2016 Volume 3 Pages 31-49
A certain amount of vacant houses is indispensable for the well-functioning of the housing market. On the other hand, excessive vacant houses including surplus houses from rental or sale market, abandoned houses, etc., would gradually accumulate in amount and degrade in quality to impose significant externalities to form a vicious cycle to deteriorate the neighborhood. Until now, literatures for vacant houses are focus on the negative influences of the excessive vacant houses or some individual reutilization cases. However there is lacking a pre-condition for those literatures, which is what the proper amount of vacancies is and what extra is. The paper provides a brand new angle to view the issue of vacant houses to support the management of the housing market and vacant houses by producing an ideal vacancy rate. The optimal vacancy rate in the housing rental market means the vacancy rate that required for the landlords to search for the tenants, and in the search process the landlord will maximize the present value of return with the optimal list rent strategy. In Tokyo (23 wards), the optimal vacancy rate for the housing rental market is found to be 1.96%. Comparing to the actual vacancy rate in the housing rental market, large part of the vacant houses are structural vacancies which can barely be rented out. There is large social cost caused by the excessive vacancies in the housing rental market in Tokyo, which is against the sustainable development, and responding management policies are in need as well.