Yuta Yamasaki and his wife moved from southern Japan to Tokyo a decade ago because job prospects were better in the big city. They now have three sons – ages 10, eight and six – and are looking for a larger place to live. But Yamasaki, who runs a gelato shop, and his wife, a childcare worker, aren’t planning to move far. They are confident they can find an affordable three-bedroom apartment in their own neighbourhood.

As housing prices have soared in major cities across the United States and throughout much of the developed world, it has become normal for people to move away from the places with the strongest economies and best jobs because those places are unaffordable. Prosperous cities increasingly operate like private clubs, auctioning off a limited number of homes to the highest bidders.

Tokyo is different.

In the past half-century, by investing in transit and allowing development, the city has added more housing units than the total number of units in New York City. It has remained affordable by becoming the world’s largest city. It has become the world’s largest city by remaining affordable.

Two full-time workers earning Tokyo’s minimum wage can comfortably afford the average rent for a two-bedroom apartment in six of the city’s 23 wards. By contrast, two people working minimum-wage jobs cannot afford the average rent for a two-bedroom apartment in any of the 23 counties in the New York metropolitan area.

Maintaining an abundance of affordable housing has its downsides. Green space is scarce in Tokyo, living spaces are small by Western standards, and relentless redevelopment disrupts communities.

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

But the benefits are profound. Those who want to live in Tokyo generally can afford to do so. There is little homelessness here. The city remains economically diverse, preserving broad access to urban amenities and opportunities. And because rent consumes a smaller share of income, people have more money for other things – or they can get by on smaller salaries – which helps to preserve the city’s vibrant fabric of small restaurants, businesses and craft workshops.

As political leaders in urban areas around the developed world grapple with how best to revive their cities in the aftermath of the pandemic, Tokyo offers a template.

From the air or from one of the city’s many observation decks, Tokyo appears as a vast sea of low- and mid-rise buildings laced with archipelagoes of high-rises, each island marking the location of a station along one of the city’s railroad lines. Yamasaki’s family lives near Yoga Station on the Den-en-toshi, or Garden City, line, which stretches south-west from the city centre. They rent a two-bedroom apartment for 150,000 yen per month (S$1,390).

People have long flocked to prospering cities in search of better lives; until recently, cities largely succeeded in making room for the new arrivals. In a 2014 study, economist Katharina Knoll and her co-authors concluded that urban housing prices in industrialising nations held steady from 1870 until 1950 despite rapid population growth because transportation innovations expanded the area in which people could live.

As cities such as New York stopped building new mass transit lines and started restricting new development along existing lines, growth stalled and housing prices climbed. In Garden City on Long Island, the railroad stations are still surrounded by single-family homes on large lots – the same homes, for the most part, but the average home now costs more than US$1.2 million.

Some cities, such as Singapore and Vienna, have bucked the trend by using public money to build affordable housing. Almost 80 per cent of Singapore residents live in public housing.

In Tokyo, by contrast, there is little public or subsidised housing. Instead, the government has focused on making it easy for developers to build. A national zoning law, for example, sharply limits the ability of local governments to impede development. Instead of allowing the people who live in a neighbourhood to prevent others from living there, Japan has shifted decision-making to the representatives of the entire population, allowing a better balance between the interests of current residents and of everyone who might live in that place.

Small apartment buildings can be built almost anywhere, and larger structures are allowed on a vast majority of urban land. Even in areas designated for offices, homes are permitted. After Tokyo’s office market crashed in the 1990s, developers started building apartments on land they had purchased for office buildings.

“In progressive cities we are maybe too critical of private initiative,” said Christian Dimmer, an urban studies professor at Waseda University and a longtime Tokyo resident. “I don’t want to advocate a neoliberal perspective, but in Tokyo good things have been created through private initiative.”

Tokyo makes little effort to preserve old homes. Historic districts subject to preservation laws exist in other Japanese cities, but the nation’s largest city has none. New construction is prized. People treat homes like cars: They want the latest models. Between 2013 and 2018, new homes accounted for 86 per cent of home sales in Japan, according to the most recent government data. In the US, new homes typically account for about 15 per cent of sales, according to data from the National Association of Realtors.

One reason Tokyo looks forward is that little remains of the city’s past. Earthquakes, fires and American bombers destroyed much of the prewar city, and after the war, the rush to provide housing and the nation’s relative poverty produced a city that wasn’t meant to last. Some of the “billboard” buildings of the postwar era – cheaply built wooden structures dressed up with sheet-metal facades – still dot the city, slowly falling apart.

Yuka Mendo, who owns a century-old rice warehouse in Kuramae, a neighbourhood just north of the city’s centre, said that men in suits knock on her door almost every week to ask if she and her husband are willing to sell. They want the land; the building, for all its charm, would be demolished. Mendo and her husband themselves lived only briefly in the old warehouse before concluding it would be more comfortable to rent an apartment in a new building nearby. The plumbing was unreliable and wind came through gaps in the old wooden walls. “It’s so much more comfortable” in the new building, she said.

While it may be cheaper to live here than in London or Hong Kong, Tokyo remains by far Japan’s most expensive city. Mendo, who grew up in a rural part of Chiba prefecture, said many of her classmates moved to Tokyo for college or jobs, and then returned to their hometown to raise families.

Takako Ohyama, 35, who pays the rough equivalent of US$1,500 a month for a one-bedroom apartment where she lives with her husband and daughter, said she is planning to move back to Miyagi prefecture, in northern Japan, where her parents live.

“Tokyo is an exciting city,” she said. “But it’s cheaper there.”

Kuramae, however, remains affordable for many, and even as newer buildings replace older ones, it remains economically diverse. The ease of building in Tokyo means that new construction is not synonymous with luxury housing. Small workshops and factories are common. The Mendos’ neighbours include a custom lacemaker, a small factory that embosses items for department stores and a paper goods store.

Yoshinobu Yanase, a dapper man dressed in a tan vest and a bow tie, worked for more than a decade as a salesman for a fashion accessories company, dabbling in design and even persuading the company to make some of his products. Then, three years ago, he started selling his own line of leather backpacks, messenger bags and other leather goods from a room in a multi-floor retail building in Kuramae.

He sells only 30 to 40 items each month, but he pays only 90,000 yen per month for the store and 110,000 yen for a 600-square-foot one-bedroom apartment on the other side of the Sumida River. The combined rent is the equivalent of roughly US$1,400 a month.

“In Tokyo,” he said, “it is possible to do this.” NYTIMES