Japan Tries to Dampen Tokyo Land Prices

JAPAN is trying to bite the hand that feeds its economic expansion - high Tokyo land prices. A drastic drop in prices would have global repercussions, so government efforts have been more nibbles than gulps at the problem. In recent months, it has put controls on speculation and bank loans in land sales, passed a vague land-use law, and talked more seriously about moving the capital from earthquake-prone Tokyo.

``Soaring land prices undermine the sense of social fairness and rob people of their dream of home ownership,'' stated Prime Minister Toshiki Kaifu in a policy speech last Friday. ``The poor housing condition of the Japanese people is a major reason why they cannot feel affluent.''

The reluctance to tackle the problem head-on rises from the fact that skyrocketing land prices have provided valuable collateral for Japanese companies to obtain loans and sell stock for new investment.

``Land prices in Japan do not reflect the actual usage of land,'' says Takumi Watanabe, chief researcher at the Japan Real Estate Institute. Rather, cycles of speculation and a reluctance of the Japanese to sell their land have kept prices going up and up, he says.

But the latest price rise, which began in 1987, opened up a big wealth gap between land owners and apartment renters.

``Japan is not accustomed to this difference between haves and have-nots,'' says Katsuichi Uchida, law professor at Waseda University and leader of a new housing activist group. ``It's time to change.''

To buy a home in any of the 23 wards of Tokyo now requires a worker to save nine years of a typical salary - one reason for Japan's high savings rate. If maximum efforts were made to build housing in Tokyo, said a 1988 National Land Agency report, there would be no need for any commuters into the city.

``The postwar history of Japan has been industrialization, not housing for the people,'' says Mr. Uchida. A basic problem, he says, is that the government thinks housing is strictly a private concern, and the Japanese people do not make a high priority of housing.

``Just look at the way we use paper for walls!'' says Uchida. Japan does not lack for land, he says, but the Japanese prefer to crowd into the cities, because of a ``cultural bias against living in a forest and mountains, where the people think there are spirits.

``But slowly the Japanese are realizing that they have been forced to live in rabbit hutches,'' he says.

The concern over housing has forced many big companies to construct living quarters to attract and keep employees. Last year, for instance, Toshiba Corporation launched a five-year plan to build 2,700 rooms in dormitories and 2,600 company houses for workers. A few companies have moved their offices out of Tokyo.

Last October, the Bank of Japan decided to curb commercial bank loans to real estate speculators, partly out of concern that such speculation has spurred recent inflation. Still, 1989 land-related loans increased by 14.1 percent, reaching $325 billion. Last year, land prices in all of Japan rose 28.7 percent on average, according to the National Tax Administration.

In late 1987, the government began surveillance of property sales of more than 300 square meters. Buyers and sellers have been advised whether a price for a property sale is above a market norm set by the National Land Agency. The effect has been to dampen prices in 1988 and 1989.

``The monitoring is like a fire extinguisher - it's mere presence keeps prices in check,'' says Mitsuhide Hoshino of the National Land Agency's policy division.

In December, the parliament passed a basic land law that sets out no specifics, but does establish for the first time that public welfare must come first in the use of land and lays the legal groundwork for urban planning. United States trade officials, who want changes in Japan's land prices, say the law is ``a very constructive step forward'' that may effect policies ``over the long haul.''

Next month, the Ministry of Construction plans to submit a bill to parliament that would force local governments in Japan's three biggest cities to build 3 million new homes and apartments within a decade.

Other solutions are under way: a plan to open the national forests for housing; new zoning rules that allow Tokyo homes to be three stories high; a plan to take away tax breaks for urban farmland; and a Land Agency proposal to transfer 97 government offices away from Tokyo within five years. Also, a central data bank on who owns and sells land in Japan will be set up by 1993.

Critics say the government's efforts are half-hearted, too late, and suspect.

``All the government really wants to do is increase the profits of real estate companies and to make Tokyo into a financial center like New York and London,'' says Kazuo Hayakawa, a Kobe University professor and a housing expert. ``It doesn't care for the lifestyle of the people.''

Ultimately, says Uchida, the best solution is to decentralize authority away from Tokyo, giving local mayors and governors more power, and stopping the flow of people and industry to the city.

Second of two stories on land use in Japan. The first appeared last week.