The Value Behind Japan's Stigmatized Properties

20 Aug, 2021 –

Located near Harbor View Park on high ground in Yokohama’s Yamatecho district, the headquarters for realtor Marks Inc. has a large window that lets sunlight fall over carefully chosen furniture. But the company is less known for its refined taste in seating than for an unusual service it provides: marketing stigmatized “jikobukken” properties to buyers and renters in search of more affordable or desirable options. Once thought of as impossible to sell, each of the properties is marked by a dark history. They were the sites of various unfortunate incidents, including the deaths of previous residents. But now, Marks’ Jobutsu Estate website, named after the Japanese word for “resting in peace,” is showcasing these properties rather than giving them a pass.

The homes often come at a discount–sometimes a substantial one. Jikobukken market prices are usually lower by about 10 to 50 percent. Koji Hanahara, 44, the company president, used to work for a major home builder, but he always found it odd to sell newly built homes when a growing number of residences in Japan sit vacant. Japan’s population is rapidly aging, with older inhabitants moving out or passing on, and fewer young people to move into the empty homes. Hanahara decided to quit that job so he could help “even more people.”

Major realtors include vague warnings on jikobukken listings, such as, “There is a problem to be informed about.” Previously, there were no specific rules for listing these kinds of warnings on jikobukken homes. But the land ministry released new guidelines in May stating that homicides and suicides must be specified in listings as “elements that should be informed of.” But even before that, Jobutsu Estate offered detailed explanations of jikobukken properties listed under seven categories. One jikobukken listing states that the resident “passed away alone and was not found dead for more than 72 hours.” Other homes are described as previous locations of “deaths from fires or accidents.” “I would like to make real estate transactions smoother by bringing such information out in the open–not covering it up,” said Hanahara.

Jobutsu Estate features 200 residences in the Kanto region around Tokyo. Only some of the homes are owned by Marks or listed by owners looking for new tenants. Most of the estates are handled by other brokers. Hanahara aims to grow the market for jikobukken homes. As that occurs, other real estate agents are granted permission to list their properties on Jobutsu Estate without commission fees. Marks has sold and rented out more than 60 of these kinds of properties within two years since the service started in April 2019. An investor bought one such home for 1.5 million yen ($13,600), after another real estate agency gave up on it, deciding it would be impossible to sell. One apartment where the resident died alone was renovated and purchased for almost the same rate as a non-discounted price. “Some people are opting to buy jikobukken as a smarter choice,” Hanahara said. “It was surprising for me.”

Hanahara hails from Hyogo Prefecture. He lived through the Great Hanshin Earthquake in 1995, which killed thousands of people. He joined a major home building company afterward with the aim of creating stronger housing. He worked as a sales representative and mainly reached out to wealthy individuals in Hyogo Prefecture and Yokohama. When he was 39, Hanahara became president of the predecessor of Marks in 2016, which pitched “posh properties in Yokohama.” Hanahara failed to put a price on his first jikobukken property. But despite that, he quickly became interested in them. He had a mother living alone in his family home, so Hanahara felt connected to the issue of elderly individuals dying alone at home.

Selling jikobukken was also an appealing business prospect because it would set them apart. “Simply doing the same thing as major firms would deprive us of our reason for existence,” Hanahara said. Some staff members initially opposed handling jikobukken out of concern it could undermine the corporation’s reputation. But selling the properties quickly proved successful. The company changed its name to Marks in January this year and started up its construction business, along with its SOS special cleaning program for jikobukken. It quickly grew into a business 15 employees strong.

Another challenge it still faces is that banks balk at extending loans to Marks so it can buy up jikobukken because they are considered to have lower social value and are assumed to be much less marketable. But now that Hanahara knows that strong demand exists for the stigmatized properties, he believes he can expand the market, and their appeal. And he has a much broader range of projects in mind for the future, such as catering to overseas sightseers through renting out vacant homes.

“I will turn ‘fudosan’ (adverse properties) into ‘fudosan’ (valuable properties),” he said. “The means for achieving that happened to be Jobutsu Estate for me. I still have many things I want to do.”

 

(Source: The Asahi Shimbun | Pic: Old House, Yoshizumi Endo)

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