UR in a nutshell

For folks trying to find an affordable apartment near a major Japanese city, one useful resource is the Urban Renaissance Agency (都市再生機構 toshi saisei kikou), usually called “UR” in Japanese.

UR has a vast portfolio of properties. Although the agency is associated with danchi, the intimidatingly enormous apartment complexes scattered around the suburbs of Japanese cities, they also offer upscale center-city properties, such as the high-rise apartments on the south side of Shiodome in Tokyo (within spitting distance of Shinbashi and Ginza).

There are several advantages to renting through UR. Unlike many private landlords, UR does not charge for “key money,” only imposing a (theoretically) refundable 3-month security deposit at the start of the lease. There are also no brokerage fees, and no additional fees to renew the lease upon its expiration.

Perhaps most saliently for the readers of this blog, UR also has few barriers to entry. Anyone with a certain level of income or assets can generally rent a UR apartment, and even the less financially well-off can get into UR by prepaying their lease. UR does not discriminate against foreigners, against unmarried couples, against same-sex roommates or against part-time renters, despite the fact that private landlords routinely shun all four groups for unclear reasons.

How UR came to be

UR is a government-mandated developer established in 2004, and claims to be “probably the largest landload [sic] and developer in the world.” It functions like a private company with an enormous balance sheet, but remains under the supervision of the Land, Infrastructure and Transport Ministry, like its many forebears.

The first forebear of UR was the Japan Housing Corporation (日本住宅公団), established in 1955 to build housing for workers in major cities during the post-Korean War economic boom. JHC built many of the classic danchi around Tokyo and Osaka, starting with Kanaoka (Sakai) and Inage (Chiba). In the sixties and seventies it became more deeply involved in mixed-use “new town” projects in the suburbs, incorporating apartment buildings, single-family homes and commercial properties. Another state-owned Residential Land Development Corporation (宅地開発公団) was set up in 1975 and is chiefly remembered today for its work on the Chiba New Town project (the Hokuso Line in Chiba was once called the “Corporation Line” or 公団線 since the Corporation owned everything around it).

These two entities merged into a single Housing and Urban Development Corporation (住宅・都市整備公団) in 1981, which was renamed to Urban Development Corporation (都市基盤整備公団) in 1999. During this era, the corporation shifted from crowded apartment complexes and suburbs to more spacious and comfortable projects, as the postwar urban population explosion began to slow down and wealthier consumers started to demand more than a few tatami mats surrounded by reinforced concrete.

UR’s other family line starts with the Coal Mining Area Development Corporation (産炭地域振興事業団), founded in 1962. This entity was set up to encourage business development in hard-hit coal-mining regions and to support the re-training of former coal miners. In 1972, the entity’s mandate broadened, and it became the Industrial Relocation and Coal Mining Area Development Corporation (工業再配置・産炭地域振興公団) for two short years, before the Diet settled on a less unwieldy name, Japan Regional Development Corporation (地域振興整備公団), in 1974. For the next thirty years, JRDC worked on various projects to spur industrial and economic development in the nether regions of Japan, focusing on isolated prefectures like Akita, Aomori and Miyazaki.

UR was formed when JRDC was broken up in 2004. The urban planning operations of JRDC were folded into UDC to form UR, while the industrial development operations of JRDC became part of a new (and very awkwardly-named) Organization for Small & Medium Enterprises and Regional Innovation (中小企業基盤整備機構).

The agency is now governed by a special statute which defines its purpose in one enormous run-on sentence:

…to plan the renewal of major cities and regional urban centers where foundational arrangements for effective urban activity and rich urban living have not been adequately conducted in response to changes in social and economic conditions, by conducting services related to improving the arrangement of urban districts and assisting in the provision of rental housing, through increasing urban functions and improving the residential environment in response to changes in social and economic conditions, and by conducting services related to the management of residential housing inherited from the Urban Development Corporation, to plan the sustainable preservation of rental housing which has established a desirable residential environment, thereby contributing to the sound development of cities and the greater sustainability of citizens’ lifestyles.

How UR works

Some UR developments are essentially intended to monetize government land. The Shiodome apartment buildings, for instance, are on the site of what was Tokyo’s main rail freight terminal during the days of nationalized rail. The huge Hikarigaoka development (at the end of the Toei Oedo Line in Tokyo) was redeveloped from Grant Heights, a US military housing complex returned to Japan in the 1970s (itself built atop an Imperial Army air field).

Other developments such as Chiba New Town, the Tsukuba Science City, the Saitama New Urban Center and the Kansai Science City are built on land purchased from private owners, no differently than a private real estate developer might operate.

Besides its government equity fund of 948 billion yen, UR also issues special Urban Renaissance Bonds (都市再生債券), currently totaling about 1.8 trillion yen. But its main source of funding is the Ministry of Finance, which has pumped ten trillion yen of loans into UR through its Fiscal Investment and Loan Program. Another two trillion or so comes from debt investment by domestic banks and life insurance companies.

Aside from being a developer, UR is also a policy arm of the Japanese government, and of MLIT in particular. The government regularly passes down policy statements to UR. This February, for instance, MLIT made the following pronouncement (I’ll spare you a word-for-word translation this time because the original badly needs editing):

Looking at the state of cities in our nation amidst globalization and a developing information age, the largest cities are losing allure and international competitiveness as they stand shoulder-to-shoulder with cities overseas, while they continue to be troubled by the expectation of severe damage in crowded urban areas in the event of a disaster.

Regional urban centers are losing their urban functions as city halls and other public facilities move to suburban locations along with major commercial facilities, as city centers become vacant and as industrial production weakens in outlying regions. The state of these regional urban centers reflects not only a decline in urban functions of the cities themselves, but of their entire surrounding regions.

Cities are the source of our national dynamic. In response to major socioeconomic shifts–the information age, globalization, declining birth rates, aging, depopulation and environmental problems–it is necessary to increase the competitiveness of cities, and to increase their allure using the history and culture of each city, by constructing “compact cities,” beautiful cities where one can safely live in a relaxed environment, and by constructing a society where sustainable development is possible.

This all sounds like fluff so far, but the next few paragraphs start indicating otherwise:

Such urban development demands drawing upon and deploying capital, know-how and other civilian power in these cities to arouse new demand. However, it is difficult to plan improved development through governments and private businesses alone because (among other issues) the legal relations between these parties are complex and difficult to coordinate.

Taking this situation into account, in order to advance the development of new 21st-century urban centers, UR will take a leading role in urban development, spur private investment in cities and contribute to the revitalization of the economy…

Moreover, in the global economic downturn spurred by the subprime loan crisis, our nation’s economy is in a deeply troubled state of falling stock prices, less available capital for businesses and ongoing labor restructuring. As private businesses become less interested to invest in urban development, UR shall strengthen its efforts to spur private demand, and while supplementing private urban development, shall make efforts to plan a shift toward a more domestic demand-led economy.

20 thoughts on “UR in a nutshell”

  1. Awesome post. One key fact missing – you need eijuken to use UR! Only citizens and permanent residents can move in. I sdont have the link now but it can be found on their site. If your spouse is Japanese he or she can apply but then she needs to meet the financial reqs

  2. Actually, that’s not true. Here’s what they say:

    1 「出入国管理及び難民認定法」(昭和26年政令第319号)第22条第2項もしくは第22条の2第4項の規定により永住許可を受けた方、または「出入国管理及び難民認定法の一部を改正する法律」(平成元年法律第79号)附則第2項の規定により永住者としての在留資格を有する方。
    2 「日本国との平和条約に基づき日本の国籍を離脱した者等の出入国管理に関する特例法」(平成3年法律第71号)第3条に規定する特別永住者の方、または第4条もしくは第5条の規定により特別永住者として許可された方。
    3 上記1及び2に該当する方のほか、「外国人登録法」(昭和27年法律第125号)第4条第1項の規定により登録し、かつ、出入国管理及び難民認定法に規定する在留資格を有する方で、賃貸借契約の内容を十分に理解できる方。

    So you have to have either (1) PR, (2) zainichi status or (3) BOTH a registered status of residence and an ability to understand the contract. I guess this functionally means that if you are not a permanent resident, you have to be able to demonstrate that you are “Japanese OK.”

  3. May I point out a great resource for finding good places to live –
    Real Tokyo Estate http://www.realtokyoestate.co.jp/
    although they tend to charge a lot of key money.

    I have 80 sq/m in Mitaka with parking, in a 20-year old house for 110,000.
    Hard to beat. There are lots of bargains out there if you look hard enough,
    and lots of unoccupied houses. Sorry to gloat.

  4. What’s so great about Real Tokyo Estate? They have only a small number of listings compared to the major sites like Forrent and Yahoo Real Estate, which also let you set conditions in great detail.

  5. Lame I did not see that last part. Guess I would qualify then, and that policy is fairer than the private sectors “it depends on the landlord” stance.

  6. “I guess this functionally means that if you are not a permanent resident, you have to be able to demonstrate that you are “Japanese OK.” ”

    I know a Mongolian musician(Chinese national)living in UR in Kashiwa,Chiba.His wife is a Japanese and his manager.I think what UR demanding is a lot more looser than ordinary land lord since they are not always keen to rend their estate to artists.

  7. I used Yahoo Real Estate for my last apartment search. It turned out to be surprisingly un-useful. I sent out inquiries on something like 20 apartments, and almost all of them were “no longer available” according to the agents who emailed me back. I ended up visiting one agent who seemed resourceful and he helped me find my current place (not listed on Yahoo for some reason), which I have really enjoyed.

  8. We’re moving next month to a house we found on either Yahoo or Forrent, but it’s true that some of the listings are old and that your local real estate office is more likely to have listings that have not yet made it to those sites. On the other hand, as we were riding around Kichijoji I pointed out two places to the realtor that he wasn’t aware of, which I knew from Yahoo. The next day, the realtor had them both listed.
    Moral: It’s best to use all resources available.

  9. Wataru, it does have its limits but there
    are some cool properties on there that just don’t make
    it onto forrent and other catch-all sites.

  10. I live in a UR apartment. The biggest issue was trying to be first in line when something opens up. That is the same issue I face right now trying to get a parking space for my car.

    Other than that, I am extremely pleased with UR so far. The wife is almost brand-conscious in her support: UR has a new building going up directly across from the Kachidoki Station stop on the Oedo Line, and she seems to point this out every time we are in Kachidoki.

  11. I personally love the waterfront UR developments in Tokyo–they’re spacious, modern and quite convenient to the center city area. The only problem is that the future Mrs. Joe is convinced that the land beneath them will liquefy in an earthquake and dump everything into the bay. I maintain that so long as you’re near the top of the building there should be nothing to worry about…

  12. I think Yahoo is the best online source for researching real estate, but because it’s so easy to post properties on the site, you have to be careful which agent you work — not hard if you look carefully because brokers typically work on a non-exclusive basis for finding customers for properties, so the same landlord will have multiple brokers. I know two people who found properties on yahoo and got with shady brokers. One of the tricks that shady brokers use to get people in the door is to post the same property as other brokers, but lower the price a bit, so potential renters think the shady broker has a better deal.

  13. Joe,
    I live in an 11-story UR apartment on a small reclaimed island. In the event of liquefaction, I don’t have high hopes for survival, and so I may just buy a couple of kayaks for the veranda.

  14. I found yahoo real estate somewhat useful for seeing what’s out there, but pretty much useless in practical terms. As said above, many of the good units were no longer listed, or the information wasn’t entirely accurate. It was far more productive to just walk or bike around the desired neighborhood and see what’s in the windows of real estate agents, or go inside and ask for some information.

  15. How useful the Web real estate sites are would seem to depend somewhat on the price and quality level you are looking for, and also how broadly you are looking geographically. Suppose you are willing to live, say, anywhere from Nakano to Kunitachi if you can find the right place. That situation makes it less practical to use Roy’s approach.
    As we get ready to move for the 10th time in the past 25 years, though, I really hope this will be the last time for quite a while.

  16. In my moving experience, it had been just about the same as Roy’s. The online listings look fantastic, and the aggregation of various agents’ listings is handy, however every time I pursued an appealing spot, it turned out to be long gone. I’m not living in Tokyo, and I can’t say I really know what it’s like there, but in Kyoto, even in older neighbourhoods (such as where I am) there are real estate agents everywhere, and the tried and true method of door-to-door comparisons (going to a bunch of different agents’ offices) by foot proved extremely fruitful in the end, albeit torturous in the summer heat.

  17. Of course, we are both in Kyoto. I really can’t say how it compares with the market in other parts of Japan since I’ve never lived anyplace else. So what are you doing in Kyoto?

  18. Has no-one managed to secure 都営住宅?
    A girlfriend of mine (not a sex girlfriend, just an amie)
    managed to get a 2LDK mansion in Minami Aoyama.

    waiting list is pretty horrendous though

  19. I’m living in Kyoto studying at Ryukoku University. I’m studying and researching a lot of things, but largely focusing on an economics degree there.

    The market in Osaka (where I lived before coming here) was equally diverse, but I found the general quality of the places to be quite a bit lower, considering the prices.

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