In FY 2014, financial support (mezzanine support services Note) that is extended by MINTO (Organization for Promoting Urban Development) to private projects that develop functionalities for augmenting the international centripetal force of foreign language-ready medical care facilities and the like was enhanced to support the formation of global business and living environments. At the same time, Project Supporting the Improvement of International Business Environments, etc. and City Sales was inaugurated to provide comprehensive support, in terms of both non-structural and structural measures, to the betterment to urban facilities that make for better international business environments, etc. and to city sales.

As of the end of March 2016, a total of 63 Urban Reconstruction Emergency Development Areas were registered in government-ordinance-designated cities and prefectural capitals, including Tokyo and Osaka, hosting a variety of urban development projects by private sectors in steady progress. Mezzanine support services supporting the procurement of middle-risk funds are carried out by MINTO.

The bill to amend the Act on Special Measures Concerning Urban Renaissance etc. submitted to the Diet in February 2016 includes such measures as extending the application deadline for minister approval of private urban reconstruction projects, providing financial support on international conference and other venues that contribute to enhanced international competitiveness, establishing a system for the arrangement of continued supply of energy to buildings and hospitals within the areas not only during peace times but also times of disasters, and expanding the deregulation measure of allowing construction of buildings above roads or underground to cover all Urban Reconstruction Emergency Development Areas.

(2) Status of application of the measures to support urban reconstruction projects

(i) Zoning for Special Urban Reconstruction Districts

A Special Urban Reconstruction District is a new concept of urban district, with greater latitude of zoning, which is exempt from existing zoning restrictions. A total of 79 Special Urban Reconstruction Districts were zoned as of the end of March 2016, 56 of which had been proposed by private entrepreneurs, etc.

## (ii) Accreditation of private urban reconstruction project plan

Private urban reconstruction project plans accredited by the Minister of Land, Infrastructure, Transport and Tourism (91 plans as of the end of March 2016) are financially supported by the Organization for Promoting Urban Development or granted tax incentives.

## (3) Promoting the formation of larger blocks

Since many of the central areas of Japan’s major cities have been organized into blocks through the implementation of postwar reconstruction land adjustment projects, etc., the scales of these blocks, with the structure of the local streets, are not fully responsive to the prevailing needs, etc. for land usage, transport infrastructures, and disaster preparedness. To reinforce the international competitiveness of the big cities, revitalize local cities, and seek advanced and effective land usage to fill present-day needs, the MLIT promotes the aggregation of land that has been segmented into multiple blocks, the consolidated usage of sites and restructuring of public facilities.

## 2 Approaching National Strategic Special Districts

In addition to the special exemptions from the Building Standards Act, the Road Act, the City Planning Act and the like introduced as regulatory reforms in the Act on National Strategic Special Zones passed in December 2013, the amendment to the Act on National Strategic Special Zones passed in July 2015 included special exemptions concerning establishment of nursery schools in city parks. Utilizing these special exemptions, specific projects are being implemented in Tokyo Area, Kansai Area, Fukuoka city, and Okinawa, visibly driving forward reforms of regulations that had been difficult to change due to stiff oppositions.

Note A mezzanine support service is defined as among all services that involve the development of public facilities with environmentally friendly architectural structures and sites, those that are accredited by the Minister of Land, Infrastructure, Transport and Tourism and that are entitled to the procurement of a middle-risk fund (such as a loan granted with an option to leave principal and interest subordinated) by MINTO are defined as “mezzanine support services.”