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Edited by: International Affairs Committee(IAC),
Member Tadao okada

No.25 March 2006

Trends in Urban Redevelopment in Central Tokyo
Table of Contents
III. Tokyo: Trends in Urban Planning

Naoharu Morishita

III. Case Study: Efforts in the Otemachi, Marunouchi, and Yurakucho Area
Tadao Okada
III. Urban Redevelopment in Tokyo: An International View

Tomokazu Arita

I. Tokyo: Trends in Urban Planning
Naoharu Morishita
Assistant Director, Chief Cabinet Secretary’s Office for Urban Renewal
1. Urban redevelopment as one component ofurban renewal strategies
After the crash of the so-called “bubble economy” inJapan, the country entered a broad recession, and many
areas—particularly large cities—found themselves hit
with an explosion of bad assets and underutilized realestate. Further, in addition to bottlenecks to economic
activity such as increasing traffic and overburdened
airports, many areas have yet to deal with the negative
legacy of the last century, including the fire dangers
posed by neighborhoods overcrowded with aging
wooden structures.
In the face of these conditions, both Tokyo and thecentral government have begun work on new urban
renewal strategies, an important part of which are avariety of urban redevelopment projects.
2. Development projects focusedon basic infrastructure
A critical part of Tokyo’s renewal efforts will centeron development of the basic infrastructure that sup-ports life in the metropolis. Most of these development
projects are moving forward under the aegis of publicagencies, and include roads, airports, and other transportation networks; rivers, forests, and other environmental infrastructure; and on disaster preparedness
development, including addressing safety and response
issues in high density urban areas.
(1) Transportation Infrastructure
Upgrades to the basic transportation infrastructure canhelp lower the high cost of economic activity in Tokyo,
and also relieve the burden on the environment. To
accomplish this, improvements are being made to therunways at Haneda and Narita airports, and work onrail networks will deliver even better access. Further,
the ports of both Tokyo and Yokohama are being designated as international “super center” ports, with agoal of both increasing operational efficiency and reducing costs to use the facilities.
Regarding highway infrastructure, upgrades are focusing on the orbital roads around the metropolis,
which are the most critical in supporting the city’seconomic vitality. As progress is made on the threemajor metropolitan beltways, it is estimated that the
average speed of traffic during rush hour will improvefrom 21 kilometers per hour to as much as 30 kilometers per hour, bringing not only economic benefits, but
a reduction in CO2 emissions and other air pollution.
(2) Environmental Improvements
Designs for the city of the 21st century will require
more than just efficient functionality—they must create
pleasant, healthy places to live. Today, Tokyo is
working to bring more green space back into the city bypromoting parkland growth, rooftop green planting aspart of new developments, and even the transformationof waterfront landfills into large-scale forest lands.
Work on rivers includes a project currently underway
to better integrate embankments with park space alongurban waterways such as the Shibuya/Furukawa River.
The city is also looking at the possible replacement of
the expressway running above the historic Nihombashi
River area, similar to the removal and replacement
underground of expressways in cities such as Boston
and Seoul.
(3) Urban Disaster Preparedness
In the hill area of Ariake, along the Tokyo waterfront,
the city is currently developing a staging area thatwould be used in times of a large-scale disaster. Workis also progressing on helping those areas most at risk
during an earthquake—the high-density urbanneighborhoods of wooden-frame houses—meet at least
the minimum standards for safety in a disaster situation.
3. Promoting private sector investment
in urban development
Renewal efforts cannot rely solely on the efforts of the
public sector, however. It is critical that the resourcesand expertise of the private sector also be attracted, andthat those resources are then aimed at creating new
demand for redevelopment. Given the central role thatTokyo’s renewal continues to play in the nation’s
economy, active promotion of private sector contributions to urban renewal efforts is the most effective way
to assure delivery of a more enhanced and functionallycomplete infrastructure.
(1) Designating “Urban Renewal Critical Development

Districts”
As focal points for actively promoting criticallyneeded private sector development support, majorurban areas have begun designating “Urban Renewal
Critical Development Districts.” There are now eightsuch districts in Tokyo, totaling over 2,500 hectares.
Redevelopment work in these specially designatedzones becomes eligible for financial support, and forspecial treatment under existing urban planning. Financial support includes interest-free loans for private
urban development agencies to invest in the building of
public facilities, as well as a variety of tax relief
measures. In the urban planning area, a system now
exists whereby private sector companies can put forth
proposals directly as part of the urban planning process.
Further, it is possible for certain areas to be designatedas special renewal zones under existing metropolitan
planning. This designation provides a highly flexible
process for applying new special-use definitions to
specific districts, allowing for exemptions to use, density, and other restrictions that may already be in place.
In Tokyo, three such zones, including the area along thewest exit of Osaki station, have already been designated. In particular, the ability to set floor-area ratiosthat may be higher than normally allowed has proved asignificant selling point for private developers.
(2) Special Exemptions on Floor-Area Ratios
In Tokyo, in addition to the above-mentioned special
renewal zones, there exists a process for providing
exemptions to floor-area and various other density
restrictions, and these have been used effectively to
encourage private sector developers to work toward
creating a more desirable urban environment. These
include the comprehensive design system under the
Building Standards Law, as well as the special zoning
system under the Urban Planning Law. These provisions allow for a relaxing of existing density codes inproportion to a development’s contribution to the enhancement of the local environment, via, for example,
the preservation of historical sites, the creation of
public facilities, or the guarantee of a certain percentage of public open space within a development. In thearea around Tokyo Station, for instance, a system toredistribute floor-area ratios among various developments has made it possible to plan for the
re-construction of the station’s historic central red brickstructure.
Such application of new and existing exemptions
encourages private sector development investment, andworks to further enhance central Tokyo’s position as acenter for international business. At the same time, it
helps expand redevelopment efforts to both the creationof a more attractive multi-use urban core, and the improvement of industry-based secondary city centers.
(3) Using the Private Sector in Municipal Development
Projects
There are also development projects in which Tokyo’s
metropolitan government takes the lead in renewing
and upgrading infrastructure and buildings. One suchproject is the redevelopment of the Ohashi Junction
along the Shinjuku Line of the central Metropolitan
Expressway, which will incorporate both roadwork andimprovements to the surrounding area. Such projects
aim for a more efficient use of available land by combining roadway and adjacent land development. Thismethod makes use of private sector expertise from theearliest planning stages, and also allows the private
sector to take over building redevelopment and management of unused floor space.
4. Other urban development issues
Compared with other metropolitan areas around thecountry, Tokyo’s urban renewal efforts are showing
progress. Still, it still lags behind in the area of natural
disaster preparedness, and needs to do better at developing for a better quality of life in the city of the
future.
(1) Disaster Readiness in High-Density Wooden Home
Districts
It is said that there is a 70% chance that Tokyo will be
hit by a magnitude 7-class epicentral earthquake in thenext 30 years. It is critical that safety measures betaken to protect the city’s high-density neighborhoodsof mostly olden, wooden homes. In addition to en-

couraging fireproof retrofitting of individual structures,
renewal of metropolitan roads and the areas adjacent tomajor thoroughfares is needed, and wide-scale redevelopment of these neighborhoods is increasingly
called for.
(2) Redevelopment of Smaller Buildings in the Urban
CoreTokyo’s urban core features many districts dense withsmall- and medium-sized office buildings. Many ofthese buildings are aging or decrepit, have high vacancy rates, and no longer function effectively as partof Tokyo’s international business center. In order torenew these neighborhoods, which are already beset byhigh density ratios, it will be necessary to make evenbetter use of the available land. At the same time, thetwin factors of a dropping urban business and residential population, and the possibility of continued growthin supply of large office building space, need to betaken into account when looking at plans for redevelopment.
(3) Environmental and Aesthetic Considerations in
Urban Redevelopment
As environmental issues become more criticalworldwide, urban renewal plans must look even moreclosely at ways to save energy and otherwise respondto environmental issues.
Also, in the past, our country has done a particularly
poor job of making conscious choices to create andpreserve aesthetically pleasing spaces. Beautiful cityscapes are a valuable asset to be passed down fromone generation to the next. Now, more than ever, there
is increasing discussion about the need to balance redevelopment with the preservation of historic districts,
landscapes, and even views of buildings like the Imperial Palace and the Diet. Redevelopment in the nameof “urban renewal” presents a valuable opportunity, but
it requires a conscious effort to take advantage of that
opportunity to create truly beautiful urban spaces.

II. Case Study: Efforts in the Otemachi, Marunouchi, and Yurakucho Area
Tadao Okada
Mitsubishi Estate (Member of IAC, CPIJ)
1. The Otemachi/Marunouchi/Yurakucho district(1) Description
Comprising 110 hectares, the offices of nearly 4,100
companies, and a worker population of over 240,000
people, this district lies between metropolitan Tokyo’scentral station, JR Tokyo Station, and the grounds ofthe Imperial Palace, and is seen as the center of international business in Japan. There are 8 JR and subway
lines and 13 stations used by over 920,000 people a day,and the revenue of the companies headquartered herethat are listed on the first section of the Tokyo Stock
Exchange represents nearly 20% of Japan’s GDP.
Including buildings under construction, the district
features 105 major office buildings with a floor spaceequaling nearly 6.4 million square meters. It has thehighest floor-area ratio in the country at 1300%, withan average ratio of 1200%, and a floor-area use rateoverall of 79% (for an approximate floor-area ratio of943%). For private properties alone, floor-area use is
at 85% (an approximate ratio of 1,020%).
At the same time, because office construction began
so early in this part of the city, nearly 30% of thebuildings in the area are more than 40 years old, and theneed for functional upgrades is becoming an issue.
(2) Development History
Phase 1In the Edo period, this area was lined with the mansions of feudal lords, but after the Meiji Restoration,much of the land was turned over to the new government, and was then occupied by the headquarters of theImperial Army. When those headquarters were relocated in 1890, the lands passed down to Mitsubishi, andin 1894 Mitsubishi began construction on its first officebuilding in the area, followed by the construction andopening of Tokyo Station in 1914, and the original
Marunouchi Building in 1923. This marked the first
appearance of a real “business district” in Japan.
Phase 2After the mid-1950’s, the country entered its period ofhighest economic growth, and businesses expanded
rapidly. 1963 saw a revision of the Building Standards
Law, and with it the elimination of absolute height

restrictions on most buildings, to be replaced by asystem of floor-area ratio limits. In order to respondthe growing need for office space, more consolidation
brought with it construction of higher-density officebuildings. The office buildings that went up in this era
are particular in their singular suitability to commercialuse.
The period following the mid-1970’s saw more andmore companies consolidating their key functions in
the Tokyo area, but at the same time office supply in the
district was increasingly limited, leading to a chronic
shortage of office space just as many of the older
buildings saw their useful functionality adversely affected by their age.
Phase 3
With the crash of the “bubble economy” in the second
half of the 1990’s, the corporate focus turned to internationalization and the issues of the information age,which brought a need for better-quality, more highly
functional office environments. Construction of large
office complexes was dispersed to neighborhoods beyond the traditional core, and this area saw a drop in its
role as a center for business.
At the same time, with Tokyo city planners focusing
more on creating an internationally competitive infrastructure, the call went out to build not only morefunctional commercial structures, but to diversify beyond just office space, in hopes of developing a more
attractive, multi-functional urban landscape. Thisarea’s designation was changed from a CBD (Central
Business District) to what is commonly known in Japan as an ABC (Amenity Business Core), and the redevelopment now being seen is taking place under thepolicies of this new designation.
2. Urban renewal in the district(1) Public-Private Partnerships
In 1988, landowners in the district formed the Otemachi/Marunouchi/Yurakucho District Redevelopment
Projects Council (hereafter, the “Council”), with thegoal of solving the issues of commercial functionality
in the information/internationalization age, and promoting concrete, comprehensive plans for the renewalof the district. In order to enable the various land-owners to share common concerns, and to focus on aconcrete discussion of what the district should look likein the future, sub-committees based on specific themes
were created, and at the same time research, opinion-gathering, and other efforts to increase the collective knowledge of the members were undertaken.
In 1996, under the principles of public-private partnership—which call for the public and private sectors
to establish common goals, cooperate in assuming
specific roles, and work to encourage a sharedframework for the creation of urban development
policies—the city of Tokyo, Chiyoda Ward, JR East,and the Council came together to establish the Otemachi/Marunouchi/Yurakucho
District
RenewalCommission (hereafter, the “Commission”).
Further, in 2002, a non-profit organization wasformed, consisting of not only the landowners, but
tenant companies, workers, and academics, and wascalled the OMY Area Management Association (hereafter, the “NPO”). The NPO is responsible for volunteer-based efforts at environmental improvements inthe district, as well as organizing events and seminars,
undertaking corporate market research through the useof its research monitor pool (now nearly 600 members),
and providing other services to build its financial base.
(2) Establishment of Guidelines
In 2000, as part of the effort to establish a common
vision for the district, and to set down the basic
framework of rules and methods for its realization, theCommission
drew
up
the
“Otemachi/Marunouchi/Yurakucho Redevelopment Guidelines” (hereafter, the “Guidelines”). The document set
forth eight major goals for the future of the area, andalso established a roadmap for meeting those goals
based on looking at the area in terms of zones, axis, andkey hubs. Some of the Guidelines call for taking advantage, in future urban design, of the area’s “verticalaxis,” the unique cityscape imposed by the 31 meterheight restriction under the old building code, andothers for the creation of networks of public parking, as
well as networks of above- and below-ground pedestrian walkways.
While the Guidelines represent something of a “gentlemen’s agreement” and are legally enforceable,companies involved in redevelopment projects willfind that local government will be looking at how
consistent their plans are with the Guidelines.

(3) Specific Examples
As of the end of December 2005, 10 projects are underway based on the Guidelines noted above, and ofthese, 8 are in active development.
a) Marunouchi Building
The former Marunouchi Building was constructed in1914 as one of the first American-style high-rise officebuildings. However, with the Hanshin Earthquake of
1995, and the questions it brought about quake resistance in older buildings, the original structure was
replaced in 2002 with a 37 story above-ground, 4 story
underground multi-use building 180 meters tall, with a
combined floor area of approximately 160,000 square
meters.
From an environmental standpoint, the new building
is notable for its recycling of construction waste andfocus on zero-emissions processes during the building
phase, as well as for its use of air barriers and outside-air cooling systems, which help reduce energy
consumption as much as 30% when compared withsimilar new buildings of traditional design. The
building’s food and beverage outlets also recycle 100%of their raw food garbage (nearly 15 tons a month) as
feed for pig farms.
Within one year of its opening, the new building hasseen visitors grow to nearly 24 million annually, andthe retail businesses alone generate almost 31 billion
yen in sales a year. During the week, visitors are split
evenly between men and women, but women represent
over 60% of weekend visitors, and the active shopping
segment is mostly women in their 20’s-40’s. Visitor
counts and sales on the weekend now exceed weekday
numbers.
This building is playing an important role, by showing
why the area as a whole needs to get away fromthinking of itself as a male-centric business district on
the weekdays and virtually deserted on the weekends,
and begin looking seeing itself as a town that is truly
open 24 hours a day, 365 days a year.
b) The Industry Club of Japan Building
The Industry Club of Japan Building is an historic
structure built in 1920 as a gathering place for theleaders of Japan’s financial community. Unfortunately,
its age has brought to the surface escalating maintenance costs, its inability to meet the needs of its modern-day members, and questions about its quake resistance. By having the structure registered as a Tangible
Cultural Property, it became possible to preserve partof the original building, take advantage of funding
support and various tax exemptions, and increase its
allowed FAR while incorporating the structure into theoverall redevelopment of an adjacent property.
c) The Tokyo Building
The Tokyo Building is a primary commercial-use office building that began construction in 2005. Its construction employs the comprehensive design system,
while also taking advantage of two of the floor area
ratio adjustments under the Guidelines: shifting theproperty’s allotted floor area capacity to the district,while also pooling its
actual volume usewith that of the district.
At the same time, by
shifting the surplus
capacity of neighboring Tokyo Station’s
red brick terminalbuilding, they wereable to also switchthat portion of theircapacity that, under

the comprehensive design system, was supposed tohave been dedicated to non-office use, to the PeninsulaTokyo project which was under construction at thesame time, effectively allowing the Tokyo Building toremain exclusively office space, while the Peninsula
was able to move forward exclusively as a hotel.
Note: The floor-area ratio standards have recently
been revised (from 1000% to 1300% in some areas),
and the district plan now calls for at least half of theadditional 300% in capacity, or 150%, be devoted toother than office space.
(4) Interaction Projectsa) Naka Avenue
This avenue, which cuts north-south through the district, is a key axis for both business and leisure activity.
As part of its renewal, the focus was kept on its position
as a pedestrian-centered area, and making full use of
the streetscape provided by the older (i.e. 31 meter
maximum height) buildings fronting the avenue.
Building owners were encouraged to bring more retailshops into their street-level spaces, and sidewalks werebroadened and repaved, bringing a more enjoyable
human scale to the experience. This has greatly increased Naka Avenue’s contribution to the area, both indrawing pedestrians into the district, and in terms ofincreased retail activity.
b) Marunouchi Café
This café is almost an indoor park-like environment,
enjoyed freely by workers in the area and visitors alike.
With free Internet access and plenty of the latest
magazines, the café gets nearly 1,000 users a day, andhas grown into a true communication hub for theneighborhood.
c) Tokyo Millenario
This display of holiday illumination along Naka
Avenue first started in 1999, and during its nine days ofoperation in 2005, saw almost 3.3 million visitors. In
total, 17.7 million people have visited the Millenario in
the seven years since its inception. It has become an
important event for promoting the district and bringing
in visitors.
d) Marunouchi Frontier
Many stately, giant corporations call Marunouchi
home, but efforts are underway to encourage new
business development in the district, and this project isdesigned to help build a network of venture capital,

consulting, and other smaller businesses. Not only
does the location allow for more face-to-face communications, but there are also opportunities for venturecompanies to rent space at a discount to market prices,in buildings that are slated for redevelopment in two or
three year’s time. Some companies are offering warrants in their own planned public offerings in lieu oflease rents, and other efforts are underway to support
young and growing companies.
3. Future Redevelopment
The future of urban renewal in our area depends, evenmore than ever, on effective discussion and sharing ofideas among all involved. Three keywords have continually come up in discussions in the past.
First, the sustainability. Urban renewal projects will be
expected to focus more on environmental issues thanever before, and they will have to go beyond simple
building-by-building energy savings, to looking at
broad networks of water, wind, and greenery, andeventually incorporating a wider vision that takes into

account the environmental needs of the entire area.
Second, the use of public spaces. Currently, there are
numerous restrictions on the use of public spaces
throughout the district. A more effective collaboration
between the management of public spaces and theowners of adjacent private properties will be essential
to the creation of entirely new kinds of spaces for
performances and events, and a more enjoyable pedestrian experience for everyone.
Third, area management. As competition between
cities, and even between urban neighborhoods, continues to grow, it is important to look at redevelopment
not only in terms of putting up buildings, but also interms of how that connects with other urban renewal
efforts, and how they all come together to increase thevalue and attractiveness of an area. Continued cooperation among, and collaboration between, all stakeholders in the area management effort, will foster asense of this being “our town,” and sense of identity
and uniqueness that will in time lead to even greater
competitive strength.

III. Urban Redevelopment in Tokyo: An International View
Tomokazu Arita
University of Tsukuba Graduate School of Systems & Information Engineering
1. Government-led Urban Redevelopment Focuseson Tokyo
The first moves toward a concrete set of policies related to urban redevelopment came about with the May,
2001 creation of the Urban Redevelopment Office,under the “Structural Reform” flag of the
newly-formed Koizumi Cabinet. Implementation of
the Urban Redevelopment Special Measures Law inJune of the following year brought with it two key
provisions: One, a loosening of restrictions on urban
planning and developers (including enabling urban
development corporations to make planning proposals;
creating special development districts that could be
excluded from existing urban planning restrictions, andsetting deadlines on the time frame between initial
proposals and actual decision-making); and two, creation of a system for providing financial support toprivate sector urban renewal developers (in the form of
a new urban renewal fund aimed at directing private
sector funds to investments in private sector developers,
and in supporting investments in, and guaranteeing
bonds issued by special purpose companies—SPCs—with specific, targeted operating goals.
The overall direction of future urban renewal efforts isfurther outlined in the following excerpt from the basic
policy statement:
Section 1: Regarding the Goals and Significance ofUrban Renewal
1: The importance of urban renewal
As we enter the 21st century, our cities are increasingly at the core of our nation’s vitality. Urban renewal
plays a basic and significant role in helping us to address the rapidly changing socioeconomic climate,including issues of internationalization, a low birthrate,
and an aging population, while making our cities bothmore attractive and more internationally competitive.
Urban renewal can also boost economic recovery, bydirecting the power of private sector investments andexpertise to urban redevelopment, thereby generating
further demand. By increasing the liquidity of available real estate, it may also aid in solving the lingering
bad debt issue.
2: Urban renewal goals

The redevelopment of our cities must balance thepreservation of history and culture with the need tocreate cities that are both lively and livable, that are
seen internationally as rich in vitality, and that become
places of pride for future generations. (Excerpted)
Beginning in 2001, the Urban Redevelopment Officehas also pointed to a variety of infrastructure, public
safety, and scientific projects as key targets in the urban
renewal effort. These include further improvements tobasic infrastructure such as the Narita and Haneda
airports and the three major roadways encircling metropolitan Tokyo; further development of urban waste
management and recycling facilities; improvements tonatural disaster planning and response systems, particularly in high-density residential areas; projects
aimed at making the region an international center for
genome research; and efforts to further promote the useof private finance initiatives.
Much of the background leading to the rising importance of urban renewal as a strategic issue has been
related by the head of the Urban Renewal Strategy
team, Professor Shigeru Ito of Waseda University (inthe section “On the Forefront of Urban Renewal ” inthe publication “Perspectives on Issues in Urban Renewal”). Specifically, looking back at the Obuchi administration’s 1999 “Economic Strategy Council: Rebuilding the Japanese Economy,” at the Mori Cabinet’s“The Urban Renewal Roundtable: The Redevelopmentof Metropolitan Tokyo; Building a More Attractive
International Metropolis,” and at reports from the Tokyo metropolitan government, including “A Vision forTokyo 2000,” and “The Metropolitan Megalopolis,” Dr.
Ito points to the fact that “urban renewal” has, for allpractical purposes, come to mean primarily the redevelopment of Tokyo,“What redevelopment efforts in the Tokyo metropolis
require is an understanding of how to create a city thatis more attractive by international standards. Looking
at the global trends of increasing borderlessness and ashift toward a postindustrial, information economy, it isclear that a unique ‘attractiveness’ is what will drivepeople and businesses to a particular city.

For theTokyo metropolitan area to survive as part of the global
economy, it is crucial that increasing its overall appeal
as an international center become the focus of its urban
development goals. “(Excerpted from “The Redevelopment of Metropolitan
Tokyo: Building a More Attractive International Metropolis” November 30, 2000, The Urban Renewal
Roundtable)”The rapid urbanization of Japan has passed its peak,and now our country faces an era of low birthrates, anincreasingly aged citizenry, and an overall drop in
population.

The urban policy issues that drove

post-War Tokyo—how to cope with the increasing
concentration of the population in the city, and therapid growth of industry—are now at a major turning
point. After growing to become one of the world’s
major metropolises, Tokyo must now reassert its place
as a key center for Asia, and as the driver of our prosperity as a nation. To do this, it must not only continue
to function as our nation’s capital, but it is essential thatit continue to develop into a city with the strength andvitality to withstand the increasing global competitiveness of the 21st century.”(Excerpted from the outline for “A Vision for Tokyo
2000”)
It is clear that as globalization and the growth of aknowledge-based society continue, so does the growthin direct investment across national borders, bringing
with it an increasingly mobile knowledge workforce.
Given this, it is important that cities (or metropolitan
areas) work to build an environment that is attractive toall, to remain globally competitive. For Tokyo, dealing
with the bad debt problem that has dragged on theeconomy throughout the 90s, by boosting Tokyo land
prices and bringing vitality back to the real estatemarket, is an essential step. Some believe that Tokyo,
and Japan as a whole, have already begun to lose theirglobal competitive edge.
As can be seen in Saskia Sassen’s “Global Cities,” orthe Loughborough Group’s “GaWC” inventory ofworld cities (Cities are ordered in terms of worldcity-ness values ranging from 1 to 12; J.V. Beaverstock,
R.G. Smith, and P.J. Taylor, “A Roster of World Cities,”
GaWC Research Bulletin 5. Loughborough: University of Loughborough), which Sir Peter Hall quotes in
his own work, Tokyo has often been put at the top of
the list of the world’s major cities. But look at the data
quoted by the Urban Redevelopment Office, from the
Swiss-based International Institute for Management
Development’s (IMD) World Competitiveness Centerin their annual Yearbook of World Competitiveness;
Japan’s overall global competitive strength has actually
decreased. From 1989 through 1993, Japan was consistently ranked number one in the world, but by 2005,
it had fallen to number twenty-one on the list, ranked
well below neighboring Asian cities such as Hong
Kong (second), Singapore (third), Taiwan (eleventh),
and China’s Zhejiang Prefecture (twentieth, adjacent toShanghai). With its continuing rapid drop in population, an aging population and falling birth rate, Japan is
expected to face an inevitable shrinking of its economic
base. Should foreign corporations and investors begin
viewing Tokyo as nothing more than an entry point to a
country with an ever-contracting economy, there is no
way the city can maintain its position of importanceversus its rapidly-expanding neighbors in Asia.
This focus on the city as an economic center is increasingly common in the globalized economy. Particularly in economics, the work of Fujita and Krugmanin spatial economics (the “new economic geography”)
has focused on the benefits of an urban concentrationof economic activity, and in management theory, Michael Porter’s “The Competitive Advantage of Nations,” as well as his work with “competitive clusters,”
have gained a great deal of attention. As is further
noted in the ideas of geographer Allen Scott’s “Global
City-Regions,” increased globalization and borderlessness has brought with it a reevaluation of the importance of global city-regions or urban buildup as ameasure of global competitiveness. Porter’s theory ofindustrial clusters has had a particularly significant
effect on regional strategy, not only in Japan, but also
throughout Asia and the West, further increasingawareness of the need to make strategic decisions that
increase the strength of those growing regions most
expected to be able to compete globally. In that respect,
Japan’s cities have never really taken full advantage ofthis economic concentration, and the country’s
economists continue to press for an approach to urban

revitalization that focuses more on using market forcesto achieve this kind of concentration.
Given this background, it is understood that the primary focus of Japan’s government-led urban redevelopment strategy is the strengthening of the metropolitan Tokyo area’s role as a “global city-region.” All of
the projects proposed as part of the renewal effort are ofshort term, critical importance—basic infrastructure,
the environment, and disaster planning—but it is too
early to judge the results of these efforts. Still, there
remains room to argue whether or not these projects,
taken together, represent the kind of comprehensive
redevelopment strategies needed to truly build andmaintain Tokyo’s standing as a major, globally competitive metropolis. In following sections, I would liketo examine the direction urban renewal is taking in theTokyo area, focusing particularly on the concept ofdiversity as the key to approaching a more globalized
economy and an increasingly knowledge-based society.
2. Criticisms of Current Redevelopment Policies
There has already been a great deal of debate from avariety of viewpoints concerning current urban renewal
policies, with particularly negative opinion focusing onwhether or not these policies really lead to the creationof urban spaces suited to the people who must live andwork in them. Some of these criticisms include, 1) that
increasing the focus on Tokyo alone only increases
regional disparities; 2) that central government-led
policy development goes against the move toward
greater regional autonomy; 3) criticism of policies
based on loosening of restrictions on land use andbuilding design, and a lack of participation in suchpolicymaking; 4) over-promotion of development
plans that primarily favor ultra-high rise designs favored by major developers; and 5) that policymaking islacking in a “grand design,” and fails to take into account the continued aging of the population, the fallingbirthrate, and the inevitable drop in population.
As noted earlier, issues 1) and 2) are a result of a redevelopment policy direction that favors increased
concentration of economic activity and population in
the cities. Let’s look at the example of the use of realestate securitization, or J-REITs. On the one hand, thistactic can be applauded as an effective measure forproviding a more transparent investment process, revitalizing both foreign and domestic investment activ-

ity. On the other hand, it has also been seen that financial institutions in declining regions, faced with alack of any viable investment targets for their surplus
funds, will instead invest in J-REITs built around realestate assets in the Tokyo area, further depriving theirown regions of economic activity. Clearly, even should
Tokyo itself win out by concentrating all of the available capital and human resources of the nation in one
place, creating a single enormous regional megalopolis,
this would not necessarily be a desirable outcome forthe country as a whole. Even in ongoing discussions of
the introduction of a comprehensive regional system,
the role Tokyo should play in such a scheme has provena subject of difficult debate. The position of a“too-powerful” Tokyo in the overall direction of thenation must be taken into consideration in policymaking at the central government level. While beyond thescope of this paper, it is hoped that the growth of specially-designated city-class metropolitan regions outside of Tokyo, and the move towards regional revitalization centered around independent regional efforts—as seen in the National Model for Urban Redevelopment, the creation of designated structural reform
districts, and the Regional Revitalization Act—will
eventually bear fruit.
Issue 3) above is not an issue necessarily unique torecent urban redevelopment policies, but is endemic in
the land use regulatory system itself. Under privatization efforts and systematic deregulation undertaken by
the Nakasone administration through to today, repeatedreviews of land use regulations have focused on theeconomic benefits of a more fluid real estate market.
As a result, while the system for proposing new land
use has grown more effective, it has not been able toaddress some very basic problems, such as the continued escalation of local tensions surrounding
high-rise condominium development. This is because
the current regulatory structure is strongly pre-disposedto certain kinds of development, and has not been effective in managing these issues. Particularly in termsof managing comprehensive design projects, it has
been demonstrated that the system rewards the developer with a distorted path towards huge profit, while
the neighboring residents suffer the often-serious
economic consequences. Looking at current redevelopment policy, in 2002, Tokyo revised its Environmental Impact Assessment ordinance, loosening restrictions on what types of development should be thetarget of environmental assessments in specially designated regions, and shortening the time required forsuch assessments, and this too has faced criticism.
What is needed today is a system that provides fordiverse debate between both residents and experts, andfor fairly evaluating the external effects of, and managing discussion about, building and development
projects above a certain size, projects which not only
have a real physical effect on their surroundings, butwhich can deliver broad external economic, social, andcultural benefits to their communities.
Points 4) and 5) above will be discussed in greater
detail in the following pages.
3. Urban Space and Concentration, Diversity, andTolerance
What conditions are most desirable for a city tobenefit from a concentration of resources as part of an
approach to increasing globalization and a more
knowledge-based society? According to the results ofresearch conducted into urban growth and concentration by E.L.Glaeser and others at Harvard University,
the greater diversity of industries to be found in a region, the greater its competitiveness, which leads inturn to urban growth. They refer to this as a case inwhich the so-called Jacobs Externality can be observed,
based on the writings of Jane Jacobs in her book “TheEconomy of Cities.” In this work, Jacobs focuses particularly on the importance of creating a diverse concentration of small and medium-sized businesses.
Further, Richard Florida, in his “The Rise of the Creative Class,” points to three measures that most effectively characterize America’s high-tech metropolises,
the Melting Pot Index, the Gay Index, and the Bohemian Index. The creative class, leaders in any knowledge-based society, is made up of a diverse collectionof human capital (as indicated by the nature of his
indices, particularly the “gay index”), and the moretolerant a community is of such diversity, the moreadvanced it becomes. He goes on to mention San
Francisco as one example of such a city.
This being the case, exactly what kind of urban space
best fosters this sort of diversity and tolerance? Jacobs,
in her work “The Death and Life of Great American
Cities,” points to the commingling of business andresidential areas, small-scale urban divisions, and adiversity of building sizes, shapes, and life spans asimportant factors. She also emphasizes the importanceof so-called “social capital,” or the creation of human
networks based on trust relationships. Her points arestill valid in today’s world. Many of the redevelopment
projects facing criticism today are singled out for theirgreat height and vast scale, for creating urban spaces
which are islands unto themselves, divorced from theneighborhoods around them. This doesn’t mean thatworld-class business districts such as the Marunouchi
area should come under similar criticism, nor does itmean that all ultra-high rise development is necessarily
bad. Still, neither can one argue that it would be desirable to have nothing but homogenous, high-rise,large-scale development, either. As Jacobs points out,by making effective use of an available supply ofsmall-scale, affordable real estate, you can provide
opportunities for new ventures to get off the ground, orfor a diverse group of young people with talent to participate in their communities, invigorating theneighborhood and further strengthening the diversity of
its resources.
Looked at from these issues of “concentration” and“diversity,” the example of the Akihabara/Kanda region in Tokyo, which was designated an Emergency
Development Area under the current urban redevelopment plan, presents an intriguing dichotomy. The
centerpiece of the development plan for the area focuses on the area around Akihabara Station, the site of
the old Tokyo Kanda Market and formerly National
Railway lands, which are now being redeveloped under
the auspices of the Tokyo Metropolitan Government tocreate a new global IT center connected to the surrounding Akihabara “electric town.” The pillar of therenewal effort in the district is the Akihabara IT Center(consisting of the Akihabara Daibiru and the UDX
building), of which the UDX Building, at twenty-two
floors above ground, three floors below, and a total areaof 160,000 square meters, offers the nation’s largest
per-floor office space, with nearly 4,800 square meters
on each floor. Leading the development of the UDX
building is a special purpose corporation that sponsors
the developer companies involved, and funds for construction were raised through the issuance of securities.
That funding includes project bonds held by securities
firms, and a senior loan held by one of the nation’slargest financial institutions, along with a mezzanine
loan provided through the Urban Redevelopment Fund(the first investment fund put together by the Development Bank of Japan). The UDX Building projectmay be representative of the new wave of government-led policy-driven redevelopment projects in its
use of this kind of diverse funding.
On the other hand, the area surrounding this redevelopment district, Akihabara’s “Electric Town,” consists primarily of a high concentration of older, small
multi-use buildings, in contrast with the shiny new
high-rise construction going on around it. The area,
once the center of home appliance sales, moved on tocomprise mostly personal computer-related businesses,
and since the late 90s has undergone a third, even moresudden transformation into a Mecca for the (sometimes
less than wholesome) “anime-otaku” crowd. In otherwords, from its inception, the district has managed tocontinue to grow and change on its own, positioning
itself now as an “industrial cluster” for the very IT,
anime, and digital content products so representative ofJapan’s export market today.
Further, the neighboring areas are seeing new development as part of the SOHO town vision for Chiyoda
Ward as a whole. The town is continually looking atways to improve its overall management, by addressing
the rapid increase in vacancies in its many mid-sized
office buildings, improving building earthquake resistance, and supporting new businesses by encouraging
office conversion to SOHO use and helping owners
find tenants. In particular, by working to attract young
knowledge-based workers such as designers and art
directors to the smaller office buildings, and at thesame time encouraging the growth of new venturebusinesses, the town is hoping to create new kinds ofcommerce by connecting this population of workers
with existing businesses in the area. They have alreadybegun to see a revitalization of the neighborhood, as
young newcomers begin participating more in Kanda’s
neighborhood boards and festivals, breathing new life
into thisThis latter case can be seen as a validation of Jacobs’s
theories, and this is where a hint may lie about theconnection between global competitiveness and urban
concentration. In other words, in order to encourage
the concentration of small-scale, knowledge-based
businesses, you need to provide both work and residential space in close proximity, make effective use ofa stock of existing, smaller buildings, and encourage
the growth of social capital in the neighborhood, all ofwhich, combined, represent an important alternative
path to urban renewal. It will be interesting to see howthese two very different approaches work side by sidein the creation of this new global IT center in the heartof Tokyo’s “Electric Town.” We look forward to further developments.
Finally, while different in many ways from the Akihabara district, in the sense of town management that
goes beyond individual buildings to incubate a real
sense of neighborhood social capital, management
efforts underway in the so-called OMY area (the Otemachi/Marunouchi/Yurakucho district), and in the
Marunouchi Frontier neighborhood, certainly bearfurther watching.
4. Creating Urban Spaces for the Next Generation
In order to create urban spaces that can be carried overto future generations, it is necessary to view property
and building use and management over a long period oftime. Further, given the aging population and fallingbirth rate, Japan faces a continuing population drop,
which, as it worsens, will mean that the Tokyo metropolis will no longer be able to rely on a regular inflow of new residents from surrounding regions. Somehave pointed out that, given these circumstances, notenough debate has been devoted to a wider-reaching“grand design” in the creation of urban development
plans. Let us take a look at the example of Germany,
which faces the same aging, falling birth rate, andsubsequent drop in its working-age population.
The United Nations Population Division, in its report“Replacement Migration: Is it a Solution to Declining
and Aging Population?” carries the results of a study
which shows that in order to maintain their working
age populations (those between 15 and 34 years of age),
Germany and Japan would each require an annual migrant influx of at least 487,000 and 647,000 people,
respectively. Germany, which established new immigration regulations last year, has decided to give preferential treatment to those skilled workers who aremost likely to contribute to the nation’s productivity,
and to those with considerable assets in their possession. One example often given of the results of thispolicy is that the country’s national soccer team is now
supported largely by the efforts of talented foreign
players.
At the same time, in the nation’s capital of Berlin, avariety of new development projects are taking shapearound the former East German territory. The newAdlershof Research Technopark, with Humboldt Uni-

versity at its center, is being built near the new airport,
and the concentration of research facilities is being
designed within reach of new housing, as well. In the
Marzahn district of old East Berlin, meanwhile, efforts
are underway to renovate and downsize the vast tractsof low-quality Communist-era apartment blocks. The
government is thus pursuing a dual track toward development: creating new clusters of development
where future growth is likely to be centered, and at thesame time focusing different policies on those areas
where population decline is predicted to continue. In
the center of the city, the Hackeschen Höfe—a classic
example of redevelopment through the renovation ofanhistoricalretail/business/residential
structure—recreates the Berlin of the 1920s, when a mostly
Jewish foreign population was an active part of city life.
A Jewish Museum, and a Holocaust Memorial, are alsopart of recent development in the city center. Further,as was the case with IBA Berlin, redevelopment of thearea surrounding Potsdam Square brought world-classarchitectural talents to the city, while also attracting its
share of controversy and long drawn-out, diverse debate before becoming an reality. Overall, however, theunderlying theme is one of continuing social investment supported by a long-term vision.
Given the example of the urban renewal efforts in
Berlin, the question of how the Tokyo metropolis cancreate and maintain a redevelopment strategy in thisage of globalization and a society based on knowledge
assets can perhaps be answered with the keyword“diversity,” in the following five ways: 1) diversity ofhuman resources, 2) cross-project coordination and thedevelopment of a “grand design” that brings diversity
to the city as a whole, 3) preservation of historical andcultural diversity, 4) a governance system that supports
a more diverse urban society, and 5) development ofdiverse funding mechanisms that make possible social
investments based on a long-term vision.
First, regarding point 1) above, look at the situation
with our national sport, sumo wrestling—today it is
supported largely through the efforts of very talented
foreign wrestlers. Isn’t it possible that the same will
eventually be true of many other fields of endeavor? In
Tokyo (where the future population has little say inplans being laid today), as in Germany, it is more thanlikely that a certain number of immigrants and foreign
workers will become a permanent part of the city’s
working and residential population, yet one mustquestion the creative ability of present-day planners todesign that kind of diversity into their development
plans for the future. This take us to point 4), which
addresses in part the darker side of growing social
diversity, namely the need to address issues of public
safety and the real difficulties in integrating a diverse
population; much more discussion is needed regarding
the creation of a governance system that is accepting ofsuch diversity, and the social decision-making processneeded for it to function.
Looking at points 2) and 3), Tokyo is certainly a cluttered city, lacking in the cohesiveness and sense of
grand design seen in many Western capitals, still, some
say that is where Tokyo’s unique charm lies, and thatmaybe it doesn’t need an overarching grand design.
While this view might lead to a positive focus on
maximizing each individual project, it doesn’t leave
much room for coordinating across projects to ensure
the growth and preservation of a diverse environment
across the entire cityscape. As in Berlin, what isneeded is a vision that, on the one hand, supports concentrated growth in certain key centers, while providing for strategic downsizing policies in areas where
population loss is progressing. Further, assume that an
urban design based on visual integration would indeed
be difficult. As was seen through research in the 80s on
the Edo vs. Tokyo issue, if Tokyo’s appeal is indeed
rooted in its traditional use of space, then shouldn’t it
be possible to increase that appeal by respecting thosehistorical principles in future planning, different
though they may be from Western concepts of urban
space? And last, like Germany, Japan needs to address
its historical issues with its neighbors in Asia, and determine how it wishes to reflect the memory of thishistorical diversity in its urban spaces. In any case,there is unquestionably a need for some kind of “granddesign” that can provide an all-encompassing view of
the Tokyo region.
Finally, regarding point 5), it is clear that current urban redevelopment focuses primarily on economic
measures, with a great emphasis on speed. In the past,
not much attention was paid in Tokyo to preservingbuilding stock, and the lifespan of the average building
was generally short; the city essentially underwent an
ongoing series of “model changes.” For example,
many of the buildings first put up in the 1970s under
the Urban Redevelopment Law are now fast decaying,
and are themselves targets of redevelopment. Onewonders just how much of the building in Tokyo between the end of the War and today was even done withany thought to future generations. For that matter, howlong will the buildings going up as part of urban redevelopment projects today last without decay? Development in the area around Tokyo and Yurakucho
Stations, which have been designated “Special Emergency Redevelopment Zones,” has focused a great deal
on renewal that incorporates historic elements, including preservation of the Nihonbashi area and its
river, the former Mitsui headquarters building, and theold headquarters of the Industry Club of Japan, as wellas the restoration of Tokyo Station itself, along with theoriginal Mitsubishi headquarters. Investment in thepreservation of these historical assets for future generations carries with it many benefits, but while thelong-term social benefits may be great, the short-term
private profit to be made on each of them is small, andthere is always the danger that the importance of suchinvestments will continue to be downplayed. While it
may not be easy to find a way to promote such investments and still reconcile these divergent expectations, it is this kind of long-range vision and commitment to social investment that is needed.
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