Owners of vacant land in disaster-hit areas following the 2011 Tohoku earthquake and tsunami, and Fukushima Daiichi nuclear disaster may see a steep hike in their property taxes from 2022 onwards.
Local governments in Miyagi Prefecture are paying close attention to vacancy rate trends as demand for temporary housing following the Tohoku disaster is expected to be short-lived.
The prefecture has a vacancy rate of 9.4%, making it the lowest in Japan and the only prefecture with a single digit vacancy rate. The low number of vacant houses, however, can be largely attributed to a steep rise demand for temporary housing from residents displaced by the 2011 Tohoku disaster.
There are concerns that the vacancy rate will start to climb again as the public housing projects built for these residents are gradually completed.
Reconstruction and relocation efforts in the disaster-hit areas in Tohoku are being stalled as out-of-date property records are making it close to impossible to locate landowners.
In the town of Otsuchi in Iwate Prefecture, over half of the homes were either severely damaged or completely destroyed in the 2011 disaster. Barely any progress has been made on reconstructing the town and almost 4,100 residents (40% of the town’s population) are still living in temporary accommodation.
Repair bills up to 100 million Yen or more
Yoichi Haryu, 57, owns a 2-storey home and storehouse in Wakabayashi-ku, Sendai City. The buildings date back to the late Meiji ~ early Showa era. The 2011 earthquake caused the beams to twist and bend and the wooden posts to twist and come unstuck.
Somewhat sensationalist magazine Nikkan SPA has reported that Sendai is experiencing a property bubble brought on by the reconstruction work following the Tohoku disaster.
The government is requesting that residents from the evacuation zones near the Fukushima Daiichi Nuclear Power Plant refrain from any real estate transactions within the area until evacuation orders are lifted.
The warning is to avoid any potential trouble arising after Tepco pays compensation to landowners and to ensure a smooth reorganization of the zones. The Yomiuri Shimbun gave a slightly different, and perhaps more honest reason for the request, which is to avoid the land being acquired by various yakuza organizations who, seeing an opportunity, may make it more difficult and more expensive for the government and Tepco to negotiate the storage of contaminated waste on such land. This is not an unfounded fear, as local real estate agents have reported receiving inquiries with very similar intentions.
After a year and four months of waiting, residents of “Neo Heights Kuwano” in Fukushima’s Koriyama City have been given the all-clear to move back into their apartments after the building was repaired following serious damage sustained during the Tohoku earthquake last year.
The first four floors of the building suffered damage to their exterior walls and the reinforcing inside the building’s columns had broken. This led the city to declare it as ‘completely destroyed’. As the majority of the apartment doors were jammed and could not be opened, the residents had to move out.
The disaster-hit Tohoku region is experiencing a severe shortage in rental accommodation and local real estate companies are hurting.
“Despite inquiries increasing day by day, we have no properties on our books. We have clients in our office but no properties to show them. Our revenues are plummeting.” – President of a property management company in Sendai City.
The months of February and March are typically the busiest and provide the largest revenues for the company, however they currently have no vacant studio apartments and accommodation is severely limited.
The town of Futaba, which fell within the exclusion zone around the Fukushima nuclear plant, is demanding 19.2 billion Yen (234 million USD) in compensation from TEPCO for the loss of use of the town’s real estate.
The town is claiming damages for loss of use to town-owned land, government buildings and schools. There are a total of 51 unusable buildings that were mentioned in the claim. A representative from TEPCO said this was the first time they received a real estate related claim from a town or city.
Just after the March 11 Tohoku earthquake it was announced that zero buildings had collapsed, which everyone naturally assumed was a testament to the strict building codes in Japan.
However, it has now been acknowledged that 100 apartment buildings in Sendai city have been completely destroyed.