Effects of Systems and Regulations on Residential Mobility

Miki Seko ()

Chapter Chapter 5 in Housing Markets and Household Behavior in Japan, 2019, pp 77-101 from Springer

Abstract: Abstract This study draws on three waves of Japan household longitudinal data (Keio Household Panel Survey, KHPS) and estimates a proportional hazard modelProportional hazard model to investigate the effects of two distinctive polices in Japan that influence residential moves. One is the implementation of an income tax deduction systemIncome tax deduction system regarding the carrying over of capital losses in 2004 for the carrying over of capital losses for owner-occupied households and the other is the Japan Rental ActJapan Rental Act for renter households. The former tax policy was devised to cope with the severe equity constraintsEquity constraints that followed the bursting of Japan’s asset Bubble in the early 1990s. The latter Rental Act (1921, amended in 1941) provides renters protection from eviction and is the basis for a court-arbitrated rent control system. The effect of this rent controlRent control system on residential mobility based on an estimate of the implicit subsidy resulting from the Rental Act is examined. It is found that both government policies have a strong impact on residential mobility. The implementation of an income tax deduction system linked to capital losses increases owners’ mobility, especially for those households with a large LTV (loan-to-value ratio).

Keywords: Residential mobility; Housing equity constraint; Japan rental act; Proportional hazard model; Income tax deduction; Capital losses; Rent control; LTV; Japanese bubble (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advchp:978-981-13-3369-9_5

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DOI: 10.1007/978-981-13-3369-9_5

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