Posts Tagged ‘rent subsidies’

Government housing allowance ignores market realities

Monday, February 22nd, 2010

The is the kind of rental the government probably has in mind

The is the kind of rental the government probably has in mind

One of the economic countermeasures adopted by the previous administration of Taro Aso that has been retained by the Democratic Party of Japan was the allowance for people who had lost their housing as a direct result of having lost their jobs. In most cases, the reason they lost their housing was because the place they were living in was either owned or subsidized by their employers. The DPJ plan originally earmarked ¥70 billion for this allowance, and an additional ¥30 billion has been set aside for it in the supplemental budget.

Local governments started accepting applications for the allowance last October. Rent subsidies last for six to nine months and the amount of the allowance depends on the location and other factors. For Tokyo residents, it comes to ¥69,000 a month for a “family” and ¥53,700 a month for a single person. The allowances would be handled by the welfare ministry in collaboration with local governments.

The ¥70 billion that has been set aside was calculated to cover 320,000 people. However, during the first three months that applications were accepted only 11,518 people applied and about 7,900 of them have so far qualified for the allowance. Local governments blame poor communications for the low demand, but there’s another, more significant reason why people aren’t flooding welfare offices to apply: They know it won’t mean anything.

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