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Friday, Feb. 17, 2006
State eyes selling prime property
Panel aims to fill coffers with sales of government housing
Surrounded by Izumi Garden Tower, the Saudi Arabian Embassy and luxury condominium complexes in Tokyo's Roppongi district, an ugly old apartment block stands.
The 22-year-old, government-owned building, which houses about 90 civil servants and their families free of charge or for nominal rents, was the target of scrutiny Thursday by a seven-member team of academics, real estate experts and a lawyer. The team spent the day looking at the building and nine others like it in Tokyo.
The committee, commissioned by the Finance Ministry, hopes to have a list by May of housing on prime real estate the government can sell over the next five years to help reduce its snowballing debt.
"Of course we can't keep a building like this. Nothing could be more wasteful," said Waseda University professor Shigeru Ito, after touring the Roppongi building. "The location is superb, and we can sell it for a high price to someone who wants to build an office building" if the Saudi Arabian Embassy does not object.
The committee hopes to add 300 billion yen to government coffers over five years doing such things as consolidating housing, selling off low-occupancy apartments on prime real estate and selling or leasing property in partnerships with real estate firms, including Mitsui Fudosan Co. and Mitsubishi Estate Co.
It also envisions possible partnerships with the Tokyo Metropolitan Government and ward offices, which are interested in developing property.
Within walking distance of the Kasumigaseki government district, the Roppongi apartment building provides 70 sq.-meter units free of charge to civil servants who might be needed in an emergency, including nurses, prison guards and ministry officials who are assigned to earthquake response.
But with more government housing one and two subway stops away, Ito said it was time to let the building go.
"The government does not need this property," he said. "As it is, it contributes nothing to the development of the area."
Condos in one neighboring complex are being sold for 70 million yen to 80 million yen.
The government owned 372 apartment buildings and houses, which can house 21,901 families, as of January in Tokyo's 23 wards. Ninety-seven of them are within the JR Yamanote Line loop.
Government housing includes apartment buildings managed by the ministries, as well as apartments for Diet members and the official residences of the prime minister, chief Cabinet secretary, the speaker and vice speaker of the Lower House, the Upper House president and vice president, and the chief justice of the Supreme Court.
The property's total value was estimated in 2004 to be worth 532 billion yen.
However, occupancy was only 50 percent in September.
The overall decrease in the number of civil servants and the lack of popularity of the older buildings are two factors that might be behind the low occupancy level, one Finance Ministry official said.
With the government debt projected to exceed 170 percent of the gross domestic product by the end of the fiscal year, the ministry wants to sell or lease more government-owned property -- some in prime locations -- as land prices in central Tokyo start to increase.
Only some government employees are eligible for free housing. Most people who live in government housing have subsidized rent.