(Tokyo) To address the growing problem of families being forced to relocate from the capital due to exorbitant rents, the Tokyo Metropolitan Government is pushing forward a plan to provide low-cost housing for families.
According to Nikkei Asia, under this plan, starting in the next fiscal year beginning April 2026, the government and private sector will jointly invest over 20 billion yen (approximately S$170 million) to provide housing with rents about 20% below market prices; approximately 300 units will be released to the market in phases.
Specifically, the Tokyo Metropolitan Government will invest 10 billion yen, while the private sector will raise over 10 billion yen.
The government has selected four companies to lead the housing fund management: Nomura Realty Development, Mitsubishi UFJ Trust Bank, Resona Real Estate Asset Management, and SMBC Trust Bank, a subsidiary of Sumitomo Mitsui Banking Corporation (SMBC). These groups all have businesses in finance and real estate.
This public-private partnership model is the first affordable housing financing scheme pioneered by a local government in Japan. The various housing funds are used to invest in new and existing apartments and detached houses, with priority given to families with children and single-parent families.
Further Reading
Tokyo rents continue to rise. Data from real estate research firm Tokyo Kantei shows that the average rent for apartments in Tokyo's 23 wards reached 4,809 yen per square meter in September, a 12% year-on-year increase.
However, the supply of new apartments in Tokyo is shrinking. Only 11,226 units were released in the first three quarters of this year, slightly higher than the same period last year, but still at a low level since the early 1990s.
The Tokyo government provides public housing, but requires applicants to undergo economic status screening. Expanding the supply of public housing could put pressure on private companies.
The difficulties faced by low- and middle-income groups in the rental market in Japan are becoming increasingly severe. The Tokyo government is collaborating with private companies to provide support for families unable to obtain public housing. The companies that have qualified for this collaboration all possess expertise in developing affordable housing.
