Depopulation threatens the very existence of hundreds of outlying municipalities in Japan , according to an alarming report published in 2014 . The Abe cabinet has responded with a new policy initiative addressing this concern , but Katsuyuki Yakushiji warns that the government must to do more than create a new budget category if it hopes to solve a crisis that has been in the making for many decades .

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Foreign visitors to Japan are often astonished by Tokyo’s economic vitality. This past February, for example, Ginza and Akihabara were swarming with shoppers as Chinese and Taiwanese tourists rushed to stock up on electronics and other Japanese goods during their traditional New Year’s holiday. (Japanese rice cookers are such a popular item that some visitors have been known to buy a dozen or more on a single trip.) This winter some 250,000 tourists flocked to Tokyo in the space of one week, spending about 110 billion yen.

Foreign visitors who limit their travel to central Tokyo are likely to go home thoroughly convinced that “Japan is back,” as touted by Prime Minister Shinzo Abe. But Tokyo is not Japan. After an hour’s drive from the city, the hustle and bustle of central Tokyo give way to a world that moves much slower. Traffic is sparse; pedestrians few and far between. The stores clustered around suburban train stations are almost devoid of customers, and many are permanently shuttered. (In fact, in many regional municipalities, the main shopping drag is ironically referred to as “Shutter Street.”)

Farther out in the countryside, the population consists almost entirely of elderly residents. Japan’s rural exodus has reached the point where good, tillable land is being overrun with weeds and brush for lack of anyone to farm it. By area, about 10% of Japanese farmland is currently lying abandoned, and that figure is sure to rise further. The decline of regional Japan is one of the most serious issues facing the nation today.

Sounding the Alarm

The plight of Japan’s regions was the subject of a publication that created a stir when it hit the bookstands in May 2014. Chiho shometsu (Demise of the Regions), a report issued by the think tank Japan Policy Council, provides an analysis of the demographic changes that are decimating Japan’s regional communities, along with some recommendations for reversing the trend.

Chiho shometsu explains the problem in stark numerical terms, beginning with a summary of national demographic trends. As the authors note, Japan’s population has been declining since 2008, when it peaked at about 120 million. According to the latest projections, it will fall to about 97 million by 2050 and dwindle to just 50 million—less than half the current population—by 2100. The most fundamental cause is a sharp decline in the total fertility rate—that is, the number of children a woman is expected to give birth to in her lifetime. Japan’s total fertility rate sank as low as 1.26 in 2005, and while it has risen slightly since then, it remains well below the replacement level.

Growing longevity, while contributing to Japan’s rapid demographic aging, has thus far mitigated the impact of low fertility on total population size. But as age takes its inevitable toll on Japan’s baby boomers, the rate of depopulation will increase dramatically.

Against this background, the ongoing migration from Japan’s rural and regional communities to the greater Tokyo area continues apace. By 2040, we are told, about half of the nation’s 1,800 municipalities will experience a drop of 50% or more in the number of female residents of child-bearing age (20—39), assuming current trends continue. The JPC calls these 896 communities shometsu kanosei toshi , “cities that could face extinction.” Of these, 623 municipalities—29% of the total—will also find themselves with fewer than 10,000 residents. The report warns that such communities are at high risk of becoming ghost towns. The authors stress that residents are often unaware of the danger until depopulation passes a tipping point, and the community’s decline accelerates. By then, of course, it is too late.

In short, the report sounds a demographic alarm, warning that the combined effect of the natural decrease stemming from low fertility and the impact of migration—particularly the loss of women of childbearing age—will cause depopulation to accelerate exponentially in many regional communities. Eventually the number of births will dwindle to almost nothing, and only elderly residents will remain. At that point, the fate of the community will be sealed.

Small wonder that Chiho no shometsu sent shockwaves through the nation.

Mobilizing Government Finances

Just weeks after the report’s publication, Prime Minister Abe announced a new regional revitalization campaign and set in motion his by-now familiar process for implementing major policy initiatives. In September, when he reshuffled his cabinet, he persuaded Liberal Democratic Party Secretary General Shigeru Ishiba to accept the newly created post of minister for regional revitalization. Under the auspices of the Cabinet Secretariat’s new “headquarters for population, community, and job creation,” the prime minister assembled a group of experts to formulate strategies for reversing depopulation and reviving local economies. Meanwhile, the Diet deliberated and passed two bills setting goals and establishing administrative processes for the formulation and implementation of revitalization plans. In addition, the prime minister instructed all relevant ministries to draw up plans and budget requests for fiscal 2015 programs relating to local revitalization. In December, the government presented its fiscal 2015 budget, including 1.4 trillion yen in spending on “regional revitalization.”

Ishiba and other officials have been anxious to assure a skeptical public that the government is not using the budget for pork-barrel projects targeted to key Liberal Democratic Party constituencies—a practice for which the LDP has gained notoriety over the years. They have also emphasized a commitment to maximizing the cost-effectiveness of the initiative by promoting cooperation and coordination between agencies, something that has been notably lacking in the past.

But budget watchers have pointed out that many of the projects touted under the new initiative are existing programs that have merely been reclassified and placed under the “regional revitalization” heading. Of course, it would be premature to judge the efficacy of the new policy at this stage. Still, the nation’s demographic crisis, the progressive concentration of population around the Tokyo metropolitan area, and the resulting decline of the regions are the outcome of long-term trends originating in the rapid economic growth era following World War II. They are not likely to be reversed by the budget initiatives of a single cabinet.

Vacant Homes, Abandoned Fields

A more immediate problem facing regional and rural communities is the alarming proliferation of vacant homes and abandoned fields.

To be sure, vacant and abandoned homes have begun to raise safety and law-enforcement issues even in certain neighborhoods around Tokyo and other major metropolitan districts. But in the outlying areas, the problem is much more daunting. When homeowners in these areas die, there is no one to move in because the children and grandchildren have migrated to the city. In many cases, no one even bothers to claim the inheritance because the property has no market value. In those cases, the house lies vacant and soon becomes dilapidated. Yet cost issues and concerns about property rights often prevent local authorities from stepping in. In the more remote and mountainous areas of Japan, entire hamlets have been abandoned, giving rise to “ghost villages.”

A survey by the Ministry of Internal Affairs and Communications counted 8.2 million vacant homes nationwide as of the end of October 2013—a full 13.5% of all housing units. Needless to say, the ratio climbs as one moves out from the major metropolitan areas. Local governments must find a way of dealing with these abandoned homes and deserted hamlets even while coping with the loss of property tax revenue. They are rapidly finding themselves overwhelmed.

More and more farmland and forestland is also going unclaimed as the owners die. In many areas, these tracts have almost no commercial value. Just transferring the deed costs hundreds of thousands of yen (several thousand dollars), and the new owners then find themselves with a piece of unsalable property on which they must pay annual real estate taxes (however low). Since there is nothing to be gained by claiming the inheritance, many people decline to do so. A Tokyo Foundation research project estimated that within the next 30 years, the total area of unclaimed land could rise to 310,000 hectares—an astonishing 8.2% of the nation’s land area.

This situation has created unexpected headaches for local administrators. After the March 2011 earthquake and tsunami, the town of Otsuchi in Iwate Prefecture wanted to relocate residents living near the coastline to higher ground. But when the authorities tried to acquire the land they needed, they repeatedly found that the owners had died, and the heirs had never claimed the property. In some cases the land had been abandoned for generations, and authorities were faced with the nearly impossible task of tracking down and securing approval from each of the enormous number of eligible heirs. Their hands were tied.

This has become a chronic problem for local governments undertaking public works projects, and it could jeopardize the successful implementation of the government’s revitalization initiative. Addressing the crisis will require major policy changes, including a basic shift in thinking on property and inheritance rights. As yet, no one has even begun to take on this pressing issue.