Summary of Remarks by

Mr. Jun-ichi Gouda

Director of Housing Development Division, Bureau of Housing,

Japanese Ministry of Land, Infrastructure and Transport

Mr. Gouda's opening remarks focused on:

-   An overview of the Japanese Aged Society

-   Housing Conditions of the Japanese Elderly

-   An Outline of Housing Policies for Japanese Elderly

-   Future Directions for Housing Policies for Japanese Baby Boomers

Mr. Gouda provided an overview of Japan's society, which is rapidly
aging (see PowerPoint Presentation for details). Those born between 1947
and 1949 "the Baby Boomers" are now turning 55 through 65 years old.
They will become the family of the elderly in 2015, and entitled to draw
from the social security pension. 2005 was a peak year for total
population due to high birth rates right after the Second World War. In
2005, 20% of the population was 65+. By 2015, this percentage will
increase to 26% and 36% by 2050. In 2005, 9% of the population was 75+;
this will increase to 21.5% by 2050.

It should be noted that individuals now between the ages of 30 to 35
years old are called "the Second Generation of Baby Boomers". They will
become the family of the elderly in the year 2015, who will be entitled
to draw the social security pension.

Although Japan is currently the oldest of the developed nations - older
than Italy and Spain - it is likely that Korea and Singapore will
rapidly becoming aging nations.

In terms of employment, 70% of the men between 60 and 64 are still
engaged in some professional activities and if the men between 60 and 64
who hope to work are combined, approximately 85% are categorized as
workforce - a relatively high rate in the world.

Savings:

The average elderly has a cash-flow of \$180,000.00 and assets in market
value of \$250,000.00. The question is how to maintain this financial
condition during old age.

In Japan, children (either a son or daughter) traditionally will live
with their parents when the parents become old and require some type of
care assistances. Traditionally, the eldest son and his wife are held
responsible for taking care of his parents. 45% of the elderly lived
with their son and his wife until 1983. By 2003, the percentage of
elderly living with their son and his wife was reduced to 15%. This
decrease may be due to the following life style changes; (1) exodus of
the younger generation to major metropolitan cities and larger cities
where co-habitation with their parents was difficult; (2) change in
housing and architectural design resulting in popularity of smaller
houses with modernized amenities; (3) lifestyle differences among older
and younger generations, with younger generations more receptive to
independent lives unencumbered by family, especially "in-law"
relationships; and (4) implementation of Japan's Long-term Care Services
Insurance System which provided more options for both parents and their
children to live separately.

In view of these life style changes both for parents and their children,
the Ministry of Housing, Infrastructure and Transport shifted its
housing policies to focus more on helping the elderly remain independent
and in their homes. Home and community based infrastructure programs are
now become the policies of the Bureau of Housing.

Mr. Gouda discussed how the elderly are managing the kind of problems
and difficulties with which they are confronted. The ratio of home
ownership of the elderly is about 85%, compared to the overall ratio of
60% for home ownership in Japan of any age. Approximately 10% of the
elderly rent houses or apartments (private market housings and
apartments). It is also necessary to scrutinize how they are managing
the housing costs.

The following concerns are being raised about housing for the elderly;
(1) their homes are aging and out-dated and about 16% of them require
renovations; (2) there is a shortage of ample sun-light and comfortable
and healthy conditions; (3) bathrooms, toilets and kitchens are
out-dated; (4) many steps in homes and apartments affect the mobility of
the elderly.

According to available statistics comparing housing conditions around
the world, the majority of the elderly in the United States prefer to
stay in their own homes as they age. In Korea, 12% of the elderly prefer
to live with their children and in Sweden, 30% of the elderly would
prefer to move into housing units for the elderly. In Germany, 13% of
the elderly prefer nursing homes whereas in Japan, 14% of the elderly
prefer to move into some type of hospital.

One of the main reasons Japanese elderly prefer to move into hospitals
is that medical treatment and attention are available under the
universal medical insurance system but this system is now under
consideration for revision. This proposed change in the system may
change their style of living as they age.

The next subject is whether or not houses or apartments in Japan are
appropriate for the elderly to remain in as they begin to loose
cognitive functional ability and stability. The Ministry has been
promoting programs to renovate and modernize out-dated and older homes
to meet the needs of the elderly. The introduction and implementation of
various financial assistance programs to modernize these homes is being
vigorously promoted but the fact remains that only 3% renovated their
homes as of 2003 and rented homes and apartments accounted for only
1.5%.

In order to promote and enhance this program, the Ministry embarked on a
new policy in 2006. The Ministry is promoting a comprehensive, total
infrastructure design approach, which includes encouraging the private
sector to play a more leading role, working together with both the
Central and regional level governments. This policy is called "the Basic
Program for Housing (2006\~2015)." The programs includes 13 policy
targets, of which 3 are related to anti-aging measures described in the
PowerPoint presentation. Basic concepts of these measures includes:

-   Encouraging "Barrier Free" housings. Financial assistance programs
    are available for both new and renovated housing, including
    subsidies, a special line of credit with a reasonable interest rate
    and tax benefits. All public housing units will be made barrier
    free.

-   Making programs more effective by situating institutional care
    services facilities and medical clinics near one another to
    strengthen coordination of housing and social welfare programs. This
    coordinated policy and strategic direction will address the
    increasing mobility of the Japanese workforce, helping to ensure
    that the elderly will be not left alone and there will be ways to
    address their loneliness and to cope with emergencies, if they
    should arise.

-   Sustaining the wellbeing of low-income elderly through availability
    of appropriate housing, including public housing programs. For
    example, priority for public housing is given to low income elderly.
    "Reverse- Mortgages" will enable the low-income elderly to move into
    better housing.

Renovation of public housing is now mandatory and must include "Day
Service" units. The Ministry has been promoting and implementing the
policy of "Life-Support Advisors" assigned to enhance the security of
the elderly in "Silver Housing." Public housing is made on loan to
providers of group homes for the elderly.

The Ministry has delegated the authority for housing promotion for the
elderly to prefecture governments and other regional governmental
entities who will determine which private sector construction and
housing companies are bona-fide licensees to provide quality rental
housing for the elderly. Financial subsidies from the central and
regional governments will help ensure reasonable rents. Registration and
access to records on housing easily accessed by the elderly and system
for guaranteeing rent arrears were established in 2001. Implementing
this system will reduce the reluctance by landlords who fear that the
rent will not be paid, or will be delayed.

The Ministry is also implementing a unique policy and program on housing
mortgage for home ownership. The following programs are in place:

-   The Japan Housing Financing Agency (Agency) is providing a line of
    credit at the lower rate for homes that incorporate barrier free
    architectural design and layout. (Some tax reduction is applicable
    and property tax reduction is also applicable).

-   Reverse Mortgages are available to the elderly who undertake
    renovation; the full payment of the loan for this renovation will be
    closed at the borrower's death.

-   Local government entities receive a "Financial Grant at Large" from
    the Government, allowing for more flexibility in developing priority
    programs appropriate to any given region.

Currently there are 2,200,000 units of public housing across the
country. Rental housings units for the elderly are increasing greatly in
numbers in recent years. Since 1990, new housing units (either
congregate units or single family detached housing units) are designed
to be barrier free. Units (10,000) built before the new policies were
implemented are being renovated as barrier free. Silver Housing and
multiple types of housing combined with Day Care Centers are being
promoted (See photos).

Quality rental housing for the elderly with cognitive impairments is
expected to grow as the population of the aged continues to expand.
23,000 units are being built (See photo in PowerPoint presentation of
group home built by a non-profit social and welfare organization in
Uozu, Toyama Prefecture.)

Currently, there are 100,000.housing units for the elderly built by
private sector companies. The Ministry has been promoting this type of
housing for the elderly, the handicapped and foreigners in cooperation
with private profit and non profit organizations and other entities.

In closing, Mr. Gouda discussed the importance of developing innovative
and practical policies and programs to cope with the newly emerging
issues of an aging society. It is not a question of how long one can
live but how to spend one's years with a sense of dignity and joy. The
government must create and enhance the infrastructural environment for
the elderly. Housing must be modernized to meet the needs of the elderly
and to allow them to remain in their homes as long as possible, with
easy access to needed care services. The elderly should be given options
to choose where they live. It is also important and vital that they have
the opportunity to lead their lives as normally as possible by being
involved in their communities in which they live with their devotion and
interest in what they deem to be the most valuable way of lives they can
spend in their aging period.

Additional information regarding reverse mortgages:

The Ministry began implementing one type of reverse mortgage program in
October, 2006. It is designed to "facilitate the rental of large houses
owned by the elderly to households with children and others who may
require a larger house." The aim is to ensure that the elderly have
incomes in order to relocate to new housing and that they generate
living expenses from rental fees of their homes

The Ministry makes it safe for the owner of the house to rent out their
houses with a guarantee clause in the agreement for the continued
payment of the renting fees which is assured by the public fund. The
central government will ensure payment of rental fees and will guarantee
against risk factors non-payment or delayed payment of the rental fees
by the tenant of the houses.

Another system of reverse mortgage is that the elderly pay only for
interest on the principal of the money borrowed. When the borrowers
dies, the total amount of the borrowed amount must be paid in full
either in cash or from the proceeds of sale of the house, condo or
apartment. This is designed so low-income elderly can renovate his or
her house to create a barrier free architectural layout.

The amount of the line of credit with the Lease Corporation depends on
the type of renovation, to include a barrier free layout and the
reconstruction of condos and apartments. The maximum credit is
\$40,000.00. The maximum for reconstruction of rental condos or
apartments is \$80,000.00.

The interest rate for the money borrowed from the Japan Housing
Financing Agency is 3:30 % (April 2007) at a fixed rate. This rate
decreases by 0.20% if rental renovations include "anti- earthquake
architectural structural methods."

Terms and conditions for establishing a line of the credit from the
Leasing Corporation is guaranteed by a newly created corporation -- an
arm of the central government. A market value of assets is used to
establish the line of credit.

Mr. Yusuke Kataoka, US Foundation for International Economic Policy,
provided translation and editing of Mr. Jun-ichi Gouda's remarks,
together with additional information and materials. These remarks were
edited for the Administration on Aging's website.

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