New for old
A global shortage of later-life housing is looming on the horizon. How can we build a sufficient supply of new housing for the retired?
30 APR 2018
Japan, so often our default reference for the world’s urban future, could now point to the fate of our rural areas, too.
A combination of decades-long rural flight and an ageing population is hollowing out the Japanese countryside, and government policy seems powerless to stop it. The seeming inevitability of rural decline poses a conundrum that developed economies across the world will soon have to get to grips with: is this a fight we can win?
Between 1950 and 2015, the proportion of Japan’s population living in urban regions shifted from 53.4% to 93.5%. On top of this, Japan’s overall population is declining – it fell by 403,000 in 2017 – and is declining fastest in the largely rural north of the country, where prefectures such as Aomori, Akita and Iwate are losing about 1% of their local populations every year.
With so many young people flocking to the cities, it is largely the older generation who are left behind. In a report published in February 2017, the country’s Ministry of Internal Affairs estimated that in 15,000 of Japan’s 65,000 settlements, more than half the local population was over 65 years old. The Japanese call these places genkai shu¯raku – “communities on the edge”.
In 15,000 of Japan’s 65,000 settlements, more than half the local population was over 65 years old. The Japanese call these places genkai shu¯raku – “communities on the edge”.
Rural decline as a consequence of depopulation was officially recognised in the 1960s and 1970s, but despite Japan’s local authorities pouring money into regeneration efforts, these regions have continued to shrink. In fact, depopulation has deepened and broadened to affect even regional towns and cities with populations of up to a million people. This is in no small part due to the destabilising effect of Tokyo.
In a 2010 paper called Coming Soon to a City Near You!, senior lecturer in Japanese studies at the University of Sheffield, Peter Matanle, described the shrinkage as “inevitable” and that some rural communities presently on the verge of collapse “will in the near future disappear altogether”.
Matanle explains that there are short- and long-term forces at work: on the one hand, these communities are suffering a net loss due to net outward migration; on the other, there are too few babies being born and too low a level of immigration to replace those that leave. “Rural Japan has lived with both of these for decades. Communities stop seeing a future for themselves,” he says.
Local authorities have tried consolidating services to draw populations into tighter communities, and some have incentivised older people to move through rehousing schemes. “But,” says Matanle, “one of the issues with consolidation into geographically larger units is that the outlying peripheral communities become even more dislocated.”
It is a vicious circle: as services retreat and institutions such as schools merge or close, with them go the traditional routes into employment. Overcapacity is a huge problem. Excess housing stock, underused infrastructure and unmanaged farmland dot the townscape; once valuable land has become worthless and potentially hazardous for those still living there.
“Empty structures are a big problem,” says Matanle, “but they’re only partly a result of depopulation. Land that doesn’t have a structure on it has a higher rate of taxation than land that does. That worked when Japan wanted to develop rapidly, but it doesn’t work now. These abandoned structures are very expensive to take down. People forget about them – often land is nominally owned and the owners live miles away in Tokyo.”
In January, the Financial Times reported that 20% of Japan – an area the size of Denmark – has no contactable owner. “This is land that could be consolidated to make farming more efficient or to reforest,” says Matanle, “but the problem is that the legal structures and fiscal incentives are unsuitable for the situation Japan finds itself in.”
When it comes to business, the Japanese government has tended to use fiscal grants to shore up employment in rural areas. Though well intended, the effect has often been to encourage businesses to locate to areas that make no real commercial sense and effectively drain taxation and resources into a company that probably has a head office in Tokyo. The types of jobs it has subsidised have focused on low-skilled construction and manufacturing work, which has done little to build up diversity or creative capacity in the community, or create the kinds of jobs for which young people will stick around, says Matanle.
There are echoes of this everywhere in the developed world. In the UK rural economies are reliant on goods exporters, with almost one in four private sector businesses in agriculture, mining or manufacturing – compared with 4% in city centres. Trading Places, a report published by thinktank Centre for Cities in 2016, found that the number of goods-exporting businesses is declining in all regions. Rural areas are especially vulnerable: those that have responded well have been able to offset this decline by growing their share of services exporters – and service exporters, especially high-skilled ones, “show a very clear preference for an urban location”, finds the report.
Paul Swinney, Centre for Cities’ head of policy and research, says: “Cities in the 1960s and 1970s weren’t that attractive to business, but as we’ve moved to the knowledge economy, companies are looking for city centre locations. They want access to workers and networks of other highly skilled businesses. Rural areas don’t offer that.”
According to Nick Gallent FRICS, head of the Bartlett School of Planning at University College London, UK rural communities face a double bind: remain isolated or attract counter-urbanisers.
Your typical counter-urbaniser is a city dweller looking to retire to the country, buy a second home or to get more space for their money. “They exploit the rent gap and in doing so help raise local property values, which get calibrated against the wealth that’s coming rather than local earnings,” says Gallent. For the 11 million people who live in rural Britain, house prices are now, on average, 20% higher than in urban areas.
These are typically places where the land-based economy has declined but which have been successful in attracting tourists based on their local heritage and landscape. “But to survive, a rural community needs a balanced population,” says Gallent, “and that requires a well-stratified housing market.”
It is a vicious circle: as services retreat and institutions such as schools merge or close, with them go the traditional routes into employment.
In St Ives, Cornwall, where around 25% of housing is second homes, locals feel locked out of the market. The town council has responded to this challenge by drawing up a Neighbourhood Development Plan that requires all new-build housing to be occupied by full-time residents, 270 days a year.
Gallent says the move is to be applauded but explains that there may be unintended consequences: local housebuilders may simply decide to move outside the restricted area, where they can make more profit; the reduced supply of new-build overall drives up second-hand prices, benefiting existing owners, but doing little for those seeking to buy for the first time who now have less chance of accessing the second-hand market.
Rural housing markets are a burgeoning problem. Right to Home?, published in July 2017 by the Institute for Public Policy and Research, reports that from 2010 to 2016, rural local authorities recorded a 32% rise in homelessness. The Rural Coalition – which combines 12 UK bodies, including RICS – has called for 7,500 affordable housing units for young families to be built a year to stop villages becoming “enclaves for the wealthy”.
But in reality, “politicians can’t make big claims about the revival of the rural economy because there are very few policy tools they can use to bring this about”, says Swinney.
The picture is starker in the US. In late 2017, the Wall Street Journalran a series of articles on the country’s increasing rural-urban divide. “The fact that the WSJdid that was surprising,” notes Lisa Pruitt, professor of law at the Center for Poverty Research, University of California, Davis. “It was as if people said: ‘Oh my gosh what happened to rural America when we weren’t watching?’”
Roughly one in seven Americans lives in rural communities. Pruitt suggests that, as the US has become an urban-focused nation, the countryside has now replaced the inner city on the frontline of socio-economic deprivation. “We have to have new strategies for overcoming rural poverty,” she says.
Early signs that the Trump administration will be any different do not look promising. In January 2018, the White House announced that it will support state efforts to impose work requirements on Medicaid eligibility, which is to say that the poor and disabled Americans who are currently eligible for these health benefits will now have to prove employment in order to access them. For Pruitt, this is another example of overlooking the realities of rural America: “The job markets in these places tend to be really crummy, so if you’re telling rural people they can only get a benefit if they have a job, you are setting everyone up for failure. If you are proposing a law, you need to look at how it is going to play out in rural places, and we don’t do that in the US.”
Faced with these circumstances, rural communities the world over have taken things into their own hands. Karl Kullmann, associate professor at the College of Environmental Design, University of California, Berkeley, who has researched the Wheatbelt region of Western Australia, says that many towns “create or grow an annual event to bring people in and, in extreme cases, towns have resorted to leasing or selling houses at peppercorn rates on the proviso that the recipient live in the town”.
Others have literally invested in art to save themselves. The Wheatbelt town of Kellerberrin used artist-in-residence scholarships to generate an international profile. Nearly 1,900 miles (3,000 km) away in western Victoria, Natimuk – population 514 – promoted cheap accommodation and studio space, as well as its proximity to a nearby rock-climbing mecca, to attract a temporary population big enough to provide economic stability.
Kullmann himself has advocated a more radical strategy in his work for the Wheatbelt town of Perenjori, by intentionally designing for decline over a 20-year period. The main street would be given a facelift and the town gradually consolidated to bolster community life – sports facilities are moved closer to the centre and reconfigured away from the team sports that the town no longer has the critical mass to support. A timeline plans for a progressive demolition of unused structures and a gradual decommissioning of services that do not destroy the town’s sense of place.
It is an approach that would chime with Matanle. He says in Japan good practice also tends to take place at a grassroots level, where people are “managing decline by not trying to grow”. He points to local initiatives such as solar farms (box, opposite), which have the potential to earn the town money through sales of electricity back to the grid, as well as propagate skilled jobs in sectors in which young people might want to work.
Matanle accepts that the prevailing bias towards growth makes it hard for local administrations to “talk about shrinkage as a good thing”, but he says the idea that it needs a solution – or that the solution is more people – is problematic. “Since the 1960s [the trend has] been relentlessly downward. Every single government policy that’s been thrown at rural Japan has failed. You can view that as a problem or you can see it as an inevitability that needs a different approach – it’s not a given that depopulation has to produce uncomfortable outcomes.”