Targeted Standards for Floor Space in a Government Housing Plan: an Empirical Investigation of the Kanto Area in Japan

Abstract

We estimate a demand function for household floor space in the Kanto area in Japan by using a survey questionnaire, and conduct calibrations to investigate whether effective demand is consistent with the prescribed targeted or minimum floor space in Japan’s Basic Act for Housing. The results indicate that one-and two-person families can afford relatively large houses, but many three-person families with lower incomes and most four-and five-person families cannot afford housing that meets the Act’s targeted housing standards. This result implies that further subsidies are needed to achieve the Act’s targets.