Japanese government is eyeing on Compact City development of local regions, where urban and residential functions are integrated in the center. Land Ministry will start a subsidy system and tax benefits given to developers of hospitals and welfare facilities in central districts in fiscal 2014 starting this April.

Economic Ministry will also give financial support for construction of large-scaled commercial establishments in the city centers. Bills to amend relevant laws are to be submitted to the ongoing session of the Diet.

The government is accelerating reforming local cities because the provincial populations are getting smaller due to outflow to metropolitan cities such as Tokyo and growing aged population. The population of Japan is estimated at below 100 million in 2050. It is threatening that local functions such as hospitals and retail stores will diminish.

The situation made the government shift its policy of local development from the current suburb-expansion model to the compact city. Centered urban functions and administrative services near local rail stations are expected to contribute to keeping local vitality in depopulating communities.

(2014/01/29)