Company-provided housing is making a comeback in Japan. As housing costs climb, led by Tokyo, employers are expanding housing benefits to ease the burden on younger staff and to compete for talent.
Leased Company Housing Up 25% in Japan, First Rise in 30 Years
Japanese companies are expanding company housing and dormitory support to attract new graduates and keep employees longer, the Nihon Keizai Shimbun, or Nikkei, reported.
Japan had 1.302 million company housing units in 2023, according to the Ministry of Internal Affairs and Communications' housing and land survey, conducted every five years. It was the first increase in 30 years.
Leased company housing, in which employers rent units on the open market and provide them to staff, also grew. Relocation Japan, a property management company, managed 300,000 such units as of the end of June, up 25% from three years earlier.
More than 70% of new contracts were single-room units for people living alone. Inquiries about introducing company housing have also risen among small and midsize companies with fewer than 500 employees, prompting Relocation Japan to launch a new support service in June.
Breakfast and Dinner Included for 15,000 Yen a Month as Big Firms Add Dorms
Large companies are also building dormitories to lower employees' housing costs. Itochu, a Japanese trading house, resumed operating a dormitory for male employees in 2018 and opened one for women last year.
The dormitory costs about 15,000 yen (about 130,000 won) a month and serves breakfast and dinner at the company cafeteria. As a rule, the company has all new hires live in the dormitory.
Itochu expects the dormitories to do more than cut housing costs. A company official said they would help "break down barriers between departments and generations and build relationships."
Nippon Life Insurance also opened a large dormitory for single employees in 2023. Rent was set at about one-third of the going rate for comparable nearby housing to ease the burden on younger staff.
Tokyo Studio Rents Near 1 Million Won as Housing Support Becomes a Hiring Edge
Behind the return of company housing are steeply rising home prices and rents. Average asking rent for one-person rental apartments of 30 square meters or less in Tokyo's 23 wards was 114,339 yen (about 960,000 won) a month in August, according to At Home, a Japanese property information provider. That was up 10% from a year earlier and a record high.
Average rent stood at 88,440 yen in August 2021, meaning rents have risen about 29% in five years.
As housing costs mount, company dormitories and housing are becoming a tool for recruiting rather than simply a fringe benefit. Yumiko Kawashima, editor-in-chief of the job site Doda Campus, said creating a benefits environment that reduces the burden on young employees matters for securing talent, adding that company dormitories can do more than cash allowances to cut the costs employees actually bear.