collective relocation, land, mainichi shinbun, planning, relocation

Developers inflate land prices in upland parts of tsunami-hit areas, mainichi, 9/20/12

Developers are snapping up land plots in upland areas of tsunami-hit coastal cities in the Tohoku region at inflated prices, pushing up land values and hampering local governments’ mass relocation plans, it has emerged.

According to the Ministry of Land, Infrastructure, Transport and Tourism’s standard land price report for 2012, which was released on Sept. 19, land plots in Iwate and Miyagi prefectures made the top 10 list of highest appreciation rates for residential properties, while four land plots in Miyagi Prefecture ranked in the top 10 list of those rated for commercial zones.

The survey indicates that property prices in the Tohoku region are on the recovery track in the wake of the March 2011 earthquake and tsunami, but that soaring land prices could trigger a shortage of land suitable for local municipalities to relocate residential areas to and affect their efforts for recovery.

In June, the Rikuzentakata Municipal Government in Iwate Prefecture decided to relocate three junior high schools that were hit by the tsunami in March last year and were eventually consolidated, to an upland forest and farming area. However, part of the land plot that the city was planning to purchase — about 4,000 square meters — had already been subject to acquisition negotiations between a major home builder and the land owner. According to sources close to the matter, the home builder is offering a purchase price of 10,000 yen per square meter — nearly 10 times the price that the central government pays when buying land to construct roads in mountain areas.

The municipal government was forced to change its relocation plans and subsequently moved the planned construction site to the north. “Land owners may well want to sell their land to those who would purchase it at higher prices, but the government cannot fork out such hefty prices as private companies do,” said Rikuzentakata Vice Mayor Takashi Kubota. An official with the city board of education also expressed concern, saying, “Even though they are private companies, they should take local governments’ plans into consideration when they purchase land.”

Such free acquisition of land by private corporations could also affect moves to relocate residential areas to upland areas. In part of the city of Ofunato, which neighbors Rikuzentakata, candidate sites for the city-led collective relocation to upland areas have already fallen prey to companies’ land acquisition bids.

Because flat land is limited in coastal areas in Iwate Prefecture, the companies’ moves are feared to lead to soaring land prices. While the prefectural government is authorized to set up “monitoring areas,” in which land developers are required to declare beforehand the purpose of use of the land and transaction prices, it is not empowered to abort land purchase contracts. “We have no choice but to call for fair price deals through our public relations office,” said an official with the prefectural government.

Meanwhile, the demand for relocation to inland and upland areas is growing in Miyagi Prefecture. In the city of Ishinomaki, whose commercial land appreciation rate ranked at the top of the country at 11.8 percent, the popularity of the Kokucho district is booming as areas for building condominiums for disaster victims.

A real estate operator in the city testified that the land that remained unsold before the March 2011 quake disaster has since sold out. However, many disaster victims are elderly people, and those who can not afford to buy their own houses have limited options. “The home boom won’t last long,” said the realtor.

The appreciation rate of land prices in the Kokubuncho area in Sendai’s Aoba Ward — a busy shopping and entertainment district in the heart of Sendai — marked 5.4 percent, becoming the eighth highest in the country. “The consumption here has been invigorated thanks to the influx of companies for reconstruction projects,” said a real-estate appraiser.

About liz

from the u.s., recently moved from kobe to sendai, japan, researching community-based housing recovery after disaster.

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