Housing policies in Japan after World War II were focused on the quantitative supply of houses to address the backlog of 4.2 million units. Japan’s housing policy in the latter half of the 20th century comprised three pillars with a wide range of targeted groups: public rental houses, the Japan Housing Corporation (now the Urban Renaissance Agency [UR]), and the Government Housing Loan Corporation (now the Japan Housing Finance Agency [JHF]).

The restoration of the housing stock was successful in that the total number of houses exceeded that of households in the mid-1960s, but the collapse of the property bubble in the early 1990s had a negative impact on the real economy and created persistent loss of confidence among the Japanese people, which was exacerbated by deflation and negative demographic factors (decrease of the population and aging of society).

Enhancement of the quality of houses became an important part of housing policy in Japan in the 21st century, but, at the same time, there needs to be a balance between new construction and the activation of existing housing stocks. In this paper, we explain the current status of the housing market in Japan, and discuss and evaluate the housing policies in the 20th century. We then explain the challenges of the housing market and housing policies in the 21st century, and draw some implications for other countries, and then conclude.

The homeownership ratio in Japan was 61.7% in 2013. The level has been around 60% for nearly the last half century, with minor fluctuations, which is almost the same as the United States (US), (64.0% in 2014), the United Kingdom (UK) (64.6% in 2013), and France (64.3% in 2013), but higher than Germany (52.6% in 2013). Owner occupancy was not a major form of tenure in Japan before World War II and many people, especially in metropolitan areas, lived in rental properties, although there are no official statistics at the national level. The ratio of the value of land to the national net worth2 was 30%–40% before the war, but increased to 50%–70% after, which illustrates the strong demand and subsequent increases of land prices after the war.