Backyard Coffee and Jazz in Kyoto

And economic viability; can the owner make a living wage with this setup, or do they have other income sources? What is their total cost of living?

Again, goes back to zoning laws.

Housing is the biggest expenditure for people in America and many parts of the world. Housing is cheap is Japan so people can get by on much less.

That comes with zoning regulations. That coffee shop is illegal in most of North America due to being a commercial place-of-sale (outlawed in many residential areas), too small, and not having off-street parking.

When you're able to operate a place like that, your fixed costs (i.e. rent) are drastically lower and you are able to sell at lower prices because of it. With more housing, your employees don't need high wages to afford a basic apartment.

That's interesting. So at least in this sense Japan seems like an excellent place for one to sell their home and downsize.

That is indeed what's happening. The countryside is emptying out and people are moving to the big cities.

If you don't have to worry about work requirements for life's necessities along with zoning laws to support them, the economic viability of operating unique, niche establishments goes up.

That said, there are probably 0 employees and long hours involved.

The one country that seems to do housing right and not consider it an investment vehicle. Unlike our depressing situation that is tearing society apart.

Many small business like this are also run by retirees who want to meet people and bring some value to their community. It's legal to run a small business from a certain percentage of your ground floor in any location in Japan.

It also doesn't have to be your primary source of income. If you can run it from a structure like this you could just operate a cocktail bar on the weekends. Even in the US I know of a small pizza place that offers takeout only on a few days each month and it's operated out of the owners mom's kitchen. Not sure how legal that is and turning that inti a sit-down place would certainly be an issue.

That it's considered an investment vehicle is downstream from the rising markets due to tight regulation which limit supply. In Japan what zones exist is standardized across the country and what zone applies to a given area is defined by the government in Tokyo. This prevents local homeowners to lobby for tighter regulation to strangle supply.

Yes. Also you can look at falling rates of entrepreneurship in the United States and connect the dots with the article. We have some neighbors who wanted to run a flower shop out of their garage. Can't get business insurance because it's not a separate location - i.e. your home and business cannot be the same place for physical goods.

Issues like that, while perhaps sensible to someone, are barriers toward economic prosperity.

But a new oil change location? Approved, insured, permitted in 5 minutes. Construction done in 2 months.

We're really hellbent on making anything but the new highway to the new Wal-Mart and $60 Starbucks dinner (paid over time of course) for the kids on the way to soccer practice in the Jeep Wagoner illegal.

>That it's considered an investment vehicle is downstream from the rising markets

That's not what its downstream from, that's restating the same thing in financial terms. What it's actually downstream from is that Japan is a fully urbanized society. The reason why Americans cannot implement this is because houses are their little homesteads and castles, Fukuyama used the term "suburban villager" for this attitude (also prevalent in Greece and Eastern Europe etc.)

Housing is absolutely an investment vehicle in Japan. It's just that Japan has been economically stagnant for 30+ years, bordering on deflation, and anywhere outside of a first- or second-tier city is effectively dying. Couple that with the Japanese cultural distaste for pre-owned housing, and this is the outcome.

If you operate a rental in any area outside of the core of the major cities, you are in the business of charging a huge monthly premium over a property value that is rapidly depreciating to zero. This is fundamentally different than the US.

And that's just the tip of the iceberg. It would not pass a health inspection because it doesn't have sanitizable surfaces. The restrooms (if any) are likely not accessible, nor is seating nor is the entrance. Would not pass fire code for a commercial establishment. And probably 50 other things.

There are specific zoning allowances and health codes for "home bakeries" and that sort of thing (at least in my area).