Cranes

Considering that Japan had undergone consecutive recessions in the Nineties, it would appear unusual to see so much construction. Nonetheless, cranes are everywhere I visit in Tokyo. Part of this may be that I have only visited the wealthier communities of Tokyo (the southwest), but locals have explained that much of the deflation avoided Tokyo in the last ten years.

Tokyo is still a low rise city. Many large buildings have been built in the last ten years. Since there are no building codes that I can tell of, small apartment building will abut massive forty story office buildings. Buildings are, on average, six to ten stories in the core of Tokyo (I have visited). While this feels like outer neighborhoods in New York City, there is no place like Midtown. Shinjuku feels like a poor substitute.

I also figured out one of the main driving forces behind ridiculous real estate prices here in Tokyo. Any foreigner not from New York City will point to the lack of land. This may be, but businesses frequently pay for employee's housing pre-tax. Imagine the discount on housing in a country where taxes recently were 70+% for the wealthy. Of course, like the tax credit system in the United States for primary mortgage holders, this in turn drives up the price of real estate. While this Japanese tax loop hole is not as prevalent as the mortagage deduction in the United States, it must have driven large rises in the last twenty years.

One final note: there is no deduction of mortgage interest in Japan, like the United States. Thus, buying a home is much less advantageous. If anything, you can afford less.