Letter from CAIRC
April 2002 Vol.6 No.1

Pet-friendly rental housing construction starts in various places nationwide
“Property Management Support Handbook for Living in Multi-Unit Housing with Dogs and Cats” Receives Many Requests for Distribution

Increase of pet-friendly rental housing is the result of diversified lifestyle values

The Companion Animal Information and Research Center (CAIRC) began free distribution on April 1 of its originally produced pamphlet, the “Property Management Support Handbook” for real estate and property management companies. Behind the production of this booklet was the increasing need among residents to live with pets in collective housing. We have also received a wide range of contact from real estate and property management companies regarding allowing pet ownership in collective housing.

These include an increasing number of requests for the free textbook “Living with Dogs and Cats in Multi-Unit Housing,” which we produced in 1998. At present, collective housing represents a majority of urban residences in Japan, and nearly 70% of people say they are partial to keeping pets (according to a study conducted in June 2000 by the former Office of the Prime Minister). These facts lead one to the conclusion that the demand for pet-friendly collective housing has come to reflect a genuine need. At the same time, there has been an increase in new collective housing developments that allow residents to keep pets, which has been centered in the major metropolitan areas. In rental apartments and previously existing collective housing complexes, however, the question of whether to allow pets remains at issue. We therefore investigated on the state of pet allowed rental collective housing located outside of the major metropolitan areas.

A nationwide comparison of the differences in rates of collective housing naturally makes it clear that there are wide regional variances in ways of thinking and levels of awareness regarding collective housing. At the same time, we have been receiving inquiries from real estate and property management companies located nationwide, from Hokkaido to Okinawa. In the current “tenant’s market” for residential property, there seems to be a strong inclination toward pet-friendly management of collective housing as a means of helping to stabilize rates of occupancy. One recent development has been the announcement by a major housing construction company of customizable rental collective housing in which the occupants have some choice in the facilities and fixtures to be installed. Among the choices is a pet-friendly selection that gives a rental unit a high-quality, individualistic appeal.

We spoke with Hironao Tajima, head of the General Research Institute of the Japan Property Management Association, a foundation with a membership of 880 real estate and property management companies nationwide:

“Rental collective housing is becoming more diverse as it adapts to the needs of diverse residents. The increased diversity includes barrier-free housing, pet-friendly housing, housing for foreigners and housing adapted to residents who play musical instruments. In this age of asset deflation, an increasing proportion of residents are opting to become life-long renters. But the supply of high-quality multiple-unit rental housing currently available certainly cannot be said to be sufficiently meeting the needs of customers. I believe that high-quality collective housing complexes that are pet friendly, constitute a new category of rental housing for which a great need exists.

“In the past, there has been a limit to the extent to which it was possible to build community in rental housing. But if the goal is to seek an environment that is easy to live in, I think that building community is going to be very important in the future. Of particular importance in collective housing is maintaining smooth relationships with people in neighboring units and also with others in the surrounding neighborhood. As the healing effects of pet ownership gain more recognition, provisions for animal companionship are also being recommended for housing facilities for the elderly, who have relatively high needs. Given these factors, it seems that pets really could be of help in building community in rental collective housing complexes. I think there is going to be an increasing need for things such as pet clubs in rental housing.”

Visiting residences and attending seminars helps with information gathering Raising a pet oneself also helps build confidence in pet-friendly property management

The ratio of collective housing in Japan’s urban areas is about 70%. The percentage of these collective housing complexes that permit pet ownership varies by region, and real estate and property management companies also have different approaches to pet ownership.

To begin with, we interviewed a property management company of Tokai city, Aichi prefecture, which is located within a 20 minute train commute of Nagoya. In addition to being a suburban satellite of Nagoya, another factor behind an increased need in Tokai area for collective housing complexes is the fact that it lies in the vicinity of many major industrial plants. Happy Co., a real estate and property management company, handles four pet-friendly collective housing complexes in Tokai city, with plans to take on two more newly built complexes this summer. It was the company’s president, Haruo Numazawa, who came up with the plan to manage a group of pet-friendly apartment buildings. He keeps a scrapbook of newspaper and magazine articles on pet-friendly collective housing dating back seven or eight years. The scrapbook also includes photos of pet-friendly collective housing complexes in Tokyo that he himself visited with an architect. After his fact-finding tour, he began participating in seminars and collecting information in earnest.

“One thing that really surprised me at the seminar was when I went to a pet training area and saw how much simpler it is to train an animal than I’d imagined,” he said. “I’ve always liked dogs, so I began raising one at home and trained him myself. Keeping a dog myself, I learned that they really can be toilet trained and taught to control their barking. I also learned that the more pet owners value their pets, the more thoroughly they train them. After gathering all this information, and seeing things for myself, I became confident that this is something entirely doable, and began providing pet-friendly housing to customers.”

We were shown three of the pet-friendly housing complexes managed by Happy Co. There were a number of facilities and equipment especially for pets, such as paw-washing areas, pet doors, entryway cages and special wallpaper for pets, although the main emphasis was by no means placed on these amenities. Rather, Happy Co.’s orientation stresses the importance of awareness among pet owners. The company urges residents at the time of signing the contract to join the local neighborhood association in order to facilitate communication. It also encourages thorough training out of consideration for neighbors. It is now considering the possibility of the formation of pet clubs and training workshops, and there are plans to visit a nearby dog run. In addition, a photo of each pet is placed outside the front door of the unit where it is kept so that if any pet-related trouble does arise, it will be clear which pet-owner was responsible.

“We have a very high occupancy rate, which the owners are satisfied,” notes Numazawa. So it became much easier to work toward operating more collective housing complexes that allow pets after we’d established the first one and started moving along that path. More than a few owners are worried that pets will cause property damage to the interior of a property, but with the proper training, any damage there might be is minimal. The potential for damage caused by secret pet ownership in buildings where pets are banned is very real, and I think that allowing pets is one way to prevent that. What we do is charge an extra month’s rent for the initial deposit, and use this for restoring the apartment to its previous state, but the monthly rental fee remains at the same level as the non-pet allowed collective housing.

The know-how that this company has developed through its conscientious, persistent pursuit of pet-friendly collective housing is now leading the way to four new pet-friendly complexes, and is certain to be further enhanced through that effort.

As more companies cautiously build up their knowledge base,
Awareness among property owners is still a major issue in some areas

According to a number of people in the real estate industry, many of the newest items coming onto the market are in Kyushu. There are already, for instance, several buildings that allow only pet owners as residents. Still, even in Kyushu there aren’t many collective housing complexes that are both pet-friendly and allow occupancy by residents who do not own pets.

While views on the physical aspects of the issue, such as flooring and wallpaper, are fairly uniform, the bigger problem remains one of abstract aspects. Many companies are cautiously accumulating knowledge and seeking opportunities. We spoke to Hiroyuki Yoshizumi of the Operational Effectiveness Department in the asset utilization division at Miyoshi Real Estate, a major real estate and property management company in Fukuoka.

According to Yoshizumi, “Things like the prevalence of secret pet ownership are a clear indication that the need for it is there, and I see it as an effective way of increasing occupancy rates. But if we make any mistakes, we could lose the trust of customers, so we’re going about it with caution. Last fall, we began a project in which the people in charge of our management, planning and rental sections formed a project team to build up a base of knowledge and experience.

“We’re not so concerned about the physical aspects. It’s in the more abstract and social areas that we can imagine problems arising — things like trouble with neighbors, barking dogs or howling cats. A relationship of trust between the property owner and management company is crucial to what we do, so we can't afford any mistakes. I think that we’ll begin to work on collective housing where pet ownership is allowed only after we’ve thoroughly worked out a policy on this kind of problem and developed systematic responses. At this point, we’re discussing one by one such points as covenants and pet interviews.”

Different regions naturally confront different issues. Hannan Homes is a real estate and property management company operating in an area with few newly built units.

“As you might expect, the reason for allowing pets in most cases is that they’re trying to do something about low occupancy rates,” said Takanori Fukuoka, president. “There is a definite need, and lots of people say they want to keep pets. Some are also keeping pets secretly. But since there aren’t any preexisting collective housing developments that are outfitted physically to accommodate pet ownership, it is necessary to convert existing buildings. In either case, in order to convert a collective housing complex into a pet-friendly one, we started by notifying residents beforehand that pets may be allowed in one to two years. After their assent has been granted, the ground is laid for allowing pet ownership.”

Mishima Corp., which also operates in Osaka, manages six multi-unit housing complexes in which pet ownership is allowed. In this case, too, all of them were converted for pet ownership well after being built.

“The truth is that we’re still a long way from solving these problems,” said Daisuke Chijiiwa, who heads the management division at Mishima Corp. In Osaka, it’s customary for newly arriving tenants to pay a non-refundable deposit equivalent to five to six months’ rent, and most people assume that the tenant is responsible for paying 100% of the cost of restoring the property to its original state.

Most people simply don’t want their property to be soiled or damaged. We did manage to have pet ownership permitted in some places as a means of dealing with the problem of vacancies, but many owners want us to do what we can to switch back to a ban on pets as soon as the vacancy rate goes down again. This may be a regional trend, but not many newly-build condominium buildings permit pets, either. The need exists, but there are a great many issues that have to be dealt with. In order for pet-friendly housing to become genuinely widespread, it may be necessary for property owners to change their entire way of thinking.”

According to Mr. Tajima of the Japan Property Management Association, “We’ve been in a tenant’s market ever since 1991. The glut of rental housing has been particularly acute in the Kansai area because so much new rental property was built in the aftermath of the Great Hanshin Earthquake, and many residents have since recovered their former standards of living.

“That oversupply has, in turn, led to the construction of relatively few new properties. The overall market has stabilized, and there is now a tendency to favor the tenant. For residents, this is good news because it means an ability to find housing that suits one’s needs at relatively low cost. In the past, the cost of returning a property to its original state was borne entirely by the tenant, but now property owners have come to bear a large portion of the expense.

“In 1998, the central government issued guidelines on returning rental properties to their original condition. They are only guidelines, and therefore constitute general principles rather than binding rules, but they state that natural depreciation or wear is to be borne by the owner, a principle that has taken hold in many areas. Traditional modes of business are relatively strong in the Kansai area, but even there conditions are gradually changing. I think that the various bylaws and rules that regulate pet-friendly collective rental housing in different areas across the country are gathered, improved and put to one, it would become a very useful one. Something analogous to the “Property Management Support Handbook” would also be of great help.”

In 1998, a mere 1.1% of newly built collective housing coming onto the market were pet-friendly. Yet, by 2001, the pet-friendly percentage of the new housing supply was 19.1% (Real Estate Economic Research Institute statistics) When one considers what an enormous change has taken place in just four years, it becomes clear that a similar change in areas with low pet-friendly housing rates can’t be far off.

And as we have learned, it is becoming increasingly evident that in the current market with its oversupply of rental collective housing, many real estate and property management companies are in a situation to provide housing better tailored to the needs of tenants. This year, a great many companies are about to begin managing newly completed pet-friendly properties. Many issues remain to be resolved, but it is an unmistakable fact that the need for pet-friendly rental housing has become a larger force in the market, and that it is sure to increase further in the future.

New handbooks for dog and cat owners in multi-unit housing: the “Property Management Support Handbook” and “Pet Owner’s Handbook”

As previously mentioned, CAIRC’s effort to foster coexistence between humans and pets includes the publishing of two booklets that are distributed to whoever wishes to read them.

The “Property Management Support Handbook for Living in Multi-Unit Housing with Dogs and Cats” (or simply the “Property Management Support Handbook”) is intended primarily for real estate and property management companies, while the “Pet Owner’s Handbook for Living in Multi-Unit Housing with Dogs and Cats” (or simply the “Pet Owner’s Handbook”) is mainly for pet owners who already live in pet-friendly multi-unit housing or will soon be moving in.

The “Property Management Support Handbook” describes the advantages of allowing pet ownership and includes information useful in planning the management and operation of pet-friendly collective housing. It is distributed free of charge to organizations such as real estate and management companies. The handbook is also designed to provide real estate and property management companies interested in pet-friendly rental apartments with an easy to read material that will help them make the recommendation and explain it to property owners.

The “Pet Owner’s Handbook” provides information on the courtesy and etiquette necessary to keeping pets in collective housing. Through its distribution among pet owners, this booklet serves as a useful educational tool for real estate and property management companies, who can help residents who own pets improve the overall level of courtesy where they live. There is a charge of the actual cost of 100 yen per booklet, and orders are taken in units of ten booklets. Distribution of both booklets began on April 1, and thanks to publicity provided by newspapers and other publications, we received numerous orders for them from real estate and property management companies in the first three weeks afterward.

To place an order, please fax or e-mail CAIRC with the publication title and number of booklets you would like, your company name, type of business, name of the person in charge, shipping address and contact information. Also, please note that CAIRC cannot pay for the postage

The previously published booklet for pet owners “Living with Cats in Multi-Unit Housing” is also still being distributed free of charge as usual.