The Journal The Authority on Global Business in Japan

Japan is facing a demographic time bomb. After experiencing rapid growth in the 20th century, the population peaked at 128 million in 2008 and has since been declining.

The 2014 tally of 127.2 million people, down 0.7 percent from the year before, is expected to drop by 50 percent or more in 60 percent of inhabited areas by 2050.

Ten years later, there could be as few as 86 million people in Japan, and nearly 40 percent will be aged 65 or above.

As Japan’s population continues to shrink and age rapidly, measures to support childrearing constitute one of Prime Minister Shinzo Abe’s three new policy arrows.

To that end, the Ministry of Land, Infrastructure and Transport is promoting an old-fashioned concept: extended families living together or at least near one another.

In recent decades, Japan’s housing industry has developed multi-family homes known as nisetai jutaku that afford both proximity and privacy for different generations, but they have only accounted for about 5 to 10 percent of new houses built every year.

In late October, Keiichi Ishii, who was appointed head of the ministry in a Cabinet reshuffle earlier that month, held a meeting of key figures at Abe’s behest.

The government is targeting a birthrate of 1.8 by 2025. This would represent a significant rise from the 1.42 figure logged in 2014, yet still would fall far below the 2.07 or 2.08 needed to sustain a population.

However, a ministry survey found that in addition to the financial burden of having children, 20 percent of women under 30 cited having to take time off work among the reasons they don’t plan to have as many kids as they’d like.

A separate survey conducted by the Cabinet revealed that more than 30 percent of women feel they need help from parents and in-laws when it comes to childrearing.

In June, the Liberal Democratic Party’s Headquarters for the Promotion of Women in Society presented Abe with a resolution calling for urgent consideration of measures to promote multiple generations living with or near each other.

The ministry is considering including this policy position in the basic housing plan for the current fiscal year.

Debate on these issues, including how to cope with the increasing numbers of abandoned houses and the residential safety net, which seeks to ensure housing for people in financial and other forms of distress, began October 26 at a Residential Subcommittee meeting of the Social Infrastructure Development Council.

However, coming up with a detailed policy plan hasn’t been easy.

Under the current system for subsidized homes run by the semipublic Urban Renaissance Agency, households raising children can receive a 5 percent discount on rent for five years if they have parents living within a two-kilometer radius, and expanding support measures could affect management of the program.

While some have proposed extending tax credits for loans used to finance renovations for multi-generation housing, current restrictions would prohibit such credits from being used at the same time as a mortgage tax credit.

“I really don’t have a clear idea of what the government wants to do here,” one subcommittee member said in a pointed remark directed at the ministry. This discussion will continue to draw attention as the end of the fiscal year approaches in March.

Keizaikai magazine