Housing Development in Post-War Japan: Historical Trajectory, Logic of Change, and the Vacancy Crisis
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View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by University of Waterloo's Institutional Repository Housing Development in Post-war Japan: Historical Trajectory, Logic of Change, and the Vacancy Crisis by Beibei Zhang A thesis presented to the University Of Waterloo in fulfillment of the thesis requirement for the degree of Master of Arts in Planning Waterloo, Ontario, Canada, 2017 © Beibei Zhang 2017 Author’s Declaration I hereby declare that I am the sole author of this thesis. This is a true copy of the thesis, including any required final revisions, as accepted by my examiners. I understand that my thesis may be made electronically available to the public. ii Abstract As evidenced by existing studies, housing development plays a central role in capitalism. However, little research has explored the logic of that role. This thesis contributes to filling this knowledge gap through a case study of housing development in post-war Japan. The case of Japan is interesting for the continuous increase in the national housing vacancy rate throughout the post-war period, which has reached an all-time high of 13.5% in 2013. The thesis argues that this phenomenon cannot be explained without considering the logic of the centrality of housing development in Japanese capitalism. The thesis builds an integrated approach of political economy and historical institutionalism to explore the aforementioned question. Applying this approach to the case of Japan, the analysis refers to the theory of the developmental state to analyze Japan’s macro political economy and to the concept of productive welfare capitalism to analyze the role of housing development in Japan’s capitalism. Based on a punctuated equilibrium model of institutional change, the research uses key ideas in historical institutionalist analysis - critical junctures and fast-moving/slow-moving institutions - to examine the transition of the state, the change in the way housing development was centralized in the state, and the state’s shaping of the supply-demand relationship in the housing market. The empirical evidence mainly derives from governmental documents and secondary sources. The main findings are as follows. Driven by the ideology of developmentalism, the central government of Japan has been directing the majority of resources to achieve developmentalist goals. Social policies have been expected to contribute to national economic growth rather than guarantee universal welfare rights to the citizen. Housing policies have been no exception. Throughout the post-war period, the central government has been intervening in housing provision and consumption through a variety of institutional measures such as welfare policies, finance policies, planning regulations, and taxation. The political logic of doing so lies in a desire to maximize the housing sector’s contribution toward national economic growth under the changing social-economic circumstances, while the choosing of interventions has also reaffirmed path dependence. The pro-growth interventions on housing have been interacting with the society and market and led to a dangerous oversupply of housing and an extremely high vacancy rate. The logic of the centrality of housing development in capitalism like Japan’s is embedded in the dominant economic ideology of the capitalist state. This ideology determines the role of housing in that state. It interacts with outside influential ideologies and drives change of the fast-moving institutions (e.g., policy and political institutions) that centralize housing development in the capitalist state. The way of change depends on the interaction between the slow-moving institution of ideologies and the fast-moving previous institutions. The research has also uncovered the social impact of Japan’s developmentalist housing policies. During economic stagnation, these policies have been driving continuous construction of new housing for economic recovery and have unavoidably accelerated the depreciation of old housing. They act as an invisible hand to transfer homeowners’ housing assets to the state, thereby supporting the state pursuing its developmentalist goals. Particularly, aged households, whose assets are largely embedded in their housing property, are more likely to suffer financial hardship and increased uncertainty. iii Acknowledgements I would like to express my gratitude to Professor Joe Qian, my supervisor, for all unwavering supports for my study at University of Waterloo. I would like to acknowledge Professor Pierre Filion, my committee member, for the insightful guidance for my research and continued encouragement. I am also very thankful to Doctor Paul Waley from University of Leeds, UK, my thesis reader, for the time he devoted voluntarily to review my thesis and participate my defence. I specially thank the Graduate Program Administrator Kelly Heald-Oliver for taking all the administrative work toward my graduation. She is always friendly, prompt, and ready to help. I value all of the experience I gained during my study at University of Waterloo. I am grateful to every people I met there and the time we spent together. I firmly believe that this experience will have long-lasting, positive impact on the rest of my life. I am responsible for any remaining errors. Any opinions, interpretations, and conclusions are the author’s and do not necessarily reflect those of the persons or institutions acknowledged above. iv Table of Contents Author’s Declaration ............................................................................................................................ ii Abstract ................................................................................................................................................. iii Acknowledgements .............................................................................................................................. iv Table of Contents .................................................................................................................................. v List of Figures ...................................................................................................................................... vii Chapter One: Introduction .................................................................................................................. 1 1.1 The Centrality of Housing Development in Capitalism ..................................................... 2 1.2 The Case Study Country ....................................................................................................... 4 1.3 Housing Vacancy and the Japanese Case ............................................................................ 6 1.4 Methodology: Political Economy and Historical Institutionalism .................................. 11 1.5 Thesis Overview ................................................................................................................... 13 Chapter Two: Political Economy and Housing ................................................................................ 15 2.1 Political Economy and the Housing Question ................................................................... 17 2.2 A Political Economy Perspective on Housing Vacancy .................................................... 19 2.3 Discussion ............................................................................................................................. 21 Chapter Three: Historical Institutionalism and Housing ............................................................... 22 3.1 Institutional Continuity and Institutional Change ........................................................... 23 3.2 Historical Institutional Approaches Toward Housing ..................................................... 24 3.3 A Political Economy and Historical Institutionalist Framework .................................... 25 3.4 Discussion ............................................................................................................................. 27 Chapter Four: Housing Development in Post-war Japan: A Political Economy and Historical Institutional Analysis Framework ..................................................................................................... 29 4.1 The Developmental State .................................................................................................... 29 4.2 The Role of Housing in the Developmental State .............................................................. 31 4.3 The Evolution of the Japanese State and its Housing: Incremental Changes and Critical Junctures ............................................................................................................................ 33 4.3.1 The developmental state under Keynesianism ................................................................... 34 4.3.2 Neoliberalism and the neoliberal turn of the state ............................................................. 35 4.3.3 Crises and the change of developmental pathways ............................................................ 37 4.4 Discussion ............................................................................................................................. 39 Chapter Five: Housing Development in Post-war Japan: An Empirical Analysis ....................... 41 5.1 The End of the War to the Mid-1950s: Postponed Post-war Housing Recovery for the Priority of Industrial Recovery .....................................................................................................