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Land Tenure Security and Home Maintenance: Evidence from Japan

Author

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  • Shinichiro Iwata

    (Faculty of Economics, University of Toyama)

  • Hisaki Yamaga

    (Graduate School of Systems and Information Engineering, University of Tsukuba)

Abstract

This paper considers two land tenure modes. leasehold and freehold. and models housing maintenance incentives under land tenure security in Japan. Compared with freeholders, leaseholders are equally likely to remain in the premises, but spend less on home maintenance, because leaseholders are not full residual claimants, even under land tenure security. The empirical results show that maintenance expenditures of leaseholders are about 30% lower than those of freeholders in the Japanese residential land market. Empirical evidence also indicates that leaseholders are equally likely to remain in their premises even when they undermaintain their dwellings.

Suggested Citation

  • Shinichiro Iwata & Hisaki Yamaga, 2007. "Land Tenure Security and Home Maintenance: Evidence from Japan," CIRJE F-Series CIRJE-F-520, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2007cf520
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2007/2007cf520.pdf
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    References listed on IDEAS

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    1. Sumner J. La Croix & James Mak & Louis A. Rose, 1995. "The Political Economy of Urban Land Reform in Hawaii," Urban Studies, Urban Studies Journal Limited, vol. 32(6), pages 999-1015, June.
    2. Fry, Maxwell J & Mak, James, 1984. "Is Land Leasing a Solution to Unaffordable Housing? An Answer from Fee Simple versus Leasehold Property Price Differentials in Hawaii," Economic Inquiry, Western Economic Association International, vol. 22(4), pages 529-549, October.
    3. Sweeney, James L., 1974. "Housing unit maintenance and the mode of tenure," Journal of Economic Theory, Elsevier, vol. 8(2), pages 111-138, June.
    4. Shinichiro Iwata & Hisaki Yamaga, 2009. "Land Tenure Security and Home Maintenance: Evidence from Japan," Land Economics, University of Wisconsin Press, vol. 85(3), pages 429-441.
    5. Steven R. Grenadier, 2005. "An Equilibrium Analysis of Real Estate Leases," The Journal of Business, University of Chicago Press, vol. 78(4), pages 1173-1214, July.
    6. Paul K. Asabere, 2004. "The Pricing of the Emergent Leasehold (Possessory) Estates of Ghana," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(4), pages 673-694, December.
    7. Gyourko, Joseph & Linneman, Peter, 1990. "Rent controls and rental housing quality: A note on the effects of New York City's old controls," Journal of Urban Economics, Elsevier, vol. 27(3), pages 398-409, May.
    8. Ian J. McDonald, 1969. "The Leasehold System: Towards a Balanced Land Tenure for Urban Development," Urban Studies, Urban Studies Journal Limited, vol. 6(2), pages 179-195, June.
    9. Capozza, Dennis R & Sick, Gordon A, 1991. "Valuing Long-Term Leases: The Option to Redevelop," The Journal of Real Estate Finance and Economics, Springer, vol. 4(2), pages 209-223, June.
    10. Paul Kwadwo Asabere, 1981. "# The Determinants of Land Values in an African City: The Case of Accra, Ghana," Land Economics, University of Wisconsin Press, vol. 57(3), pages 385-397.
    11. Jimenez, Emmanuel, 1984. "Tenure Security and Urban Squatting," The Review of Economics and Statistics, MIT Press, vol. 66(4), pages 556-567, November.
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    Cited by:

    1. Bracke, Philippe & Pinchbeck, Ted & Wyatt, James, 2014. "The time value of housing: historical evidence from London residential leases," LSE Research Online Documents on Economics 64504, London School of Economics and Political Science, LSE Library.
    2. Shinichiro Iwata & Hisaki Yamaga, 2009. "Land Tenure Security and Home Maintenance: Evidence from Japan," Land Economics, University of Wisconsin Press, vol. 85(3), pages 429-441.

    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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