By Takuya Okamoto | Founder & CEO of LivEQuality | CEO of Chitose Construction 

I run an affordable housing startup that leases low-cost, comfortable homes to single mothers who face difficulties renting accommodation, alongside a certified NPO that supports these tenants in achieving independence.

Some of you might have noticed the term "affordable housing" appearing in the media in Japan more frequently over the past year.

The catalyst for this was the Tokyo Metropolitan Government. In its fiscal year 2025 budget, under the initiative "Promoting the Supply of Affordable Housing Utilizing Financial Schemes," the metropolitan government announced a plan to invest 10 billion yen to establish a fund totaling around 20 billion yen (123.23 million USD) in collaboration with the private sector.

This initiative was officially announced by Tokyo Governor, Yuriko Koike, during a press conference on November 7th, 2025.

The move was widely covered across various media platforms, from business outlets like The Nikkei and Nikkei XTECH to television information programs like TOKYO MX.

LivEQuality has also been selected by the Tokyo Metropolitan Government as a candidate to operate this public-private partnership fund for promoting the supply of affordable housing. We will serve as the joint General Partner (GP, managing the fund) and sub-asset manager.

With a 4 billion yen investment from the Tokyo Metropolitan Government, we will establish an affordable housing fund totaling over 8 billion yen. I have also detailed the background of how this came to be in a previous article here. 

At the root of this movement is the severe, ongoing surge in housing prices.

Because securing a "high-quality home in a desirable area at a reasonable rent" has become increasingly difficult year by year, affordable housing is garnering significant interest. That being said, I am sure many people still find the concept somewhat ambiguous.

In this article, I want to break down what affordable housing actually is as simply as possible. Is it just cheap rental properties? How does it differ from public housing? Why is it drawing attention right now? I hope this article answers these questions for you. While Japanese media often uses the phrase "affordable jūtaku" (affordable residential properties), I personally prefer to use the broader term "affordable housing."

Affordability is a Global Theme

The word "affordable" literally means accessible or manageable to pay for.

In short, affordable housing refers to "housing that allows low- and middle-income demographics to live continuously in adequate living standards and locations, without the housing costs becoming an overwhelming burden on their lives."

To put it even more simply, it is "low-cost, comfortable housing delivered to people who are struggling to find a place to live."

The most critical point here is that it is not cheap, low-quality housing.

Precisely because a home allows a person to live with dignity and be themselves, it enables them to rebuild their lives and take the next step forward. Affordable housing is low-cost housing designed with the mindset of building a bedrock for everyday life.

Affordability has become a keyword worldwide. In the West, backed by government tax incentives and other measures, a large private-sector-led market has already been established. For example, in the United States, major tech companies have invested hundreds of billions of yen to address housing shortages in the regions where they operate.

During his 2024 presidential campaign, President Trump also repeatedly championed the slogan "Make America Affordable Again." In a housing policy plan released on May 26, 2026, New York City Mayor Zohran Mamdani announced that a major objective would be to construct 200,000 new affordable housing units and preserve another 200,000 units over the next decade.

The common crisis driving all of this is skyrocketing housing prices.

Globally, affordable housing is viewed not merely as a welfare policy, but as a solution to a crisis capable of shaking the entire economy and society. Consequently, national-scale efforts are underway.

The Housing Crisis in Japan 

What is the situation like in Japan?

In Japan, public housing (Kōei Jūtaku) has long played a role close to affordable housing. The national government and local municipalities have cooperated to provide homes at low rents to people facing housing difficulties.

However, national and local government finances have now reached their limits. The number of public housing units managed nationwide has been on a downward trend since peaking in fiscal year 2005. Even in Tokyo, almost no new metropolitan public housing (Tōei Jūtaku) is being built.

While public supply has stalled, the private real estate market is overheating.

In 2025, the average rent for a family apartment in Tokyo’s 23 wards exceeded 250,000 yen (1,540 USD) per month for the first time. Calculating from rent trends in the LIFULL HOME'S Market Report, this represents an increase of roughly 53% over five years. When it comes to purchasing, the average price of a newly built condominium in Tokyo’s 23 wards exceeded 130,000,000 yen for the first time in fiscal year 2025. Prices across the entire Greater Tokyo Area have renewed historic record highs for five consecutive years.

Tokyo is steadily becoming a city where ordinary people find it difficult to live.Furthermore, the private rental market faces the harsh reality that "there are many people who are denied leases." Government surveys show that landlords remain highly cautious about renting to single-parent households, elderly single-person households, and households with individuals with disabilities.

Landlords worry about whether rent will be paid reliably, what will happen if an emergency occurs in the room, or how neighbors will view the situation.

These "landlord anxieties" act as a barrier, preventing people who have both the will and the ability to pay from renting a home.Housing issues are a pressing and severe challenge hitting close to home—one that anyone might find themselves facing.

Affordable housing—delivering low-cost, comfortable homes to those in need—is an absolutely indispensable initiative for Japan.

Harnessing Market Power to Build Social Systems 

So, how do we create and supply affordable housing?

If administrative bodies tried to directly build and operate everything themselves—as with Japan’s traditional public housing—they would immediately hit financial limits. Building and maintaining housing requires enormous capital, not to mention the issue of securing land.

On the other hand, if we rely entirely on market forces, the capital of corporations and investors will only gravitate toward highly profitable properties, leaving affordable housing on the backburner.

Therefore, countries around the world are systemically structuring a "third way" that fits their respective circumstances—neither continuing to build public housing solely through taxes nor entirely outsourcing it to the market.

By combining market power (corporate/investor capital and private-sector operational expertise) with public mechanisms (tax incentives, low-interest long-term funds, and public financing), they create conduits that direct money toward socially necessary housing.

The specific way these conduits are shaped varies by nation. The balance of power between the public and private sectors differs significantly from country to country.

Over the next few articles, I will introduce the initiatives being taken by various nations. As you read through them, I hope the phrase "affordable housing," which you might have only heard of in passing, will begin to take on a clearer, more relatable shape.

In my next article, I intend to write about the initiatives in the United States. Following that, I will cover the United Kingdom, France, Austria, and Japan in turn.

Translated by Kei Eriksen, Global Partnership Manager at LivEQuality

> For inquiries regarding global partnerships or our affordable housing model, please feel free to reach out.