Frantic Search for Kobe Housing Roils Market

Hiroshi Murakami’s post-earthquake struggle began when he rescued his wife from the rubble of their home here. Now he is struggling to stave off a bidding war for housing that threatens to impede a frantic search by as many as 150,000 families to find a place to live.

Murakami, 75, the deputy chairman of the prefectural (state) real estate dealers association, said large construction companies seeking contracts to rebuild Kobe are trying to tie up all available housing for the technicians and experts they will dispatch here.

“They are throwing money in our faces,” said Murakami, who also runs a real estate office.

Already, three large construction companies have “offered to pay anything,” Murakami said. A representative of one of the companies said it would pay 1 1/2 times the normal agent’s fee, deposit and rent for any living unit that Murakami could arrange for its employees, he said.

Any real estate agent in the prefectural chapter of the association who accepts such payments will be expelled, Murakami declared angrily.

Toshikazu Asano, an executive of Seiyo Construction Co., a small company that is now busy repairing roof tiles in Kobe, acknowledged that his firm has been trying to round up rental units to house its workers.

“But we haven’t been able to pin down a single apartment,” he said. “It’s the construction giants that have been making the big moves.”

“The construction industry will be able to keep food on its table for more than five years” with orders from the Kobe area, said Tomohiko Shimizu, a staff official of the Tokyo stock market. On Tuesday, the government of Hyogo prefecture, where Kobe is, said damage in the prefecture is now estimated at $92.4 billion. Damage throughout the devastated area stretching from the western edge of Osaka to Awaji Island is unofficially estimated at $100 billion or more.

Murakami also said he is worried that outside speculators might come into the areas of devastation to try to buy up land cheaply and reap profits later. But he added that an increase in land prices is inconceivable for the foreseeable future.

Since Japan’s “bubble economy” of the late 1980s burst, land prices in Kobe have plummeted by about 50% on average, and by as much as 70% in some locations, he said. The earthquake makes a further decrease of 30% likely, he said.

“Nobody is going to want to live in an area as fearful as this,” Murakami said.

Demand for rental homes, however, has swamped the market, Murakami said. His own real estate operation has no listings of homes and only a few for apartments or rooms. He said he intends to offer the rooms only to the aged or the infirm.

Instead of taking an apartment for himself and his wife after the quake destroyed their home, he moved in with his son, Murakami said.

Signs of an impending crisis over housing are appearing everywhere--but some signs are heartwarming. Hundreds of Japanese from around the country are offering free temporary rentals for up to a year. So too are governments in other regions of the country.

Tokushima prefecture, across the Inland Sea from Kobe on the island of Shikoku, not only offered free rental housing but sent its own officials to hand out leaflets on street corners in central Kobe on Monday.

Other developments, however, are not as charitable. Murakami said that media reports of 50% increases in rents in Kobe are not true, but he noted that leaflets and posters appearing everywhere are offering condominiums for sale or apartments for rent in Osaka and other areas “at prices that can hardly be called philanthropy.”

“From the bottom of our hearts, we offer our deepest sympathies,” began one leaflet before going on to advertise a 612-square-foot apartment for $3,275 a month, with a deposit of $30,000.

Murakami predicted that as many as 150,000 households from Kobe, Amagasaki, Ashiya, Nishinomiya and other cities in the devastated area will be seeking new housing.

On Monday, Kobe officials reported that they had received 37,980 applications for the 2,689 temporary living units they have announced they will provide rent-free. Applications will be accepted through Thursday.

On Tuesday, the city’s earthquake countermeasures headquarters said inspectors have declared 49.1% of multifamily dwellings “dangerous and unsafe to enter” or “requiring caution to enter and unfit for living.”

Even as Murakami spoke, a man in his 40s who identified himself as Hidemasa Kitaura came in and asked if Murakami had “even a one-room apartment.” He said he and his 73-year-old mother have been living in a refugee center in a school gymnasium since the Jan. 17 quake destroyed the apartment they had been renting.

“It’s cold in the gymnasium. My mother is old, and she is getting more and more worried. We applied for (the government’s) temporary housing, but there is no telling when that might become available,” Kitaura said. He had been making the rounds of real estate offices for three days, he said.

Murakami offered him a one-room apartment for $600 a month and a deposit of $6,000, but Kitaura said he would look elsewhere.

With so few rentals or sales to handle, Murakami said he has cut his employees’ salaries in half. “We don’t know when we may get our next (real estate agent’s) fee,” he said.

Problems also have arisen over the inability of landlords and tenants to find each other. Many are among the 270,000 refugees scattered in evacuation centers throughout the devastated area, while some have gone to other cities to seek refuge, he said.

In the long term, however, the disaster may provoke land reforms that until now have proved impossible. Kobe real estate agents, for example, have been pressing the government for years to end preferentially low real estate taxes on farmland in the middle of the city in order to create more land for housing and for roads. Now, the case for reform has strengthened, Murakami said.

After Kobe was bombed during World War II, the city failed to modernize and instead rebuilt its old 10-foot-wide streets, roads that now prevent rescue vehicles from getting to the sites of disaster damage, Murakami said.

“If we are going to make Kobe a disaster-proof city, we will have to broaden streets to 30 feet and expand parks and open spaces. That means the government will have to buy a lot of land from the residents,” he said.