State Guarantees Monthly Rent... Resolving Housing Instability
Plan to Accommodate Elderly Living Alone in Vacant Houses Without Tenants
The Japanese government announced that it will prepare an amendment to the Elderly Housing Act that directly guarantees the payment of overdue rent as a housing policy measure for elderly people living alone, whom landlords are reluctant to accept as tenants due to issues such as solitary deaths. The plan aims to alleviate housing insecurity for elderly people living alone who are in the blind spots of housing welfare, and at the same time solve the rental issues of vacant houses that have increased due to population decline.
On the 21st, Nihon Keizai Shimbun (Nikkei) reported that the Japanese government plans to submit amendments to the Housing Safety Net Act and the Elderly Housing Act containing such measures to the current regular Diet session. The amendment focuses on creating a nationally certified guarantor company that will pay overdue rent within a certain range on behalf of elderly people living alone if rent arrears occur.
In Japan, where monthly rent is common, landlords often require tenants to join a rent guarantor company at the time of contract. This is because in Japan, where security deposits are usually set at one to two months' rent, it is difficult to continuously deduct overdue monthly rent from the deposit. Therefore, when signing a new lease contract, landlords make joining a guarantor company a condition. If the tenant pays a certain usage fee to the company, the landlord receives overdue rent through the guarantor company in case of missed payments.
However, guarantor companies often refuse to accept elderly people living alone due to high risks such as solitary deaths, making it practically difficult to even sign real estate contracts. Through this amendment, the Japanese government intends to guarantee on behalf of the state to help elderly people living alone with real estate contracts.
Additionally, when signing a monthly rent contract, it is mandatory to provide an emergency contact other than the tenant, and this can now be designated not only as an 'individual' but also as the state. Furthermore, the functions of 'residence support corporations' designated by local governments will be strengthened. Residence support corporations are institutions responsible for supporting the housing of people classified as requiring special consideration, such as elderly people living alone.
Going forward, they will have the right to be entrusted by elderly tenants and to dispose of belongings after death. This aims to solve the complicated issue of handling personal effects after solitary deaths. The intention is to provide consistent support not only for move-in consultations but also for post-mortem responses.
Residence support corporations will also establish a system to cooperate with landlords to provide routine welfare checks for tenants. If certain conditions are met, the housing will be classified as 'residence support housing,' and local governments will subsidize repair costs and other expenses.
This measure is receiving positive evaluations as it can simultaneously solve the increasing problems of vacant houses and housing for elderly people living alone. According to Nikkei, the number of elderly people living alone in Japan is expected to reach 8 million by 2030, a 20% increase compared to 2020. Moreover, about half of the 8.49 million vacant houses nationwide are vacant houses that can be rented out, so utilizing these can solve both vacant house and housing problems at the same time.
Nikkei analyzed, "If owners who inherited houses from parents or others hesitate to rent them out, the houses are likely to remain vacant. Recently, there has been a growing call to circulate these in the rental market," and added, "Therefore, the government seems to be trying to create an environment conducive to renting houses through legal amendments and to connect this to the utilization of vacant houses without tenants."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
