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Evaluating the externality of vacant houses in Japan: The case of Toshima municipality, Tokyo

Author

Listed:
  • Taisuke Sadayuki

    (Faculty of Political Science and Economics, Waseda University. 1-6-1 Nishiwaseda, Shinjukuku, Tokyo 169-8050, Japan)

  • Yuki Kanayama

    (Graduate School of Economics, Waseda University, Japan)

  • Toshi H. Arimura

    (Faculty of Political Science and Economics, Waseda University, Tokyo, Japan, and Research Institute for Environmental Economics and Management, Waseda University, Tokyo, Japan)

Abstract

The Japanese housing market has experienced a rapid increase in the number of vacant housing units due to regulatory obstacles and a decreasing population. Vacant housing that is not adequately managed can cause a negative externality in the surrounding dwelling environment, such as illegal dumping of garbage and increased risks of arson and collapse. Few empirical studies exist on the externality of vacant houses because of data limitations. This paper investigates the externality by using a complete field survey conducted in Toshima municipality, one of 23 wards in Tokyo prefecture. We find that a vacant house devalues nearby rental prices by 1~2% on average, and vacant houses with some defects in the property cause greater externalities. Addressing vacant houses with combustible materials present could lead to an estimated increase in annual property tax income of approximately 120 million yen in total or 1.3 million yen per vacant house. Given the substantial number of existing vacant houses, local governments should discern the types of vacant houses causing serious negative externality based on empirical assessment and implement efficient countermeasures to address the issue.

Suggested Citation

  • Taisuke Sadayuki & Yuki Kanayama & Toshi H. Arimura, 2019. "Evaluating the externality of vacant houses in Japan: The case of Toshima municipality, Tokyo," RIEEM Discussion Paper Series 1901, Research Institute for Environmental Economics and Management, Waseda University.
    • Handle: RePEc:was:dpaper:1901
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    References listed on IDEAS

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    1. Gerardi, Kristopher & Rosenblatt, Eric & Willen, Paul S. & Yao, Vincent, 2015. "Foreclosure externalities: New evidence," Journal of Urban Economics, Elsevier, vol. 87(C), pages 42-56.
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    More about this item

    Keywords

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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