Blissful Japan

Let me start with a little background for anyone who is not familiar with the Japanese real estate system and what it’s like to find housing in Tokyo. First, let me discuss the fees. Before you can move into an apartment here, you will need to pay up front about 6-8 months of rent. Some of this is refundable, but most of it isn’t. Typically you will pay 1 month of rent (plus tax) as a commission to the real estate agent. On top of that add 2 months of “Thank You” or “Key” money to thank the landlord for giving you the key. (This is not refundable.) And then add 1-3 months’ rent for deposit. And finally, pay for the first one or two months of rent as well. Luckily the deposit is refundable, at least most of it is, but in Japan they do a mini renovation of the apartment typically between tenants, including replacing wallpaper, etc, which comes out of your deposit, and in some cases can be quite costly. In my case, I needed to pay over $15,000 just to move into my apartment in Shibuya. Apartments with lower fees are slowly starting to become more popular, but they are a tiny, tiny portion of the available properties and usually you will find a place with say no key money, but in reality they have just amortized the key money over the 24 month period of the lease and raised the monthly payment instead. If you decide you want to live there for longer than 24 months, be prepared to pay a 0.5-1.5 months’ rent “renewal fee.”

After moving in, you will be greeted with a barren apartment, which is also typical of the entire real estate industry here. In my case, I had to pay $1400 to install air conditioners in my living room and bedroom, and additionally supply my own washing machine, refrigerator, ceiling lights, and curtains. Luckily with the exception of the air conditioner, I could reuse all the other items from my previous apartment.

But I’d like to discuss another small but important detail of getting a lease, and the subject that ultimately drove me to write this post: the housing guarantor. The over $5000 in deposit and $15,000 I had to pay to move into my apartment are not enough to get the lease. Just like applying for a loan, in Japan when you apply for an apartment, you also need a guarantor. Personally, I found it hard to understand what the risk is to the guarantor. All I have been able to think of is that if I flee Japan and do more damage to the apartment than my deposit can cover, the owner has the right to go after the guarantor to pay the remainder. As an educated American with advanced degrees in Computer Science from a renowned university with a good job, 7 years of experience living in Japan, and speaking and reading fluent Japanese, I personally view the chance that I would flee the country and trash the apartment as quite low. But apparently, being a guarantor is considered a really big deal here. Such a big deal that most Japanese will only be a guarantor for a family member.

What are the requirements to be someone’s guarantor? That differs slightly depending on who you ask, and ultimately is a decision that the landlord and real estate agent will make, but in general there are two requirements: 1) You have to earn a comparable amount of money to the person you are acting as guarantor for (this generally rules out most women from acting as guarantors for men), and 2) You have to be Japanese. The first, I can understand. No sense in having a homeless person or someone with no income be a guarantor. But the second is simply discriminatory. A close friend of mine has lived in Japan for over 25 years, started and sold a 100 person company here, built a multi-million dollar house in Tokyo, and authored a book about economics in Japanese (and has no plans to ever leave Japan). Yet when I applied to use this person as my guarantor, after a week and a half of silence from the real estate agent, I finally received a call saying that since he was not Japanese, he could not be trusted. He might decide to run away from the country at a moment’s notice, she said. I reiterated his qualifications, and told the agent why doesn’t she talk to him directly if she has these concerns. However she couldn’t stop saying “But he’s not Japanese…” Relentlessly, I continued my same argument, until finally she broke down and admitted that it was simple prejudice against foreigners. Hearing her acknowledge that, which I realized was difficult for her, gave me a bit of reprieve, but in reality it changes nothing. I couldn’t understand her stout refusal to even talk to my friend, and I still hope she will reconsider. But I realize the decision wasn’t solely hers.

So what are the options? Pay yet another $2000 to a company who will serve as my guarantor for 2 years (don’t ask me how THEY are compensated should I burn down the apartment and flee the country, but I guess the $2000 is somehow enough for them to make up that risk; this isn’t always an option either), or find a Japanese man to be my guarantor. As much as I love living overseas and learning about other cultures, it’s illogical discrimination such as this that really upsets me.

Let me also note, that it’s not just foreigners though who are hit with this problem. Young Japanese who run away from home, or are estranged from their parents, can find themselves in the same situation. Perhaps you’re a 25 year old woman who got into a disagreement with your parents and wanted to move out. Good luck finding a guarantor without your parents’ blessing. Looks like you’ll be living in a capsule hotel or an Internet cafe, as many do.