Zoning and Lack of NIMBYism Is the Real Driver of Japanese Housing Prices

The major discourse in American politics today centers around affordability. And when people say affordability, most are specifically talking about housing. It’s becoming increasingly hard for young Americans to purchase a home, and that frustration is boiling into national politics.

But Japan has the opposite problem, a massive surplus of homes, flat prices, and in many regions (especially outside of major metros) values that actually depreciate over time.

The classic explanation is demographics: shrinking population, shrinking demand. But this can’t be the full story. Look at South Korea, also shrinking population, also aging, yet home prices remain high and ownership is still out of reach for many young people. So what’s going on?

A major piece of the puzzle is zoning.

Japan’s zoning system is unique in the modern world

Japan has basically erased the conditions that allow NIMBYism to exist.

In the United States, roughly 89,000 local governments can effectively invent their own zoning systems. Every town, village, and county adds its own layer of regulation, hearings, environmental reviews, minimum lot sizes, down-zoning, endless appeals, and each layer gives neighbors more tools to oppose development.

And importantly all these meetings and reviews drive up cost, which gets passed on to the future renters or buyers of these developments.

Japan went the opposite direction.

Japan has one national zoning system with 12 categories.
Local governments don’t have the authority to create ad-hoc, ultra-restrictive zoning to block new housing.

Most development in Japan happens “as-of-right.”
If a developer’s plan meets the requirements of the national zoning category, local officials are expected, not encouraged, to issue the permit.
No community hearings. No multi-year environmental review. No endless appeals. No neighborhood veto.

That makes NIMBYism nearly impossible. Your local boomers can’t freeze building to artificially drive up the value of their own homes. Even if residents complain to city hall, there’s almost nothing the local officials can do.

Combine this weak local intervention power, no minimum lot sizes, and a high post-war inheritance tax that forced families to subdivide land, and you get the dense, walkable, transit-connected suburbs we see across Japan today.

Compare that to the United States

In the US, zoning prioritizes exclusivity rather than housing production.

• Roughly 75% of residential land in US cities is zoned exclusively for detached single-family homes
• Many suburbs require large minimum lot sizes (¼–1 acre is common), making multi-family development financially impossible
• Lengthy community hearings allow neighbors to veto projects regardless of their compliance with zoning
• Landmarking protections, while culturally valuable, frequently block redevelopment in high-demand areas

The City of New York alone has more than double the number of landmarked buildings than the entire country of Japan. And even where Japan does landmark buildings, the designations often don’t prevent teardown or modification, the rules simply don’t have the same teeth.

And the results show up clearly in construction numbers:

By some measures, Tokyo’s annual housing starts roughly equal the combined starts of New York City + Los Angeles + Boston + Houston.

That production, year after year, is a huge reason why Tokyo is one the most affordable big cities in the world.

But is Japan’s system actually better?

As a homeowner in both the US and Japan, I genuinely don’t know.

On one hand, the Japanese model clearly works for affordability, supply, and livability. Cities feel connected, walkable, vibrant. You’re rarely siloed miles away from a supermarket or convenience store. Mixed-use zoning creates neighborhoods that feel alive.

But, I don’t love the idea that the federal government can decide the fate of my community with zero local input. That doesn’t feel democratic. I understand why some people want the community to have a voice.

But, in the town next to me, every member of the zoning board has to approve a project for it to move forward, a unanimous vote.

Recently there was a proposal to convert an old office building next to the train station into apartments. Literally the perfect location for new housing in a town begging for it. Every board member voted yes… except one. A single 90-year-old dissented, and because the rules require unanimity, the project died.

That’s all it took. One person’s feelings outweighed the needs of thousands of renters and young families, and the result is predictable: housing prices and rents continue climbing with no sign of slowing down.

So the American model clearly isn’t working either.

So what would the ultimate zoning model look like?

If I could Frankenstein the pieces that do work into one system, maybe it would look something like:

A national zoning baseline

• This allows for a board of experts to be in charge of Zoning, instead of a local 90 year old who shuts down building development because they want to preserve the character of there town.

• Mostly mixed-use, transit-oriented, gentle density allowed everywhere
• Duplexes, triplexes, townhouses and mid-rise buildings legal by default

Local design input, not local veto power

• Residents can influence aesthetic and neighborhood integration, not whether housing is built at all

A “supermajority veto” failsafe

• If ~70% of the community deeply opposes a specific project, they can block it
• But only if opposing residents live within a tight radius (not random countywide voters)

Landmarking but only for the truly historic

• Real cultural preservation, not blanket bans that freeze entire neighborhoods

Fast guaranteed timelines

• Permitting must be approved or denied within 60–90 days
• No multi-year litigation designed to delay a project into death

In other words: a system where development is the default, but communities still help shape how, not whether, it happens.

There’s no perfect system.
Japan has affordability without local representation.
The US has local representation without affordability.

Somewhere between the two is a balance where cities grow, communities have agency, and young people can afford to live where they were raised.

If we ever get there, maybe that will be the true “better system.”

Browse opportunities yourself: Check out current listings at Nipponhomes.com

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