Land Problem in Japan

Land problem in Japan has a long history. The sharp rise in land price in iecent years has spotlighted the aberrance of the problem. It is widely accepted that land problem is one of the most serious social and economic problems that Japan faces. In this paper. I discuss four points relating to the land problem in Japan. First, I review the movement of land price using government statistics. Second. I analyze the nature of land price, in particular the large difference between land price and the rental cost. Third, I will examine the causes underlying the land problem. In this connection I would like to point out that the cause of the land problem we face today is not the absolute shortage of land but the fact that land is treated marketable asset. Finally, I will discuss the government's land policies and various measures it has taken, with a particular emphasis on land taxes, the Land and Building Lease Laws, and the securitization of land. Land problem in Japan has a long history. The sharp rise in land price in recent years has spotlighted the aberrance of the problem. It is widely accepted that land problem is one of the most serious social and economic problems that Japan faces. In this paper, I discuss three points relating to the land problem in Japan. First, I will discuss the movement of land price and focus on the large difference between land price and the rental cost. Second, I will examine the causes underlying the land problem. In this connection, I would like to point out that the cause of the land problem we face today is not the absolute shortage of land but the way people treat land as a piece of marketable asset. Third, I will discuss the government's land policies and various measures it has taken, with a particular emphasis on land taxes, the Land and Building Lease Laws, and the securitization of land. I. Land Price in Japan (1) Recent Trends of Land Prices Table I shows the trend of land prices in the three major urban areas in Japan for the second half of the 1980. In Tokyo, Iand price almost trippled during the two years 1987 and 1988. The recent survey shows that while rises in land price in the Tokyo district have subsided, the upward pressure on land price has spilled into the Osaka district, boosting the