Renting in Japan vs America – Part 2

Last week I began this series with a post detailing my experience, and what I know about the system of renting a place to live in the US, mainly focusing on details that are of particular note for a comparison with Japan. I then followed up with an interlude on anecdotes of racial discrimination in the American housing market, as discrimination in apartment rental is widely discussed in Japan. I had intended to continue sooner, but we’ve had so much active discussion on the blog over the past week that I decided to hold off for a bit longer. In this post, I will describe what I know about the process of renting a residence in Japan, explaining the peculiarities of the fee structure and the search process, but not getting much into the actual laws or regulations. I decided to keep these separate as I believe it is important to first discuss the reality of the system before trying to analyze how it compares with the letter of the law. In the next post I will describe my own experiences in searching for and renting here in Kyoto, as well as providing the details of my current contract as a case study.

In Japan, the vast majority of rentals go through real estate agents, and direct rentals from a landlord are quite rare without a personal connection of some kind. A typical rental process goes as follows:

You go to a real estate agent, tell them what you’re looking for, they show you information on some potential rentals, you pick ones you want to see. This process may begin online, and there are plenty of websites for browsing real estate, but once you indicate your interest and head over to the office, things are pretty much the same.

The agent will first call the party responsible for the property, be it the actual landlord, management company, or another real estate firm to check availability, verify conditions, and arrange a viewing time. As rental units are often cross-listed with multiple agencies, they need to coordinate schedules to make sure prospective renters don’t run into one another, and that the key is available. Once one or more viewings have been arranged, the agent will then drive you around in the company car to view the properties. They will show you as many as you like without complaint, and without expecting any charge, as these services are all provided for by the introduction fee paid upon completion of a rental lease.

Once you pick one you like, they sit you down, read and explain the contract clause by clause (apparently a legal requirement) and then you sign/stamp it, pay them, they hand over the key and documents related to required disaster insurance or activation of utilities, and get to move in. After moving in, you never have any dealings with the real estate agent again, but instead usually deal with a management company (管理会社), who actually accepts rent on behalf of the owner, and fields any questions you have regarding repairs etc.

When moving in, one usually has to pay first months rent, key-money, security deposit, real estate agent fee, and an insurance fee. The monthly bill may include a ‘common maintenance fee’ (共益費) to cover costs relating to the common areas of the building, usually a few thousand yen a month (compared with a typical rent of tens of thousands yen). In the US, condo or coop residents pay a similar maintenance fee, but for rental units it is subsumed into the general rental fee. As far as I can tell, there is no logical reason for this separate fee, except to make the advertised rent look smaller than it really is.

The term ‘key money’ is the standard translation of the Japanese term reikin (礼金), which literally means something like money given in thanks, or as an obligation.  According to Wikipedia, reikin actually started as a gift given to the landlord by the family of a young student or single worker who moved from the country to the city, in exchange for the landlord watching after the naive new arrival. This gradually became institutionalized, and over the decades shifted from being a payment intended to cement a two-way social obligation (as the word implies) to a simple up-front fee paid to the owner when renting a place to live. Today, reikin equal to 1, 2 or even 3+ months rent is ubiquitous, although apparently common in some regions than others.  Unlike a security deposit, reikin is never returned, regardless of how long one stays in the place, and the amount is also unrelated to how long one intends to stay. The legal status of  has always been ambiguous, generally assumed to be technically illegal, but with no clear guidelines or alternative to paying it.

Key money does exist in the US, but is both explicitly illegal and quite rare. The only place I am aware of it being common is Manhattan, where building superintendents are known for requiring a cash bribe in exchange for leasing a desirable apartment, particularly those with rent-controlled below market-rate rent, although it probably exists in other markets as well. The two big differences are that reikin in Japan is both clearly advertised, and grudgingly tolerated, while key money in Manhattan is always an under the table cash, due to its status as a clearly illegal bribe, and that in Japan reikin always goes to the landlord, while in Manhattan it often goes to the super instead. In recent years, there has been an increasing trend to offer reikin-free apartments in exchange for a slightly higher monthly rent, which is obviously superior for anyone who isn’t completely sure they will be staying in the same place for many years, or who lacks enough savings to easily spare the hundreds or thousands of dollars (equivalent) that one has to piss away on reikin.

Security deposits (shikikin – 敷金) are also standard in Japan, and usually equal one or two months rents, as in other countries. Supposedly, landlords in Japan are far more likely to con you out of your security deposit than in most other countries, but I am told that if you press hard enough you can usually get most of it back. A good contract will specify that certain accouterments, such as the tatami mats, wallpaper, fusuma (wooden/paper screens) are “disposable” items, damage to which shall not be charged from the deposit.

Sometimes, the reikin and security deposit are combined into a somewhat bizarre ‘guaranty money’ (hoshoukin – 保証金), in which one pays a certain large amount, from which a certain smaller amount may be returned at the conclusion of the lease. This is functionally identical in every way to having a separate reikin and deposit, except that by using a different fee structure the real estate agent can disingenuously advertise the unit as ‘no reikin!!!’ while in reality being just as bad. Hoshoukin is usually 2-4 months rent, or equal to the amount that reikin and security deposit would be combined.

As I mentioned earlier, there is also a fee paid to the real estate agent, usually equal to one month rent, but sometimes companies will offer a fee equal to 1/2 month rent. Disaster insurance is also mandatory, at least when renting a house (I don’t recall for apartments), but is not particularly expensive, perhaps in the range of ¥10,000-20,000 per year.

The last fee that needs mentioning is the ‘renewal fee’ (更新料). Most apartment leases in Japan are for one or two years, after which one generally has to pay a renewal fee, usually equal to one month rent per year of lease. In Japan, one can generally cancel a lease with no penalty by giving only one month notice, which is actually one of the reasons that landlords had been hiking up the reikin for so many years-to compensate for the possible loss of income due to a very short-notice vacancy. (And also just because they can get away with it.)  The renewal fee is essentially interim reikin, discouraging tenants from making an unscheduled move in the middle of their lease, and helping to prevent loss of long-term rental income to the landlord.

While not a fee exactly, I can’t end this post without discussing the guarantor system. When renting a place in North America, ones credit worthiness is based on the credit score, which is ultimately derived from one’s entire financial history. The landlord checks the customer’s credit score, perhaps also looking a recent tax statement for proof of current earnings, and then allows them to rent if they seem sufficiently trustworthy. Generally, a co-signer or personal guarantor is only needed in cases where the renter hs no credit history or income, such as the case of the college student I mentioned in the first post. In Japan, there is no personal credit score, with personal guarantors required for and and all rentals. The guarantor (hoshounin – 保証人) the guarantor co-signs the lease with the renter, and is therefore legally on the hook should the renter skip out on rent, or refuse to pay for damages in excess of the security deposit. The guarantor’s creditworthiness is generally based on proof of income, and can be anyone that makes enough money. Foreigners can actually serve as guarantors, although permanent residency may be required. For renters who don’t have a relative, boss, teacher, or well-off close friend to serve as a guarantor there are also companies that provide guarantor services-essentially rent insurance-for around ¥50,000.

So, there you have a general overview of some of the unique properties of Japanese rental arrangements. I’ll move on to my personal experience in the next part, but I’m sure everyone will bring some corrections/additions/information on local variance to the comment thread below.

Dueling PR: Are consumers spending more or less on weddings during the recession?

Are Japanese couples spending more or less on their weddings during the current recession? For the answer the J-media have unsurprisingly turned to their corporate overlords, but this time it looks like they have been given mixed signals:

  • Back in April, some of you might have seen news suggesting Japanese couples are going for more “bare bones” wedding arrangements. Specifically, the story profiles Nagano-based The Y’s (it’s a pun) is offering “photo-only” and other no-frills wedding packages for bargain prices starting at 50,000 yen. The story notes that the first such service originated in Kyoto in 1997 and now about a dozen companies nationwide administer more than 4,500 weddings (0.62% of the 723,113 weddings that took place in 2008).
  • More recently, Recruit-affiliated wedding information site Zexy has released its Marriage Trend Survey 2008 (PDF). The headline figure? While the total amount spent on weddings dropped slightly from 2007, the cost of each individual wedding has gone up. The biggest reason survey participants noted as to why they held a ceremony and afterparty was to express thanks to the people in their lives.

So does that mean the recession pushes people to spend more or less (or the same) on their weddings? J-Cast seems to think data like this reflect Japan’s growing economic disparity. The key to explaining this disparity, they argue, lies in whether a couple’s parents helped pay for the wedding. Recruit’s data shows that 78% of couples did have parental support, so perhaps the other 22% had no choice but to settle for less.

I have no data to back me up (not the first time), but I suspect that weddings can be somewhat recession-resilient. Though weddings can be expensive, if you invite enough people they will bring more than enough ご祝儀 (cash gifts) to make up for the cost. Some couples even profit from the exchange (though that means they will have to attend many of the guests’ own weddings later on).

Obviously, that could still mean the poorer sections of society have to settle for less, for a lot of reasons. Without parental support, a young couple is unlikely to have the cash that’s needed up front to make deposits or pay bills ahead of time. Also, poorer couples have poorer friends, limiting the amount of financial support they can ask for. And at any rate there is a recent trend of a rising number of shotgun marriages (estimates range from 26.8%-40% of new marriages), which can make it socially difficult to hold a big celebration due to the shame involved.

Ayase to start fining smokers starting in October

In my last post about bicycle parking, I noted that the enforcers didn’t seem to be making much of an impact on illegal bike parking, except maybe at the margins (I’d be tempted to park there more often if I didn’t have a reliable space at my apt. building).

Another rule in Adachi-ku that’s only effective at the margins is the ban on smoking on the streets. In a reverse of the common American rule, in Japan smokers are often allowed to smoke in designated areas of public buildings but banned from smoking on the street. This makes for some smoky izakaya, but to me it makes sense because Japan’s narrow streets and urban lifestyle mean you are affected more by street smokers than you would be in a big American city.

Unfortunately, the bans tend to be ignored by whoever is insensitive enough to light up. They obviously know it’s against the rules but wear a “screw you” scowl on their faces and no one does anything.

One effort to combat these scowlers has been to enhance enforcement in high-traffic areas by dispatching workers who enforce the rules by collecting small fines on the spot. Adachi-ku has imposed such a ban since October 2006 starting with a 1,000 yen fine in the Kitasenju Station area. Ever since I have been in the area I have seen elderly people (volunteers I presume) asking some very surprised and incredulous smokers to pay 1,000 yen on the spot.

Similar exchanges are expected to come to my neighborhood this October as the fine is set to be expanded to include the Ayase Station area:

From Adachi-ku bicycle parking enforcers

The details of anti-smoking ordinances vary from place to place, but most appear to follow similar guidelines – ban smoking on the street everywhere (except some small smoking areas) but only enforce in areas of major foot traffic such as train stations. Many places such as Tokyo’s Chiyoda-ku post their enforcement stats online. Since beginning its policy in November 2002, Chiyoda-ku has fined a total of 42,230 people. Though I could not find figures on whether these people are actually paying the fines, if everyone has paid they have collected a total of 84.5 million yen, which adds up to something like 11.3 million yen a year.We also don’t know how many people the enforcers tried to stop but couldn’t.

For its part, Adachi-ku claims to have issued 3,498 fines in the Kitasenju area. As noted above, the preferred collection method is to demand payment on the spot. Enforcers are required to show proper ID upon request, and you are allowed to appeal if you don’t think you deserve the fine. However, there appears to be nothing the enforcers can do if you simply ignore them or refuse to take possession of the ticket.

In the initial period of enforcement, Ayase can probably expect a similar reaction that was documented when Kobe expanded its enforcement in 2007 – refusals by people who claim ignorance of the rule, people tossing out cigarettes just before entering the restricted area, and lots of people simply refusing to acknowledge the existence of the enforcers. Seeing the jerks who light up even when they know the smoke bothers everyone is one of my pet peeves, so here’s hoping our friends the elderly enforcers can get the job done.

Koreans will say goodbye to seals

A few months ago, I wrote about the declining use of seals in Japan, and Adamu commented that Japan ought to abolish seals altogether. Well, South Korea is almost there:

At present, 32.89 million Korean nationals, or 66.5 percent of the entire population, have personal seals registered with the authorities, while a total of 48.46 seal certificates were issued last year, incurring enormous social and economic costs, according to government data. Hundreds of personal seal forgery cases are also reported every year.

The Ministry of Public Administration and Security said the government plans to scrap 60 percent of official demands for the personal seal registration certificates this year, with the remaining 40 percent set to be gradually abolished over the next five years.

A separate Joong Ang Daily article explains that this policy was the work of a “Presidential Council on National Competitiveness,” and that Korea’s use of seals only dates back to its days as a Japanese colony (its seal registration law was instituted in 1914).

Meet the bicycle parking enforcers

Yesterday evening on the way home I caught Adachi-ku’s bicycle parking enforcers in action:

From Adachi-ku bicycle parking enforcers

The open area outside Ayase Station’s east exit is normally filled with illegally parked bikes (because it basically serves no other function). As in most areas, Adachi-ku bans bike parking near stations except in designated parking lots (there is one that’s free of charge on the south side and several fee-based ones). But in reality, most of the time the only thing stopping people from parking in this area are some old men in yellow vests (apparently officially sanctioned volunteers) who verbally warn people not to park there (even as 5 others are parking their bikes directly behind them).

But about once a week the enforcers come around, and it’s on these days that the park becomes oddly bike-free. On this Saturday in particular I was walking in an area that’s usually so flooded with bikes it’s impossible to walk through comfortably, but when the enforcers came around there were only two or three bikes to be found. Somehow everyone seems to know what day the enforcers will be there.

According to the Adachi-ku homepage, the district only enforces bicycle parking within a 300-meter radius of train stations, as those are the places where offenders concentrate.

If your bicycle is caught by the enforcer’s net outside Ayase Station, you must make your way to the Kita-Ayase relocation center (on foot, presumably). To retrieve a bike that’s been confiscated will cost you 2,000 yen and require you to produce proof that you own the bike along with a working key. Act fast, though – bikes in custody for two months will be “disposed with.” While I don’t know exactly what Adachi-ku does with the orphaned bikes, many abandoned bicycles nationwide end up exported to North Korea,  so if you don’t want to fund Kim Jong Il’s regime, you need to retrieve your bike as soon as possible!


A Yomiuri photo of bicycles slated for export.

The Wikipedia article on this issue makes an interesting point – in most cases, there are more people who benefit from illegal bike parking than who are adversely affected by it. No one might be explicitly advocating that bikes should be permitted to park wherever they want, but the fact remains that the fee-based parking lots are expensive and often inconvenient. This means that politicians have a hard time taking decisive action as it would upset the population.

Japan’s Peninsulas

Geography and cartography is one theme at, where I regularly create and post maps of areas of the world when I can find no suitable version on the world wide web. Recent examples include the political geography of the Russian Revolution and the Soviet Breakup, the modern constituent kingdoms of Uganda, and maps of one day states, among others.

Having traveled across much of Japan and discovered minor peninsulas that don’t appear on major maps, I went searching for a map of Japan’s peninsulas but found none. So, I made my own — it’s not exhaustive, but it does include all major peninsulas, and as many minor peninsulas that I could incorporate into the map under the current narrow graphical specifications. Please note that academic and practicing geography experts disagree with the categorization of “peninsula” for some of the minor peninsulas labeled on this map. (The enlarged map is .png file, and can be easily edited if someone wants to further contribute to the map, correct inaccuracies, or amend to upload to wikipedia.)

Japan Peninsula Map Thumb
Click to enlarge

Think you know Japan’s peninsulas like a real expert? Then take the Yahoo! games 日本半島検定 exam, in which you take 8 questions to test your mettle! All the information required to pass is contained in the picture above.