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農林中金総合研究所

Norinchukin Research Institute Co., Ltd.

Progress and Obstacles to Housing Reconstruction in Disaster-hit Areas of Northeast Japan

TADA Tadayoshi1*, 2 1: Economist, Norinchukin Research Institute Co., Ltd.

*1-1-12, Uchikanda, Chiyoda-ku, Tokyo, 101-0047, Japan

Email: tada@nochuri.co.jp

2: Research Fellow, Meiji University

Key words: Housing Reconstruction, Mortgage application, Displacement, the Great East Japan

Earthquake

Two and a half years have passed since the Great East Japan Earthquake, the quake that occurred off the Pacific Coast of Tohoku in 2011. Disaster victims have begun reconstructing their homes. However, studies on the progress of reconstruction based on official statistics are nonexistent. To bridge this research gap, the current study presents the progress and obstacles to housing reconstruction in disaster-hit areas of Northeast Japan. This work analyzes time series data on the number of displaced people collected by the Reconstruction Agency as well as number of mortgage application available only to disaster victims provided by the Japan Housing Finance Agency (JHF), an incorporated administrative agency.

The number of displaced people reached 346,987 in July 2012. This number decreased by about 40,000 to 309,057 in April 2013. Meanwhile, temporary house occupants reached 136,057 in July 2012, and decreased by about 18,000 to 117,674 in April 2013. The numbers indicate that about 20,000 households are still in the process of reconstructing houses.

Next, the study focuses on the number of mortgage application to capture the progress of housing reconstruction. Application numbers can be regarded as the benchmark of progress among disaster victims in reconstructing their houses. According to data from JHF, applications peaked from the summer of 2011 to the autumn of 2012, followed by a declining trend. In addition, total applications reached 8,104, which is comparable to approximately 40% of disaster victims who escaped displacement and to 7% of those who reported totally collapsed houses in Northeast Japan. Although JHF data on application numbers do not cover those who take a loan from other regional/cooperative banks and those who have enough money to reconstruct their house, the study finds that the progress of housing reconstruction has lagged, given that around 300,000 people remain displaced. Moreover, the study analyzes local differences when the applications peaked. Data show that applications peaked during winter of

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農林中金総合研究所

Norinchukin Research Institute Co., Ltd.

2011 in the southern part of Northeast Japan, and during spring of 2012 in the northern part of Northeast Japan.

An analysis of the data yielded the following reasons for the slow pace of application and for regional differences: 1) difficulty in finding suitable land to rebuild homes, 2) time-consuming process entailed in following the necessary procedures for land tenure, 3) necessity to develop land, and 4) time-consuming process for those who had lived in tsunami-hit areas to agree on collective relocation plans. Moreover, people who could prepare the land and money needed for rebuilding have proceeded with reconstruction.

The study finds that the progress of housing reconstruction has temporally fallen at a slow pace, and its starting point is different by locality. Another finding is that only a few among the displaced people could reconstruct their homes. Although housing reconstruction is gradually progressing at a faster pace, it can be expected to take several years to be completed if obstacles to housing reconstruction are not addressed appropriately.

Progress and Obstacles to Housing Reconstruction in Disaster-hit Areas of

Northeast Japan

TADA Tadayoshi1*, 2 1: Economist, Norinchukin Research Institute Co., Ltd.

*Email: tada@nochuri.co.jp 2: Research Fellow, Meiji University

2013/08/01 1

Outline

Introduction 3 - 4

Research aim and Methodology 5

Displacement 6 - 8 Overall trend 6 - 7

Regional differences 8

Reconstruction and Mortgage Application 9 - 15 Overall trend 9 - 10

Peak Period of Mortgage Application by region 11 - 15

Obstacles to Housing Reconstruction 16 - 19 Demand Side 16 - 17

Supply Side 18 - 19

Conclusion 20

2013/08/01 2

Introduction Two and a half years have passed since the Great East

Japan Earthquake, the quake that occurred off the Pacific Coast of Tohoku in 2011.

Disaster victims have begun reconstructing their homes. Their options are;

Voluntarily relocation & Self-reconstruction (to build a detached house; to purchase a room of condominium/privately-owned flat)

Collective relocation & Self-reconstruction

To move into public housing (extra construction for the disaster)

To move into rental housing

2013/08/01 3

Focus here!

Still underway…

2013/08/01 4

80

100

120

140

160

180

2011.3＝100

Housing Starts in heavily tsunami-hit areas(12 month-backword moving averge, Mar-2011=100)

MiyagiPref.

FukushiamaPref.

IwatePref.

Source: Housing Starts, MLIT Note: Glay area indicates resession defined by CAO.

The quake

NationalTotal

Problem: Studies on the progress of reconstruction based on official statistics are nonexistent.

Research Aim & Methodology

• Aim of the study is

– presents the progress and obstacles to housing reconstruction in disaster-hit areas of Northeast Japan.

• Methodologies

– To analyze time series data on

• (1) the number of displaced people collected by the Reconstruction Agency

• (2) as well as number of mortgage application available only to disaster victims provided by the Japan Housing Finance Agency (JHF), an incorporated administrative agency.

2013/08/01 5

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000 M

ar-1

1

Jun-

11

Sep-

11

Dec

-11

Mar

-12

Jun-

12

Sep-

12

De

c-1

2

Mar

-13

Jun-

13

Temporary house occupants

Displaced people

Source: Reconstruction Agency of Japan

Max: temporal evacuees

Displaced People and Temporary House Occupants

• Mar. 2011: Temporal evacuees reached about 470,000.

• Jun. 2012: Displaced people (= Escaped temporal evacuation but still in the state of secondary evacuation; they occupy temporary house) reached the maximum, about 350,000.

2013/08/01 6

105,000

110,000

115,000

120,000

125,000

130,000

135,000

140,000

Jun. 2012 May 2013

Temporary house occupants

270,000

280,000

290,000

300,000

310,000

320,000

330,000

340,000

350,000

360,000

Jun. 2012 Jun. 2013

Displaced people

• The number of displaced people reached 346,987 in July 2012. This number decreased by about 40,000 to 298,033 in June 2013.

• Temporary house occupants reached 136,057 in July 2012, and decreased by about 20,000 to 115,663 in May 2013.

2013/08/01 7

▲40,000 ▲20,000

Comparing Jun. 2012 and May/Jun. 2013

Displaced people by prefecture

200

KM

Legend

Displaced people

by prefecture

15,000

30,000

5,000

Jun. 2012

15,000

30,000

5,000

Jun. 2013

2013/08/01 8

Except Miyagi Pref., Most of the red and blue rings are overlapped.

Most of displaced people are still facing difficulties in reconstructing their housing.

Mortgage Application in Northeast Japan • JHF Application numbers:

– A benchmark of progress among disaster victims in reconstructing their houses

– the disaster victims share: 40 – 50%? (unconfirmed)

• Applications peak: – From the summer of 2011

to the autumn of 2012, followed by a declining trend. Currently, it is temporally falling at a slow pace.

2013/08/01 9

0

0.3

0.6

0.9

1.2

1.5

1.8

2.1

0

200

400

600

800

1,000

1,200

1,400

Ma

r. -Ju

n. 2

01

1

Jul. -

Sep

. 20

11

Oct. -D

ec. 2

01

1

Jan. -M

ar. 20

12

Ap

r. -Ju

n. 2

01

2

Jul. -

Sep. 2

01

2

Oct. -D

ec. 20

12

Jan. -M

ar. 20

13

Billion USDNum.Num. of Mortgage Application

Loan Disbursement(bill. USD, RH)

Source: Data provided by JHFExchange rate: 1 USD = 100 JPY.

Total: 8,104

• Why do they apply the mortgage at slow pace? – They could received “Earthquake Insurance” in addition to

several donation. (=no need to finance)

– They are facing “obstacles” to (re)build house.

2013/08/01 10

Num. ％ Num. ％ Num. ％

Iwate 18,370 14.2 6,558 2.5 24,928 6.3

Miyagi 85,311 65.9 151,719 57.2 237,030 60.1

Fukshima 20,841 16.1 70,901 26.7 91,742 23.3

Others 4,869 3.8 35,918 13.5 40,787 10.3

Total 129,391 100.0 265,096 100.0 394,487 100.0

Source: FDMA, Ministry of Internal Affairs ans Communications

Pref.

Housing damage (As of 26-Mar-2013)

Totally

Collapsed

Half

CollapsedTotally + Half

124,522 96.2

Total application of JHF mortgage: 8,104

7% of those who reported totally collapsed houses

Regional differences of Mortgage Application

75

KM

Legend

City/W ard/Tow n/Villag e d iv.

500250100

10

KM

Source: Data provided by the JHF

Total Num ber ofMortg ag e App lication2011 - March 2013(Counted by rebuild ing p lace)

Pref. d iv (Northeast Japan)

• Costal areas = Tsunami-hit areas

– They reconstruct house where they lived or near they lived.

• Inland areas

– They build house where it is convenient for them to work, live, school, and so on.

2013/08/01 11

Peak Period of Application by city/town/village

80

KM

Legend

10

KM

City/W ard/Tow n/Villag e d iv.

Source:Data providedby the JHF

Peak Period ofMortg ag e App lication2011 - March 2013(Counted by rebuild ing p lace)

Pref. d iv(Northeast Japan)

Before Sep . 2011

Oct. - Dec. 2011

Jan. - Mar. 2012

Apr. - Jun. 2012

Jul. - Sep . 2012

Oct. - Dec. 2012

Jan. - Mar. 2013

• Moreover, the study analyzes local differences when the applications peaked.

• Data show that applications peaked during winter of 2011 in the southern part of Northeast Japan, and during spring of 2012 in the northern part of Northeast Japan.

2013/08/01 12

First Peak Period: -Dec. 2011

• Far from the tsunami-hit area (red areas)

• Inland areas, relatively large cities.

2013/08/01 13

80

KM

Legend

10

KM

City/W ard/Tow n/Villag e d iv.

Source:Data providedby the JHF

Peak Period ofMortg ag e App licationThe quake - Dec. 2011(Counted by rebuild ing p lace)

Pref. d iv(Northeast Japan)

Before Sep . 2011

Oct. - Dec. 2011

Jan. - Mar. 2012

Apr. - Jun. 2012

Jul. - Sep . 2012

Oct. - Dec. 2012

Jan. - Mar. 2013

• Some costal areas reached the first peak of application.

• Sendai metropolitan area

2013/08/01 14

80

KM

Legend

10

KM

City/W ard/Tow n/Villag e d iv.

Source:Data providedby the JHF

Peak Period ofMortg ag e App licationJan . - Jun . 2012(Counted by rebuild ing p lace)

Pref. d iv(Northeast Japan)

Before Sep . 2011

Oct. - Dec. 2011

Jan. - Mar. 2012

Apr. - Jun. 2012

Jul. - Sep . 2012

Oct. - Dec. 2012

Jan. - Mar. 2013

First Peak Period: Jan. 2012 - Jun. 2012

80

KM

Legend

10

KM

City/W ard/Tow n/Villag e d iv.

Source:Data providedby the JHF

Peak Period ofMortg ag e App licationJul. 12 - Mar. 13(Counted by rebuild ing p lace)

Pref. d iv(Northeast Japan)

Oct. - Dec. 2011

Jan. - Mar. 2012

Apr. - Jun. 2012

Jul. - Sep . 2012

Oct. - Dec. 2012

Jan. - Mar. 2013

• Middle-South Iwate inland areas; slowest among three prefectures?

• Peripheries of Sendai

• Why do these spatial patterns emerge?

• What obstacles are?

2013/08/01 15

First Peak Period: Jul. 2012 - Mar. 2013

Obstacles: Demand Side (1)

2013/08/01 16

1. difficulty in finding suitable land to rebuild homes,

2. time-consuming process entailed in following the necessary procedures for land tenure,

Red & Shade: forest area and

steep slope

Olive green: flat area

Obstacles: Demand Side (2)

3. necessity to develop land, and

4. time-consuming process for those who had lived in tsunami-hit areas to agree on collective relocation plans.

2013/08/01 17

3 4

Photograph by the author in Dec. 2012 in Arahama Area, Sendai City

Employees at Construction sector have already decreased since 1995.

2013/08/01 18

01234567

1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5

2011 2012 2013

Iwate Miyagi Fukushima National

Source: Active job openings-to-applicants ratio (Seasonally adjusted), Employment referrals for general workers, The Ministry of Health, Labour and Welfare

50

60

70

80

90

100

110

120

130

1970

1975

1980

1985

1990

1995

2000

2005

2010

Employees at Construction Sector

（Rebased; 1980 ＝ 100）

Source: Population Census, Statistics Bureau

Miyagi Pref.

Fukushima Pref.

Iwate Pref.

National Total Active job openings-to-applicants

ratio of architect/civil engineer highly exceeds more than 2.5 in total.

Obstacles: Supply side (1): Lack of professional/skilled workers for construction

859095

100105110115120125130135

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

2010 2011 2012 2013

Ready mixed concreteConcrete blocks for constructionPlywood for general use Glued laminated timberlumber 1lumber 2

Source: Domestic Corporate Goods Price Index, Corporate Goods Price Index (CGPI) (2010 base), The Bank of Japan

The quake

2013/08/01 19

70

75

80

85

90

95

100

105

110

70

80

90

100

110

120

130

140

150

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

2010 2011 2012 2013

lumber; North America lumber; Russia lumber; Europe

Imported Plywood Imported laminated timber USDJPY (Right Scale)

Source: Import Price Index, Corporate Goods Price Index (CGPI) (2010 base), The Bank of Japan

The quake

Obstacles: Supply side (2): Climbing up material prices D

om

esti

c C

orp

ora

te

Go

od

s P

rice

Ind

ex

(20

10

= 1

00

)

Imp

ort

P

rice

Ind

ex

(20

10

= 1

00

)

Conclusion

• The study finds that; 1. the progress of housing reconstruction has

temporally fallen at a slow pace, and 2. its starting point is different by locality. 3. Another finding is that only a few among the

displaced people could reconstruct their homes. [Future prospects] Although housing reconstruction is gradually progressing at a faster pace, it can be expected to take several years to be completed if obstacles to housing reconstruction are not addressed appropriately.

2013/08/01 20

Thank you for your kind attention!

tada@nochuri.co.jp

2013/08/01 21

A view of Sendai City Center from Arahama Area, Sendai City

Photograph by

the author in Dec. 2012

[Explanation] Conference Name: The 8th Japan-Korea-China Joint Conference on Geography

Venue: Hakozaki Campus, Kyushu University, Fukuoka, Japan Date: Jul. 31, 2013 - Aug. 4, 2013

Program:

http://file.geographers.asia/8thcon/Program(ver2013.07.25).pdf Conference Web：

http://8thcon.geographers.asia/

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