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

Taisuke Sadayuki, Yuki Kanayama and Toshi Arimura
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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

RIEEM Discussion Paper Series from Research Institute for Environmental Economics and Management, Waseda University

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.

Keywords: External diseconomy; Dilapidated house; Empty house; Dwelling environment; Hedonic (search for similar items in EconPapers)
JEL-codes: H23 Q53 R1 R31 R5 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2019-03
New Economics Papers: this item is included in nep-ure
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