When buying property in Japan, navigating the Japanese Building Standards Law can be complex, even for natives. For foreigners, the added complication of Japan’s unique restrictions and terminology – like kenperitsu and yousekiritsu – can make it all the more difficult. When searching through property listings, you will a set of numbers listed on the advertisement. These are development restrictions prescribed by which of the twelve land use zones and other districts the property lies within. Since it can all be a bit confusing, here’s a brief introduction to some basic restrictions you will need to be aware of when investing in Japanese property…
The Planning System
Under Japan’s city planning system, several tiers of regulation may apply to one plot of land. These are defined by the following geographical boundaries:
About a quarter of the land in Japan is controlled by city planning. These planned regions are divided into areas where development is either promoted or controlled (not premitted). Land that falls under some form of city planning will be subdivided into standard land use zones, as well as other forms of districting. Land designated as ‘Urbanisation Promotion Areas’ may have district plans (masterplans, etc) enacted by their municipalities.
Land in areas classified for urban development fall within one of the twelve use zone designations.
|￼Exclusively low-rise residential I,II||50~200||30~60|
|￼￼Mid/high-rise oriented residential I,II||100~500||30~60|
Each zone establishes what kind of development is permitted on the land and restricts building size and density by prescribing the numbers used to calculate the buildable area (FAR, BCR), height, and setback, as explained below.
Additionally, the land may fall within one or more districts or a district plan enacted by the municipality to strengthen or relax localized control over matters such as usage, size, density, building heights, fire prevention measures, setbacks for planned roads, greenery, exterior colors, and more. District-wide restrictions may override the uniform use zone restrictions, such as building coverage and floor area ratios.Therefore, it’s imperative to properly research any local districting that may also affect the development.
District plans address the interests of the local community and are enacted by municipalities in order to preserve or achieve a shared vision. This is what would be called a masterplan. The plan can establish fine-grained controls (parks, open spaces, roads, shopping centers, etc) and can override zone restrictions.
Building Coverage Ratio (BCR)
The building coverage ratio (BCR) – kenperitsu 建蔽率 – regulates the maximum portion of the land that can be built upon.
Kenperitsu (BCR)% = building coverage area / site area × 100
The BCR varies according to which land use zone the property is located within. It limits building density, preventing fires from spreading between adjacent buildings; ensuring light and air penetration; and loosely controlling urban character.
Floor-Area Ratio (FAR)
The floor area ratio (FAR) – yousekiritsu 容積率 – sets the maximum possible floor area (totalled across all floors). This is expressed as a percentage of the site area.
Yousekiritsu (FAR)% = total floor area / site area × 100
The FAR is also established by which of the land use zones the property is classified as. However, local planning authorities may override set a different ratio by establishing districts and enacting district plans.
Furthermore, the FAR is limited by an additional restriction – a specified ratio of the road width. In residential land use zones, this ratio is 0.4. Elsewhere it is 0.6, but this can also be altered by the local authority. If a 100m2 plot is fronted by a 4m-wide road within a residential zone (0.4), the FAR would equal 160% (4m x 0.4 = 160%). This result is compared with the FAR set by the land use zone, and the lower of percentage applies.
Some areas within the home are not counted as part of the floor area for the FAR calculation. For instance, where the ceiling height is lower than 1.4 meters (low-ceilinged storage spaces are common for this reason) and basements.
FAR varies by location. It is used to control the overall population density in urban areas, easing traffic and overcrowding. The floor area of certain commercial buildings (stores, restaurants, etc) may be further limited within certain land use zones.
Roads in Japan should be at least 4 meters wide. In reality, old roadways can be narrower. In these cases, the building must be setback from the center of the old roadway by at least 2 meters (or more if so stipulated). The area of the setback is excluded from the BCR and FAR area calculations we discussed above.
Further setbacks can be stipulated by districting. In addition to controlling urban density, minimum setbacks help ensure that a road may be widened in the future, which permits access by fire trucks.
In addition to the size limitations set by the FAR and setbacks, there are height restrictions on development.
In the first two residential use zones, the building must not exceed virtual slanted planes projected upward at prescribed angles from the plot boundaries. Again, the use zone designation governs the slope of the planes and from what height above the ground they originate. These most easily explained in a diagram…
There are actually three types of slant planes, corresponding to the different boundaries of the site – road boundaries, adjacent plot boundaries, and north-facing boundaries (not pictured). Each is calculated differently.
Slant planes seem unique to Japan and account for the sloping character of mid-height buildings in urban areas. Of course, not all plots are neat rectangular shapes, so the process of establishing correct height boundaries is usually more complex and can require more sophisticated techniques that are beyond the scope of this introduction.
Maximum building height restrictions are enforced through districting by establishing height ceilings for development in the area (no buildings permitted higher than 13 meters, for example).
Do Your Research
The above is meant as a quick overview of aspects of Japanese Building Standard Law we typically see affecting development plans.
When deciding whether to invest in a Japanese property, you can’t simply compare cost per m2. You should really look at the value of what it is possible to build on the property. If you are considering to build in Japan, this information should provide you with a better idea of what you can accomplish, but it’s by no means a complete picture.
As I’ve already made clear, local authorities may override the general restrictions discussed above (as well as many not discussed) with local districting and planning. Therefore, you should carry out proper research into the applicable regulations instated by the authorities at the local, prefectural, and national levels.
To fully investigate the development potential of prospective properties, a feasibility study should be conducted, looking at how the applicable regulations will shape the investment potential of one or more sites.
English Resources about Japanese Property
Unfortunately, there are not many english resources available about Japanese property. There are a few, however:
- Japan’s Ministry of Land, Infrastructure and Transport (MLIT) has published this pdf overview of the planning system in Japan, explaining all of the concepts above with illustrations.
- Investing in Japan – an illustrated book aimed mainly at investors and published by the Urban Land Institute of Japan.
- Legal Issues in Japanese Real Estate Investment – a new and very thorough overview of all aspects of Japanese real estate law – from soil pollution to JREITs – by Jeff Wynkoop, a US attorney/CPA who is also a qualified certified Japanese Real Estate Transaction Manager (takken).
- The Building Center of Japan also sells a CD containing an english translation of the Buiding Standard Law of Japan. However, like most legal texts, it isn’t very reader-friendly, especially since it’s a translation from legalistic Japanese.
- Of course, if you need professional help, don’t be afraid to drop me a line.
This guide is by no means exhaustive. If there’s something you think I should add or revise, please get in touch either by posting a comment or email me via the contact page.