the city, and I even managed to spot a few of the ones that appear in the movie Perfect Days, which came out last year and is absolutely worth your time. It’s the movie about cleaning public toilets in Tokyo that you never knew you needed.

One critique, which I’m not the first to make, is that a whole lot of Tokyo is difficult to navigate if you have a disability that affects your mobility, and I’d imagine especially if you use a wheelchair. Stations generally have escalators and elevators, but this didn’t seem to be the case universally, and beyond the stations many shops had extremely narrow aisles that could never fit a wheelchair. The US and its transit systems are also far from perfect on this score, but traveling around other countries with an eye toward accessibility definitely makes you appreciate the impact of the Americans with Disabilities Act.

One last thought about transportation before moving on to housing. Some listeners may be familiar with the argument that pedestrian overpasses are car infrastructure, not pedestrian infrastructure. These are the bridges where you take stairs or an elevator up, walk over a road on a bridge, and then come back down to street level. Anyone who’s ever been to the Strip in Las Vegas is very familiar with these. They’re putatively about pedestrian safety but they’re really about facilitating car traffic and keeping pedestrians the hell out of the way, while extending walking distances a ton. I think I first heard this concept from Joe Cortright at his blog, City Observatory.

While walking around Tokyo I realized the same is sort of true of sidewalks. Most of the side streets in the city – which is to say most of the streets in the city – don’t have sidewalks. It’s just asphalt from one side of the street to the other, often with narrow painted lanes on one or both sides, and sometimes a rail barrier, to indicate where you should walk. In the US, not having sidewalks is usually a sign of an unwalkable environment, but that’s not at all true in Tokyo.

Despite lacking sidewalks, these side streets are extremely pleasant and safe to walk on, because they’re narrow and cars can only navigate them very slowly. Sidewalks are needed on wider streets because cars might be going 35 or 45 miles per hour just a few feet away, so it’s really important to have clear rules about who goes where. Narrower streets, which might only be wide enough to fit a car and one or two people standing shoulder to shoulder, allow much more mixing. They essentially function like woonerfs, for those familiar with the Dutch term, though they’re much more cost-effective because there’s really no dedicated infrastructure.

I don’t know why exactly, but it struck me as very profound to realize that in truly walkable places sidewalks can be entirely dispensable, or even a detriment to walkability. Knowing how much it costs to dig up utilities whenever they need to be repaired, replaced, upgraded, or moved, and then rebuild the infrastructure on top, this strategy also seems like a great way to save tax dollars and spend them on other things, like a world-class transit system.

 

HOUSING

Okay, enough about transportation. As we move on to housing, I want to comment on something that many others have observed before me, which is how quiet so much of Tokyo is. Tokyo has noisy arterials and bustling corridors like anywhere else, but they make up a pretty small share of the city, and it’s very easy to find quiet spaces just about anywhere, even half a block from a 40-story tower in the middle of Ikebukuro or Shibuya. My friend Luke often says that cities aren’t noisy, cars are, and that really struck home during this trip. Take away cars and strolling through one of the densest cities on the planet can feel and sound like a literal walk in the park.

If you go to the show notes for this episode, the first link is to a Twitter thread with photos and observations during my trip, and the first tweet in that thread might be the coolest housing-related thing I saw while in Tokyo, and yes I realize how nerdy a statement that is. It’s a hazy photo from the 45th floor of the Tokyo Metropolitan Government building, looking over Shinjuku Chuo Park at a pocket neighborhood just to the west.

Pocket Tokyo is one of the six major cityscape archetypes described in the book Emergent Tokyo, published in 2022 and authored by Jorge AlamaZAN, Joe McReynolds, and Naoki Saito. They describe Pocket Tokyo as neighborhoods that appear, quote, “when intimate residential areas are ringed by larger, sturdier buildings around the major roadways on their periphery, that serve as both a barrier against fires and a neighborhood boundary,” unquote. Those larger buildings also serve as a soundblock, so that the noise of cars and trucks traveling along those major roadways doesn’t reach far into the interior neighborhood. Tokyo is unfortunately pretty light on parks and open space, but the quiet of the side streets offers its own form of respite from the busyness of the city.

I’m personally very critical of urban planning that concentrates all density and development on corridors in an effort to quote-unquote “protect” residential neighborhoods and appease NIMBY voters, but Tokyo’s approach is different in a few ways that I think are important.

One is that larger car-heavy corridors account for a much smaller share of the street network in Tokyo, so the perimeter of these arterial rings can be quite large, and most of the homes in the pocket neighborhood don’t spend all the time under the shade of towers. There are also a limited number of vehicle access points into and out of the pocket neighborhoods, internal roads are very narrow, and they’re not really part of the larger road network. This all means that even though many residents in these neighborhoods do own cars, they move through them very slowly and quietly, and no one’s driving through if their trip doesn’t start or end there.

Another feature is that the buildings along the perimeter have limited or no setbacks from one another, so they really do serve as soundblocks. Most important from my perspective is the internal neighborhoods are still quite dense and mixed use. They are mostly limited to three stories, but they include a mix of single-family and multifamily homes, as well as the ground-level shops and eateries and other commercial spaces. Single-family homes might be on lots smaller than a thousand square feet, with very limited setbacks from the street or neighboring buildings, high lot coverage, and streets that might be no more than 8 or 12 feet wide.

The result is a dramatically higher share of land used for housing rather than streets and yards. If a suburban neighborhood in the US allows one home per 5,000 square foot lot, which is a gross density of about 8 dwellings per acre, the net density after accounting for roads might be 4 or 5 units per acre. Even if every home in these Tokyo pocket neighborhoods was a single-family detached house, the density might exceed 25 or 30 units per acre. And every home isn’t a single-family detached house. These low-rise neighborhoods can easily reach densities of 20 or 30 thousand people per square mile. Birdsong is the loudest thing you’ll hear for much of your time walking through them.

 

HOUSING PRODUCTION

Onward, to data. As a starting point, data from the 2023 Housing and Land Survey, or HLS, just started coming out at the end of April, and it reports 8.2 million dwellings and 7 million, 231 thousand total households in Tokyo prefecture. Among the occupied units, 1.9 million are detached houses and nearly 5.2 million are multifamily homes, about 89% in concrete or steel structured buildings and the rest built from wood. The remaining 12% are vacant, and three quarters of those vacant units are reported as for rent or for sale – mostly rent.

Data on tenure comes from the previous HLS, in 2018, and it shows that 45% of Tokyo households own their home while the rest rent. 81% of rentals are privately owned, with the rest divided between rentals owned by the local government, the Urban Renaissance Agency, or a public corporation, and houses that are owned or rented by companies, private organizations, or the government and issued to their employees. That remaining fifth of the rental market is something I’d love to delve into some time in the future, hopefully with a real expert on the subject, but for today I’ll just have to leave it at the fact that these units exist, and we’ll move on from there.

On homebuilding I’m using HLS data on the housing stock broken down by year built, which is also only updated through 2018. In that data we see that Tokyo prefecture built about 116,000 units per year from 2013 to 2018, for an 1.8% annual production rate. Adjusting for the number of existing homes, Tokyo prefecture built four or five times more housing than Los Angeles and New York over those five years. It managed this despite already being significantly denser than either.

Now, that’s not really the whole story. As we talked about with Jiro Yoshida in episode 16, the culture around building, depreciating, and buying and selling homes in Japan is very different from most nations. Homes are treated much more like the depreciating asset they are, and many Japanese households rebuild their homes after they reach around 30 years old.

I feel like location-specific terminology can tell you a lot about the unique characteristics of a place. In Canada they have something called purpose-built rental housing, because building apartments there is so rare compared to condo construction. In Tokyo housing data, you regularly see the term “used housing.” In the US we just call “housing,” because here used homes account for more than 80% of housing transactions in a given year. The same is true of various Western European countries, give or take. In Japan, at least as of 2012, used homes accounted for less than a third of transactions.

As I said, total production in Tokyo prefecture was about 116,000 units per year from 2013 to 2018, but when we account for demolitions, and look at 2013 to 2023, this falls to about 67,000 units per year, or 1.2% annual growth. That’s still double the equivalent figures for California and the city of Los Angeles, which are around 0.6%.

A lot of these demolitions are just single-family detached houses being torn down and rebuilt. Between 2013 and 2018 there were about 160,000 detached houses built in Tokyo prefecture, but the overall stock of them increased by only 23,600, which implies as much as 85% were rebuilds and not additional stock. In reality the share that were rebuilds is certainly less than that, since some would have been replaced by denser multifamily buildings.

Speaking of which, 446,000 multifamily dwellings were built in Tokyo prefecture from 2013 to 2018, adding 352,000 net new units. In that case there was about 1 multifamily unit demolished for every 5 multifamily units added.

There are good and bad things about this approach, though on balance I’d say it’s more good than bad. Among other benefits, Japan is incredibly seismically active, and regular rebuilds allow residents to update their homes to modern building codes as those codes evolve and improve, which they're always doing. Newer homes are safer homes, both from earthquakes and fires.

As of 2018, 70 to 80 percent of homes were built 1981 or later, which according to Professor Yoshida was the year of a particularly significant update to Japan’s building code. Again, 70 to 80 percent of homes were built after 1980. In LA that figure is 25%, and in New York City it’s 17%.

Tokyo has also been replacing wooden multifamily buildings with concrete and steel ones, which are much safer. Between 2013 and 2023, the stock of concrete and steel multifamily buildings grew by 688,000 units, a nearly 18% increase over 10 years. The stock of wooden apartment buildings actually shrank by an estimated 900 units.

This constant rebuilding also allows for larger homes, at least in theory, though rental homes in Tokyo have only grown by about 10% on average since the 1990s, and owner-occupied homes not at all. In 2018 the average rental in Tokyo was around 470 square feet and the average owner-occupied home just about 1000.

What really has improved in Japan is in space per person. In 1968, Japanese people had just shy of 100 square feet of living space per person. Quarters were really, really cramped coming out of World War 2. That number has steadily grown in the decades since, reaching 250 square feet in 2018, a 150% increase over 50 years. This has more to do with shrinking household sizes than changes to the housing stock, but I’ll get to that later.

An obvious downside of rebuilding homes every 30ish years is that it’s wasteful. Among other things, producing building materials demands a lot of energy and produces a lot of greenhouse gas emissions that probably could be avoided with a greater emphasis on renovations and rehabilitations.

I don’t feel I can be too critical on this point, especially coming from the US. At least within their cities, Japanese people’s lives are vastly less carbon and energy-intensive than ours on this side of the Pacific. Even just on the building side, Japanese residents may produce more building-related emissions than they would if they rebuilt homes less frequently, but their homes are also much smaller, which offsets those impacts to some extent.

Those smaller homes require less energy to heat and cool, and in terms of lifestyle, people in Tokyo, Osaka, and other urban parts of Japan are far, far less car dependent. Their transport-related emissions are vanishingly small, whereas here in California transportation makes up the largest share of our greenhouse gas emissions – 39% in 2021, with the next closest sector being industrial at 22%. In Japan transportation accounts for 19% of a much smaller total amount of emissions, per capita, and you can bet that a disproportionately small share comes from Tokyo.

I’m jumping in here after the original recording to add something I forgot to mention, which is that this trend of demolishing and rebuilding homes every 30 years or so may be on the decline. As the quality of homes has improved, driven in part by stricter national standards, I heard and read from a few different sources that many homes being built in Japan today have expected lifespans of around 60 years, which is double what they’ve been in the past. That’s a big change, starting to tackle one of the more substantive critiques of the country’s housing market.

 

James Gleason, a listener from London who has also written about Tokyo housing production and policy, reached out a few weeks ago to share a bit of context on single-family housing construction specifically, and how Japan has created a ‘mass customised’ self-commissioned housebuilding market that is very heavily focused on quality and customer service. He pointed me to a 2001 report that was commissioned to research and compare homebuilding practices in Japan and the UK, and it’s definitely worth taking a look at if the subject interests you. Check the show notes for a link.

One thing that stood out to me in the report is the observation that geographic mobility compared to the UK, and I imagine the US, with land more likely to stay in families for multiple generations. The causal arrow probably points both ways here, with a cultural norm of scrapping and rebuilding homes making it easier to stay in place as your family’s needs change, and a norm of staying in place or retaining ownership of land motivating the development of the homebuilding market we see in Japan today

A while back we spoke with Peter Ganong about how geographic mobility has been declining in the US, and how that’s driven in large part by declining affordability in our most productive metro areas. As I’ll be getting to shortly, Tokyo has managed to remain much more affordable, with a vastly more diverse array of housing options in all kinds of communities, and so I wonder if they’ve done a better job sustaining or even increasing household mobility in the more than 20 years since that report came out. Question for another time.

Another resource I’ll point listeners to is Brian Potter’s Substack, Construction Physics. He has at least two posts on Japanese homebuilding, one about Toyota’s prefab homebuilding division, and another about on-site automated skyscraper-building factories. Giant robots, basically. Neither of these efforts have delivered on their promise, but they’re a fascinating look into efforts to increase construction productivity, which has remained stubbornly flat across the world even as other sectors have raced ahead. Both of those articles are also in the show notes.

At times it felt like there was construction going on everywhere I went, though of course only a tiny of share of land is ever being redeveloped at any given time.

I noticed that many projects, at least the bigger ones I saw, had decibel meters visible to the public at the borders of their work sites. I don’t know if the meters logged violations, like times when a work site exceeds a certain noise level briefly, or for a sustained period of time, or if this is just for the benefit of passersby. Regardless, it signified to me a more practical approach to mitigating the very real annoyances of construction.

Instead of fighting over whether to build more housing because of construction impacts, when we know without a doubt that more housing is needed, let’s agree to address the construction impacts directly. Rather than prohibiting all commercial uses in residential areas because of potential noise or odors from certain kinds of businesses, regulate noise and odors directly so we can enjoy the benefits of shops and restaurants within walking distance. Instead of preventing redevelopment of older housing because it might still be affordable and might have at-risk tenants living in it, figure out if it actually is affordable, and does have at-risk tenants, and protect them if so – but otherwise let the project proceed without delay. In other words, regulate the impact, not the proxy for that impact.

This may have just been a gimmick, but I also saw a decibel meter in a third or fourth floor bar in Roppongi, in part of the neighborhood with a lot of residential and commercial uses mixed together, so this may not just be a construction noise thing. But then again, there was some very loud karaoke-ing going on in that bar, on I think a Tuesday or Wednesday night, so I can’t imagine the meter was having much effect. Maybe the building was just well-insulated.

 

When people speak positively of Tokyo’s housing and land use policy, its housing abundance, and its affordability, someone always chimes in to point out that Japan’s population is falling. This is true, and it’s offered up as an explanation — or the explanation — for why Japan’s stayed relatively affordable. It’s not because Tokyo builds a lot of homes, the thinking goes, but because demand is shrinking along with the population.

There’s probably some truth to this, but not much. Japan’s population is shrinking — it fell from about 127.1 million in 2015 to 124.4 million in 2023 — but Tokyo’s population is not. Greater Tokyo added 770,000 people over that same 8-year period, about three-quarters of which was in Tokyo prefecture. Greater Tokyo’s population increased by about 2.1%, and while that’s by no means rapid growth, it’s more than 10 times faster than the measly 0.16% population growth we saw in California over those same years. Tokyo prefecture, the center of Greater Tokyo, grew 4.2%, more than 25 times faster than California. The city of Los Angeles shrank by almost 3% — or a little over 100,000 people.

Japanese household sizes have also been shrinking pretty dramatically over the past few decades, and shrinking households require homebuilding above and beyond what’s required to accommodate a growing population. Between 1993 and 2018, the average household size in Tokyo prefecture fell by almost 20%, from about 2.44 to 1.98. Compare that again to the City of Los Angeles, where household sizes slightly increased between 1990 and 2020, from 2.68 to 2.7.

The median age in Japan is 49 years old, which is 10 years more than the US, so in some ways this is a look into the future as our society ages. In 2018, 47% of Tokyo prefecture households were just one person, up from 36% in 1993. Over roughly that same period in the US, the share of one-person households grew much far more slowly, from about 25% to 28%. Much of the US housing stock is far too large for one person, especially many people in their 70s or 80s or older, but we can expect that as people get wealthier and live longer the demand for living alone will keep increasing, and without more homes, and specifically more small single-story or elevator accessible homes, that’s going to put even more pressure on the housing market

 

AFFORDABILITY

Okay, let’s move on to affordability. Building homes has plenty of benefits, including improving the housing stock, bringing new people and amenities and other benefits of density, as well as producing jobs and tax revenues. But I’m guessing that for the listeners of this show, affordability comes first — that’s certainly true for me. I don’t care about building homes to see the housing stock number go up, except insofar as that makes it more likely to see the rent and housing price number go down.

On this, Tokyo delivers. Looking again at the Housing and Land Survey, in 2003 the monthly rent for a unit in a wooden apartment building was 67,000 yen, or about $610 dollars. Just a note here that the exchange rate between US dollars and Japanese yen is bonkers right now — as I write this, one dollar is worth 157 yen. But the typical exchange rate prior to 2022 was around 100 to 110 yen per dollar, so I’m gonna just use an exchange rate of 110 yen per dollar from here on out. This increases prices compared to the what I’d be sharing here if I used the current exchange rate, but using a higher rate would be dishonest in my view.

So, $610 for a unit in a wooden apartment building in 2003. How much had it increased by 2018? About 3.5%, to $630. I couldn’t figure out if the 2003 number was adjusted for inflation, but if it was, then rent went up 3.5% on average. If it’s wasn’t, then rent went down about three quarters of a percentage point, because Japan experienced a total inflation rate of 4.24% over those 15 years. Either way, 3.5% up or .75% down, pretty damn good.

Things look better if we look at rent per square foot instead of per dwelling unit. Because rents were basically flat from 2003 to 2018 but dwellings got somewhat larger on average, rent per square foot fell by about 11.5%.

This reminds me of a study I shared on Twitter a few years ago, titled “Housing rent rigidity under downward pressure: Unit-level longitudinal evidence from Tokyo,” which found that sitting tenants actually pay a slight premium above market rate. This “rigidity under downward pressure” means that landlords are less likely to lower rents for tenants who’ve lived in their units a long time, probably because the difference is pretty marginal and moving is a hassle. But because landlords have to be more sensitive to the market when leasing to new tenants, rents in that market adjust downward more quickly.

Another side note, and something I didn’t know before doing this research: In Japan the standard unit of area measurement isn’t the square meter, and it’s certainly not square feet. It’s the tatami mat, and specifically the traditional tatami mat from Nagoya, Japan, the standard size of which differs slightly from those from Tokyo or Kyoto. The nagoya tatami is equal to 1.653 square meters, or 17.79 square feet. Neat.

Rent in concrete and steel multifamily buildings is higher, presumably because they’re both safer and newer on average. That said, rents are still quite low. In 2003, typical rent in one of these units in Tokyo prefecture was $815. By 2018 it had increased 2.3%, to $833.

I need to give the skeptics their due here and note that yes, these rents are low, but they’re low in large part because the units are small. In 2018, rents in non-wooden apartments in Tokyo prefecture were around 6,000 yen per tatami mat, or a little over $3 per square foot. Rent per square foot tends to fall as unit sizes increase, but if you applied that rate to a 1,000 square foot unit it’d cost $3,000 per month, which even in the US is very expensive for most parts of the country, and incomes are lower in Japan.

But the reality is that you don’t apply that price per square foot to larger units, and rental units that large just aren’t that common in Tokyo in any case. As with dense cities across the world, people exchange smaller living spaces for access to a whole world of spaces and amenities and other people, just outside their door. People don’t pay rent per square foot, they just pay rent.

Also similar to other dense cities around the world, Tokyo residents have a bit more money laying around for housing because they spend so little on transportation. According to an excerpt from Daniel Knowles’ recent book, Carmageddon, only about 12% of trips in Tokyo are made by private car, and Tokyo residents don’t own a car – there are only about 0.32 cars per household. A monthly transit pass will cost you a bare fraction of the cost of buying, maintaining, operating, and parking a car, and that’s especially true in Japan, where you can’t even get your vehicle registered without proof that you have an off-street parking space to store it in.

The Center for Neighborhood Technology has a useful tool for exploring the mix of typical housing and transportation costs for neighborhoods all over the US, which is linked to in the show notes. Usually, although housing costs account for a larger share of household income in denser urban areas, transportation costs are often much lower.

I’m not going to get into the cost of buying a home in Japan because frankly it’s just a more difficult thing to research and I’m less confident in the data I came across, but many people own their homes in Japan and in Tokyo so I will make just one point. One of the most common ways of comparing housing affordability across countries is the median price to income ratio. Divide the median home price by the median income and there you have it. On this measure Japan does very poorly, but this is partly explained by its very low inflation.

Inflation has crept up in the last few years, but from 2000 to 2020 the cumulative inflation rate was under 3%, barely more than 0.1% annually. As you might imagine, mortgage rates have also been extraordinarily low, with a mortgage product called Flat35 hovering at around 1.5% interest for many years. A mortgage with that fixed interest rate, over 35 years, costs about 30% less per month than a 3% loan with a term of 30 years, like you might have found in the US in 2021 or 2022. When you account for that, Tokyo’s price to income ratio 9 to 10 is functionally more like 6 to 7, putting it on par with places like Denver and Austin rather than San Francisco and New York. LA’s is 12, which is the highest among the 20 largest US cities.


POLICY 

As I start to wrap this up, I’ll spend some time on policy and how Tokyo achieves this level of production and affordability.

I want to touch on tenant protections very briefly because it came up in our conversation with Jiro, but we didn’t get into much detail. It’s tough to find much info on this in English, but I found an article from 2004 by Shinichiro Iwata and Hisaki Yamaga that provided some useful background. They write that since the year 2000, landlords generally aren’t allowed to refuse a lease renewal if a tenant wants to renew it, which is akin to just cause or good cause eviction protections in many US cities.

In part to keep landlords from evading the intent of the tenancy control law, Japan also has a rent control law. Without that landlords could just raise rents beyond market rate and force the tenant to leave. The law seems to have evolved over time based on judicial precedent, and it means that when a tenant is renewing their lease, the landlord can’t increase the rent beyond that of comparable units that tenants have moved into more recently. I don’t really know anything about how that kind of rent control policy works in practice, but I know it’s not an uncommon approach and the authors note that similar policies exist in Canada, Sweden, France, and Germany among other places, and even in parts of the US though I’m not sure where.

Japan’s rent control has a vacancy decontrol element, meaning that landlords when a new household is moving in they can set the rent wherever they like – or really, at whatever level they can find a tenant willing to pay. Tenants intending to stay in a unit for many years will sometimes pay more to get their foot in the door, knowing that it’ll be tough to raise their rent in the future, and I think that dynamic might help explain the earlier study I mentioned, where incumbent tenants tend to pay a bit more than market-rate.

The last thing I’ll say about rent control here is something I say in my book. It’s a policy that can reduce housing production and rental housing supply, and therefore worsen affordability in the aggregate, yes. It’s had that effect in New York City in the past, and in Mumbai, as we discussed in our episode with Richard Green and Sahil Gandhi, and in other cities too. But Tokyo also shows that strong pro-housing, supply-oriented policies can outweigh whatever negative consequences might arise from rent control. Housing abundance and tenant protections aren’t mutually exclusive – not if supply policies are robust and the tenant protections are carefully designed. 

Another thing that came up in our conversation with Jiro, which I haven’t stopped thinking about in the two and a half years since, is Japan’s zoning code. And yes, I mean Japan’s code and not Tokyo’s, because the whole country uses the same zoning code, and it has just 12 kinds of districts.

Compare that to the city of Los Angeles, which has scores of different zoning districts, and which turn into hundreds or thousands of permutations when you account for different height districts, overlays, specific plans, Q conditions, D limitations, and all the other things that don’t follow any consistent logic. Each of the other 87 cities in LA County has its own zoning code, as do all the cities in the other 57 counties in California, as do all the cities and towns and boroughs in the other 49 states and DC. There are over 12,000 census designated places in the US, almost all with their own zoning code, probably adding up to at least one or two hundred thousand unique zoning districts in the United States.

Again, Japan has 12. Beyond the other benefits I’ll talk about, it’s worth reflecting on how much easier this must make it to build housing – and anything else – across jurisdictional boundaries. This certainly came up in that report I mentioned explaining the origins of Japan’s mass customized detached housing market.

In the US, developers need to learn a completely different system in every city where they operate, not just the zoning rules but also the entitlement and permitting processes, the fees and infrastructure requirements, and on and on. It’s a huge waste of brainpower and time, and it’s a huge barrier to anyone looking to enter the market and compete with existing homebuilders, and that undoubtedly drives up the cost of building housing, and therefore how much is built and what all of us end up paying for it. Not surprisingly, the homebuilding market in the US is much more consolidated, and therefore less competitive, than it is in Japan.

I’ve shared a link to an English language summary of Japan’s zoning system produced by the Ministry of Land, Infrastructure, and Transport, and I’ll hit the highlights. First, an older Urban Kchoze blog post makes the good point that Japan’s zoning code tends to add more uses as you go from zone to zone, rather than each zone allowing only an exclusive use. Instead of having a zone or zones for commercial only, others for industrial, and others for residential – Sim City style – you’ll have one zone that’s residential, another that’s residential and commercial, and another that’s residential and commercial and light industrial, for example.

It’s an additive and inclusive system, making it more flexible and easier to build mixed-use, mixed-purpose, mixed-income communities. So as I go through these zones, unless I say otherwise, just be aware that when I mention additional uses allowed in the next zone, that zone allows all the previously mentioned uses too.

The most restrictive is known as the Category I exclusively low-rise residential zone. That’s a bit of a misnomer though, because while it is exclusively low-rise, it’s not exclusively residential – or at least not according to the usual American understanding of residential.

For one thing, this lowest density zone allows individual houses and multifamily, because none of the 12 national land use districts really distinguishes between single-family and multifamily homes. There’s no single-family zone, no R1. That’s maybe considered less groundbreaking today than it would have been five years ago, before a bunch of US cities and states had done away with snob zoning themselves, but Japan definitely got a very long head start and they go much further.

The second thing that makes this zone so unique from residential zones in North America is that while it allows schools, shrines, temples, churches, and clinics, which isn’t all that unusual, it also allows small ground-floor commercial uses in essentially any home.

Yes, the most restrictive zone in Japan allows small commercial uses, like restaurants, cafes, offices, or retail, anywhere and everywhere. Those commercial uses generally can’t take up more than 50 square meters or a little over 500 square feet of space though, and it can’t be used as a convenience store. Depending on the location, this zoning district can allow a floor area ratio, or FAR, up to 200%, or twice as much floor area as the size of the parcel, with building coverage as high as 60% of lot area. The maximum floor area is a function of the street width, with wider streets permitting more floor area as well as height.

Height limits don’t really exist in a fixed fashion. The building envelope – which includes the height, setbacks, and any slant in the roof, as well as floor area – is really determined by the requirement that buildings not obstruct sun exposure for neighboring buildings beyond some threshold, and that threshold is more protective of residential zones than commercial or industrial areas.

I think there are downsides to this approach, as with any, but one strength is that you don’t need planners setting arbitrary requirements parcel by parcel, which may be too protective of neighboring parcels in some cases and not protective enough in others. The Japanese approach to this, which isn’t at all unique to Japan, manages to treat everyone the same, or at least aspires to, holding them all to the objective standard.

Minimum parking requirements also don’t exist, which means parking is more right-sized to people’s actual needs. Tokyo’s high quality transit service and pedestrian environment allow most households to get by without a car, which also means they can avoid spending the tens of thousands of dollars per space that it costs to build above- and below-ground garages in new buildings. For all of Tokyo’s density and high land values though, I found that there were plenty of surface parking lots interspersed throughout the neighborhoods, often on relatively narrow streets and maybe only providing 4 or 8 spaces on a lot.

So no height limits, not directly anyways. And no minimum parking requirements. The other no-no is minimum lot sizes, which in most US cities tend to be at least 5,000 square feet per home in single-family-only neighborhoods, but a few cities like Houston have reduced to under 2,000 square feet, producing many thousands of affordable rental and owner-occupied homes.

Emergent Tokyo says that the city doesn’t really even have limits or guidelines on subdivision of parcels into multiple smaller parcels. That was a little bonkers to hear about coming from the US, where subdivision is often one of the most challenging administrative processes a property owner can undertake. The authors write that in Tokyo the only real regulation is requiring a two meter wide access path to allow entry from a front road.

One downside, which they discuss, is that these constant subdivisions have contributed to the loss of green spaces on people’s properties as more land gets dragooned into serving other purposes, whether for living in or, increasingly, for parking a car. As much as I think Houston’s minimum lot size policy is worth celebrating, the design of the resulting projects often leaves something to be desired, both functionally and aesthetically. Again that’s driven in large part by parking, with most Houston townhomes providing two parking spaces in a garage at the front of the building, so that you end up with a continuous curb cut into the sidewalk, and lots and lots of pavement.

The second zoning district is also exclusively low-rise residential, but category 2. It’s essentially the same as the first, but it allows convenience stores up to 150 square meters, or 1600 square feet. I assume this zoning district is responsible for many of the 7-Elevens and other gloriously well-stocked convenience stores you see every few blocks throughout Tokyo.

Category I mid/high-rise oriented residential zone is up next, and it adds hospitals, universities, stores and restaurants up to about 5500 square feet on a first or second floor, and garages. Floor area ratios in this zone max out at 500%, and lot coverage at 60%, which can get you up to at least 9 stories if the road is wide enough and the slant plane and shadow restrictions don’t get you.

Category 2 mid/high-rise oriented residential has the same range of floor area and lot coverage restrictions as Category 1, increasing the maximum floor area that can be dedicated stores, restaurants, and offices and such to 1,500 square meters or about 16,000 square feet, and allowing them on the third floor too.

The next two zones are Category 1 and Category 2 residential, which further increase the maximum space for stores and offices, allow small auto repair shops under 50 square meters, and inns and hotels, and then in category 2 allow karaoke boxes. And yes, I absolutely do appreciate that even with only 12 national zoning districts, one of Japan’s is dedicated to allowing karaoke. The floor area ratio for these zones is still capped out at 500% in the densest areas, but the maximum lot coverage increases to 80%.

Quasi residential is next, adding smaller theaters and movie theaters, warehouse space, and garages and auto repair shops larger than those permitted in the previous zones. The neighborhood commercial zone then removes the size cap for stores, theaters, amusement facilities, and so on, so they can now exceed 100,000 square feet.

After that is the commercial zone, which only adds to the list of permissible uses bathhouses with private rooms, but allows up to a 1300% or 13-to-1 FAR – and again, these FARs are the highest normally available, but only on the widest streets. A commercially zoned parcel might allow as little as 200% FAR if it’s on a narrow street, and most of the other zones go as low as 100%, or even 50% for the low-rise residential only zones.

There are three more zones, quasi-industrial, industrial, and exclusively industrial. Only the last one doesn’t allow housing, and FAR ranges from 100% to 500%.

A good resource on this is a YouTube video from the Life Where I’m From channel, titled Why Japan Looks the Way It Does: Zoning. It’s less than 15 minutes and shows plenty of examples of the built environment in these various zones.

I couldn’t find a summary of how much of Tokyo is covered by each zone, but I did find an interactive map that lets you look at each special ward individually. Just eyeballing it, about 10% of Shinjuku ward was low-rise residential, maybe 50 to 60 percent split between denser residential zones allowing 3 and 4-to-1 FAR, some dense quasi industrial here and there, and most of the rest zoned commercial, with FAR ranging from 4 to 1 to 10 to 1.

Chiyoda ward, where the Imperial Palace is located, is mostly surrounded by commercial zoning with FAR up to 13 to 1, plus a bit of residential to the west at 3 and 4 to 1. Bunkyo, directly to the north, is a bit sleepier, with a majority of land covered by the residential zones and allowing between 1.5 and 3 to 1 FAR.

Japan has an Area Division system where certain areas are designated as City Planning Areas, including Tokyo, and within those areas locations are designated as either Urbanization Promotion Areas or Urbanization Control Areas, with public infrastructure investment prioritized in the areas where growth is encouraged. Seems sensible, no?

Only 3.8% of Japan’s land areas falls within the Urbanization Promotion Areas, but they’re where two thirds of its population reside – 85 million people. Only 7% of the population live outside a City Planning Area altogether.

If only it could all be so simple, but Japan, like other nations also has plans and districts that can overlay these 12 land use zones.

District plans can be adopted to facilitate large-scale redevelopments, and might allow increased floor area in exchange for providing publicly useful infrastructure as part of the project, like roads and parks. There’s also a smaller block-level version of this program.

The authors of Emergent Tokyo discuss how parks and open space are often provided in the form of POPS, privately owned public space. From what I’ve read over the years, POPS have a fairly consistent track record, across many countries, of producing sterile and unwelcoming public spaces. There are exceptions of course, but the incentives are pretty poorly aligned for private businesses to produce attractive non-commercial spaces and then be on the hook for the cost of managing them.

I think it’s pretty widely agreed upon that one shortcoming of Tokyo’s urban planning is the relative lack of parks and open spaces, and POPS probably seem an attractive way to add more. You’re able to do so in a distributed way, as properties redevelop and communities grow even denser, and at no public expense – or at least not directly. But it seems like getting better public spaces out of these deals requires different incentives or contracts.


CONCLUSION

Anyway, there’s more I could say based on the Ministry guide alone, but the last thing I’ll mention is that cities can amend their bylaws to create Special Land Use districts that strengthen or relax the national zoning district standards, but I don’t get the impression this is widespread – certainly not in the way that every American municipality has its own unique zoning code, with little overlap even between adjacent towns, to say nothing of across county or state lines.

I’ve gone on long enough – probably far too long, really – but I’ll close with one final thought. 

This has been a data and policy-heavy episode, so I’ll go in the other direction at the end here. I had many expectations of Tokyo, but I didn’t expect to find Tokyo beautiful. Still, I did. Although the city isn’t as chaotic as its sometimes described, there is something unrestrained about its built environment that really resonated with me. I shared this thought with someone who responded with a quote: “the Japanese have a real sense of beauty, but no sense of ugly.” In other words, anything goes, and the results may be drab or offensive as often as they’re inspiring, charming, gorgeous. I couldn’t quite tell if the quote was a compliment or an insult, but it’s an eloquent description of how I feel, and for me, at least, it’s definitely intended as praise.

You can read more about our work on our website, lewis.ucla.edu. Extensive show notes are there too.

If I missed something important or got something wrong, or hey – if you liked this episode and want to let me know – my email is shanephillips@ucla.edu, and I’m on Twitter at shanedphillips.

Thanks for listening. Til next time.



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Michael Lens

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Michael Manville

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Paavo Monkkonen

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Shane Phillips

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