The Collective Action Problem in Japanese Condominium Reconstruction

Fukuju Yamazaki () and Taisuke Sadayuki ()
Additional contact information
Fukuju Yamazaki: Nihon University
Taisuke Sadayuki: Waseda University

International Real Estate Review, 2017, vol. 20, issue 4, 493-523

Abstract: Condominium reconstruction involves a difficult collective decision-making process among owners, which prevents older condominiums from being redeveloped efficiently. This paper aims to examine whether this type of collective action cost exists for Japanese condominiums. First, we discuss in the literature review and an empirical analysis that the number of units in a condominium complex is an appropriate proxy for the collective action problem. Then, by using the rent in the price function to control for housing characteristics, we show that the number of units has a negative impact on condominium price. Furthermore, the price function for condominiums is compared with that for single-owner rental apartments that are free from the collective action problem. The estimation results show that the number of units only negatively affects the price of condominiums and that the depreciation rate for the condominium price is greater than that for single-owner apartments. This finding is consistent with the hypothesis that a significant cost is associated with collective action problems in condominium reconstruction. Lastly, we conduct a comparative examination of condominiums in Japan and the United States, and the result suggests that revising the current Japanese condominium law could induce more efficient redevelopment of old condominiums.

Keywords: Condominium, Rental Apartment; Hedonic; Holdout; Collective Action; Development (search for similar items in EconPapers)
JEL-codes: L85 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.gssinst.org/irer/wp-content/uploads/20 ... m-erconstruction.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ire:issued:v:20:n:04:2017:p:493-523

Ordering information: This journal article can be ordered from
Global Social Science Institute, 9200 Corporate Blvd., Suite 420 Rockville, MD 20850
https://www.gssinst.org/gssinst/index.html

Access Statistics for this article

International Real Estate Review is currently edited by Professor Sing Tien Foo and Professor Ko Wang

More articles in International Real Estate Review from Global Social Science Institute Global Social Science Institute, 9200 Corporate Blvd., Suite 420 Rockville, MD 20850.
Bibliographic data for series maintained by IRER Graduate Assistant/Webmaster ().