Housing discrimination is still a problem in Japan

Nagoya – This is the final entry in a three-part series on housing for foreign residents in Japan.

By the most recent statistics — as well as by an overwhelming evidence of lived experience — landlords refuse non-Japanese renters in large numbers.

These prospective tenants are thus subject to a longer, more exhausting and potentially much more expensive rental application process. A 2016 government survey showed that a massive 40% of respondents had been rejected for rental housing because they were not Japanese. According to the Ichii Group real estate agency, almost nine out of 10 private housing units in Tokyo do not allow foreign tenants. So why is housing discrimination in Japan so widespread? And has the situation improved at all in the past few years?

The landlord’s perspective

First, it’s important to dig into why housing discrimination is such a problem in Japan. The basis lies in Japan’s powerful laws that protect renters against eviction, known as “right of residence.”

“Abroad, renting is quite easy. You can move out easily, and owners can ask you to leave easily,” says Alex Toyoda of Tokyo-based real estate company Plaza Homes. “But in Japan, the tenant is very strongly protected by the law.” Justifiable cause to evict tenants are limited to very special exceptions, such as if the owner goes bankrupt and has nowhere but that apartment for them to live. “For this reason, the screening process is extremely strict,” Toyoda adds.

The screening process sets out to examine a prospective renter’s identification, proof of income, employment and more. Japanese landlords tend to have two major concerns with non-Japanese renters. The first is that they will leave Japan unexpectedly and stop paying rent. The other is communication issues because most landlords cannot speak English for management purposes.

“Most companies are OK with us being the middle-man as an English-speaking real estate agency,” says Toyoda. “When the company says ‘no foreigners,’ it’s normally because they cannot speak English.”

Alex German at ReThink Tokyo, an online guide to Japanese real estate, says that oftentimes, the fault lies with the Japanese agent, who gives up when property managers express that a non-Japanese renter could be a problem.

“Most Japanese leasing agents open the door in their initial contact for the property manager to refuse the viewing, telling the foreign person that they likely will not rent to foreigners when in reality, the only thing that the property manages really cares about was whether the foreign client could understand at least a little Japanese or not,” German says. “I have found in my career that this is an overblown topic.”

Real estate agents say potential ways of overcoming these problems include paying a year of rent up front or making the contract period shorter.

A bias for Westerners

The 2016 survey revealed a number of disturbing and intriguing trends about housing discrimination in Japan. More than 90% of people in the survey who reported that they were rejected from rental housing because they were foreign nationals could speak Japanese at either a native (24%), professional (36%) or conversational level (31%). According to these results, language ability did not correlate with whether people were being rejected for housing.

Many rejected foreign residents interviewed for a Japan Times article on the topic in 2017 even had a Japanese spouse, a Japanese parent or fluency in Japanese. Industry insiders point out that stories of bad experiences with non-Japanese tenants, while uncommon in reality, spread widely among landlords.

A potential reason for the clash between real estate perspectives and the survey results lie in demographics. English-speaking real estate agents tend to work with Western clients, whereas many of the nationalities that reported the highest levels of discrimination were Asian: Thirty-eight percent of Chinese respondents and 40% of Thai respondents reported discrimination, versus just 24% of those from the United States and 18% of those from the United Kingdom.

As one ethnic Korean woman said in her survey response: “Even though I was born and raised in Japan, I can’t rent an apartment in this country because of my nationality. I was born and raised in Japan and I can’t speak any language other than Japanese, but I still experience a lot of discrimination and prejudice here.”

So while English-language ability may be the primary issue for Westerners trying to rent, overt or implicit racism may come into play with Asian groups. From the aforementioned Japan Times piece, an American looking for an apartment with his Vietnamese partner recalled having been told through a real estate agent: “The American is OK, but we won’t accept a Vietnamese.”

The survey also revealed that people who lived in Japan for more than 10 years were rejected at similar rates as those who had been in Japan for a short amount of time. So even living in Japan for a long period of time didn’t make non-Japanese residents less likely to experience discrimination.

Finally, the survey shows that large numbers of non-Japanese residents could not easily find rental housing because they did not have a Japanese guarantor, who promises to cover any rent or damage costs in case a foreign resident leaves the country.

Recent developments

Concerns over housing discrimination have risen in recent years in response to an uptick in the number of foreign workers in Japan prior to the COVID-19 pandemic. (Japan’s 2.9 million foreign residents in 2019 represented nearly 50% growth over 2012.) Accordingly, housing discrimination has received more attention among the growing number of foreign residents attempting to make Japan a home.

Private industry in Japan has voiced anxiety over housing discrimination because it can negatively affect the ability to attract and retain talent. Tsuyoshi Yamada, a human resources manager at Total OA Systems, told Nikkei Asia that a lack of sufficient housing support for non-Japanese employees could throw a hurdle up in front of the company’s plan to bring in overseas talent, for example.

The fundamental reality of the law and the mindset of landlords has barely budged. However, more private companies have started offering services in response to these trends.

One major development has been the rise of guarantor companies, emerging in response to the problem of foreigners’ applications being rejected due to a lack of Japanese guarantor. Many employers and schools will offer to serve as guarantor for their employees and students, but if this is not possible, guarantor companies have become a viable option. Companies such as Nihon Safety and Global Trust Networks specialize in guarantor insurance for foreign renters. The cost is typically around half a month’s rent plus an annual renewal fee of ¥10,000.

Real estate agencies that specialize in renting to non-Japanese individuals, such as Best Estate, Asumirai and Oakhouse, have also grown in recent years. These agencies tend to know which landlords do and do not accept non-Japanese tenants, so working directly with them can save apartment hunters precious time and frustration. Shared houses also do not require guarantors, and offer significant cost savings in exchange for sharing common areas with other residents.

“I feel like the Japanese government is enthusiastic to bring in new foreigners to work, but is not really thinking about the infrastructure, and this is one of those issues,” says Rochelle Kopp, a consultant at Japan Intercultural and occasional Japan Times contributor.

Concerns over communication, outright discrimination and non-persistent agents have combined to make Japan a treacherous renting environment for non-Japanese.

However, renters can try to be smart in their applications by highlighting their job security, nationality or Japanese fluency. Ultimately, foreign nationals will still be at the mercy of landlords and better off using specialist real estate agencies.

While laws won’t be changing in the near future, more awareness and industry response have created additional tools for foreign residents to navigate these unforgiving waters.