Heian kendo 1200 background – economic-dominated construction in kyoto under the real estate bubble

Heian kendo 1200 background – economic-dominated construction in kyoto under the real estate bubble

The 1200 anniversary of Kyoto kendo was conducted in the so-called lost decade of Japan, when the slumping economy had not recovered from the burst bubble in 1991 with the continuous decline of land price and stock price. The anniversary was an significant action of the Kyoto government to stimulate the economic recovery by increasing public investment, which also embodied the reflection about the destructed historical townscape during the real estate bubble. [1] The bubble was largely caused by the currency wars between Japan and Us and the government’s impolitic domestic policies. For Kyoto specially, the bubble in real estate industry stimulated the large-scale construction of manshons in place of the traditional kyo-machiya residential typology (which will be discussed in another post) . Giving way to the economic-dominated construction, the height restriction of new buildings in the preservation area was also loosened, which further aggregated destruction of the traditional townscape of Kyoto.


The real estate bubble derived from the currency war mostly between Japan and US. For a long time, Japanese economy was led by export and capital investment for export needs. Compared to exchange rate of yen, the one of US dollar had been rising sharply because of the high interest rates, which accelerated Japan’s trade surplus with America.[2] Under the pressure of domestic opposition and protectionism in trade, US conducted the Plaza Record and proposed the weak dollar in relation to the Japanese yen by intervening in currency markets. [3]Consequently, Japanese yen suffered a big surge and the export-oriented economy fell into a recession, which was called endaka. Together with the pressure from political jockeying with US, endaka nudged the transformation of economic structure to an domestic-demand-driven economy in Japan, which was embodied in the expansion of domestic demand and proactive fiscal policy (low interest rate), as published in Maekawa Report.

The bubble was directly triggered by the government’s impolitic domestic expansionary policy and the hasty financial liberalization.[4] In response to the Maekawa Report, the government formulated the fourth nationwide comprehensive land development plan (第四次全国総合開発計画) which proposed the Tokyo as an international center.[5] The wave of land development rippled through whole country by the law of comprehensive development of regional resort (総合保養地域整備法). The government also accelerated the financial liberalization, which introduced a huge influx of the floating capital into the real estate industry. Real estate industry was pushed to the peak of a bubble in 1991, when both the individuals and institutional investors irrational irrationally invested in real estate with a price far more than the real value out of speculation

In 1991, Kyoto was one of the six cities who were affected most by the asset bubble, where the price of commercial land increased by 302.9%, residential land by 180.5% and industrial land by 162.0% compared to the ones in 1985. The townscape of the historical was damaged a lot by the largely constructed condominiums with the legislation and policy support from the government, which will be further illustrated in next post.[6]



[1] 蔡林海, & 翟锋. (2007). 前车之鉴 : 日本的经济泡沫与「失去的十年」 = The bubble economy and the lost decade of Japan (Di 1 ban.; 第1版 ed.). 北京市: 经济科学出版社.

[2] 张季风. (2006). 挣脫萧条 : 1990-2006年的日本经济 = Japanese economy, 1990-2006 : Depression and recovery (Di 1 ban.; 第1版. ed.). 北京市: 社会科学文献出版社.

[3] 奥村洋彦. (2000). 日本”泡沫经济”与金融改革 (Di 1 ban.; 第1版 ed., 走进世界金融丛书). 北京: 中国金融出版社.

[4] Maekawa, H. (1986) The Report of the Advisory Group on Economic Structural Adjustment for International Harmony, Submitted to the Prime Minister, Mr. Yasuhiro Nakasone, . Maekawa Report.

[5] 國土厅. 第四次全国総合開発計画. Japan, 1987.


[6] Japan Real Estate Institute (2004) Index of Urban land Price by Use

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