Reconstruction of an old apartment building – Rebuilt examples and problems

Poste date: Thursday, January 25, 2018

According to information from the Ministry of Land, Infrastructure and Transport, it is estimated that the number of apartments over 40 years old throughout Japan will be as many as 730,000 in 2018. As of 2013, there are only 183 cases in all of Japan of apartments being rebuilt. Due to the high number of apartments needing reconstruction, this subject is becoming a social issue.

Along with an introduction to the problems that will be faced during the process of reconstructing an apartment building, we have provided some examples of apartments that have successfully been rebuilt as well as going over the alternate option of selling the land instead.


Reasons behind the lack of progress in reconstruction

 

As we have stated in an earlier article Reconstruction of Japanese old apartment building - Reason of rebuilding, planning and resolution, the main entity taking care of the planning and rebuilding process is a management association consisting of apartment owners. As everyone in the apartment has a say in the construction, plans cannot move forward unless there is agreement amongst all the apartment owners. The cost of the reconstruction includes the demolition of the old building as well as the cost of constructing a new one, which naturally will be very expensive.

It is generally estimated that reconstructing a building will cost about 10,000,000 - 20,000,000 yen per one 60sqm dwelling unit of apartments. The reserve fund for repair that everyone would have been paying into so far would likely be insufficient to cover the costs of the reconstruction. As such apartment owners would have to pay extra money on top of the reserve fund that they have been paying into over the years. As there are some apartment owners who cannot afford the extra cost, it is very difficult to get more than 4/5th’s of the apartment owners to agree on the necessity of rebuilding the apartment building.


Examples of apartments that were successfully rebuilt

 

When looking over examples of apartment building that were actually rebuilt, various efforts that were put into reducing any extra costs can be seen. Some methods used are the utilizing of the buildings floor area that was originally deemed unusable, due to floor-area ratio limits at the time of the buildings original construction, or using a Comprehensive Design System (system of floor area ratio premium for construction on unused land).

In Japan the floor-area ratio is a guide line that limits the total area of livable space you can have in a building in relation to the size of a plot of land. As an example, if you have piece of land that is 200m2 and it has a 400% floor-area ratio limit, you can construct a building that has 800㎡ of livable space. If in the future due to changing construction laws the floor-area ratio increases to 500%, you would then be able to have a building that has 1000m2 of livable space.

As limits have been rising, a common way to cover some of the costs for the new building would be for the new building to be built bigger and add extra apartment units. The cost from selling these units would help lower the per person cost of the reconstruction for the current apartment owners.


Example 1: Azabu Pine Crest ⇒ Azabu Ichibeicho Homes

This first example of a successful rebuilding of an old apartment building in Japan was achieved through the mutual agreement of the apartment owners. As the neighborhood the building was located in was part of a district wide redevelopment project, the floor-area ratio of the building was allowed to be increased allowing them to build a bigger building with additional apartment units. A consultant specializing in rebuilding encouraged and helped facilitate the process allowing the owners to rebuild their apartment building through with their own planning.

Location: Minato-ku, Tokyo
Area of Land: 1129.3㎡

Before: Azabu Pine Crest

Total floor area: 3543.41㎡
Year of completion: 1972
Number of units: 47

After: Azabu Ichibeicho Homes

Building structure: Reinforced Concrete 15 stories 2 basement floors
Total floor area: 8697.83㎡
Year of completion: 2004
Number of units: 69

■Progress of rebuilding

1994: Started the planning of rebuilding

2000: Established the owners’ agreement for rebuilding

2001: Filed a lawsuit against the owners who disagreed, and reconciled with them.

2002: Started reconstruction in December

2004: Completed in October


Example 2: Amagi Roppongi Mansion & Homat Garnet ⇒ Atlas Tower Roppongi

In this example an effective rebuilding plan was realized through the cooperation of two neighboring apartment buildings. Each of the building’s owners agreed upon rebuilding at almost the same time. A Comprehensive Design System was utilized to increase the floor-area ratio of the combined land of the 2 apartment buildings almost tripling the number of apartment units in the building. With the funds from selling additional apartment units gained from the reconstruction, the owners were able to raise the funds for the cost of the new building, temporary housing during the period of construction, and the expense of moving out then back in. All this was accomplished while keeping the size of each apartment unit the same.

Area of Land: 966.21㎡ / 246.24㎡
Building structure: Reinforced Concrete 8 stories 1 basement floors / Reinforced Concrete 8 stories 1 basement floors
Total floor area: 3370.18㎡ / 1216.84㎡
Year of completion: 1971 / 1980
Number of units: 24 / 8

After: Atlas Tower Roppongi

Area of Land: 1328.72㎡
Building structure: Reinforced Concrete 28 stories 2 basement floors
Total floor area: 12961.35㎡
Year of completion: 2010
Number of units: 90

■Progress of rebuilding

2003: Established the committee for rebuilding

2005: Established the agreement for starting the plan of rebuilding, selected the collaborators for the planning

2006: Established the agreement for rebuilding

2008: Started reconstruction in January

2010: Completed in February


Alternate option of selling the land of an old apartment


The 2 examples above were instances in which the apartment owners were able to raise the various funds necessary for reconstructing an apartment building by selling new units that were able to be built due to the increase in floor-area ratio upon reconstruction as well as attracting the interest of developers wanting to work on the project. However, most old apartments that require reconstruction have not had an increase in their allowable floor-area ratio to allow them to acquire extra funds such as the aparement owners in the above examples were able to do. As such, the apartment owners will have to be responsible for all expenses themselves. If the location of an apartment is neither convenient nor marketable, it is difficult to find developers willing to collaborate with apartment owners in rebuilding an apartment building.

As a result of revisions to the law regarding the building of an old apartment in 2014, a system of selling old apartments and their land was established as a new option to advocate the rebuilding of existing apartments in need of reconstruction. When an apartment has been deemed as having an inadequate seismic capacity, the new system will allow such an apartment building to sell it’s land when 4/5ths of the apartment owners are in agreement of selling the land. The developer that purchases the land can then demolish the apartment building and build a new one. The old apartment owners may then buy a new apartment in the new building. Selling in this way should be carefully considered as well as comparing and weighting the costs and benefits of rebuilding or renovating the apartment building.

Exterior of Roppongi Hills Residence B 41F
Sale Property tag

Roppongi Hills Residence B was completed in April 2003 as a symbolic building in Roppongi. The 43-storey (with 2 basement levels), 333-unit seismic controlled tower condominium is managed by Mori Building Co providing a variety of concierge services such as reception for common facilities and good care of residents. The comfort of residents is a top priority in this building, which also pays careful attention to safety as well. The cosmopolitan areas of Hiroo, Azabu and Aoyama are within living distance, and luxury brand shops line the streets nearby, offering a high standard of urban living.2LDK type room facing East on the 41st floor. Each bedroom has a walk-in closet, and there are also shoe-in closets and storage spaces to ensure enough storage space. The living/dining room of approximately 36.9m2 and the open kitchen are attractive. You can enjoy the view toward Azabu from the approximately 12-meter balcony.

JPY1,088,000,000

Exterior of Roppongi Hills Residence B 35F
Sale Property tag

Roppongi Hills Residence B was completed in April 2003 as a symbolic building in Roppongi. The 43-storey (with 2 basement levels), 333-unit seismic controlled tower condominium is managed by Mori Building Co providing a variety of concierge services such as reception for common facilities and good care of residents. The comfort of residents is a top priority in this building, which also pays careful attention to safety as well. The cosmopolitan areas of Hiroo, Azabu and Aoyama are within living distance, and luxury brand shops line the streets nearby, offering a high standard of urban living.2LDK type room facing South West on the corner of the 35th floor. There are two toilets, and there is a shower room in the master bedroom. Each bedroom has a closet. And there is a shoe closet, and a storage room to provide ample storage space. The spacious living/dining room of approximately 61m2 is attractive. You can enjoy the view of Mt. Fuji.

JPY1,230,000,000

Exterior of WELLITH ROPPONGI 17F
Sale Property tag

The property is a condominium apartment on a hilltop very close to "the Iikura-Katamachi intersection"; which is in a four min. walk from the Roppongi intersection. It is located higher than Tokyo Midtown and Izumi Garden so that it gets outstanding open view including Tokyo Tower. It offers flexible floor plans that can be adapted to changes of life stage from single persons' use to family use. The interior design is simple and elegant. It offers high quality living space where anyone can live comfortably. Wellith Roppongi was formerly sold by NTT Urban Development Corporation and constructed by Maeda Corporation in January 2014 to new earthquake resistance standards. It is a 4-minute walk from Roppongi-1-chome Station on the Tokyo Metro Namboku Line and a 7-minute walk from Roppongi Station on the Hibiya and Toei Oedo Lines. The building is located near the redevelopment of the Toranomon-Azabudai area, including the prominent tower building of Azabudai Hills and other redevelopment projects in Toranomon and Azabudai, which is is one of the areas attracting attention for its improved convenience in the central Tokyo. The building has 17 floors above ground with a total of 94 units, and is safe and secure with 24-hour online security and double auto-locks.The apartment is on the 17th floor of a 17-storey building and is a top-floor unit with excellent sunlight and views. The view from the balcony overlooking Roppongi Hills and other areas is an appealing point of this property. The exclusive area is 37.14 m², 1LDK type, and the 8.1 m² balcony gives the room a sense of depth. The maximum ceiling height in the living/dining room is approximately 2.5 m, giving the room a spacious feel. The rooms have been partially renovated in October 2023 (replacement of wallpaper in all rooms, installation of an entrance mirror, new kitchen stove, air conditioning cleaning, ceiling light installation, etc.), so the rooms are in good condition. The apartment is currently vacant and available for viewing. The internal viewing is highly recommended. Please contact us for arranging a viewing!

JPY99,800,000