If you are looking at purchasing property in the outskirts of cities, you may come across land that is in an Urbanization Control Area. This land comes with a very different set of building limitations than other classifications. Here’s why you need to pay careful attention to this difference.

Under the City Planning Act, land can be classified as an Urbanization Promotion Area (市街化区域) and an Urbanization Control Area (市街化調整区域). Under this act, an Urbanization Promotion Area is defined as one where urban areas have already formed and those areas where urbanization should be implemented preferentially and in a well-planned manner within approximately the next 10 years. On the flip side, an Urbanization Control Area is an area where urbanization should be controlled. In short, construction is usually not allowed, with only some limited exceptions.

Because construction is not permitted in most cases, land with this classification is typically priced lower and can be more difficult to sell. 

If you want to build in one of these areas, you need to apply for a development permit through the local government authority and pass their requirements. The criteria can vary between cities/towns/villages, so you will need to check with the local government office. Some may only allow shops that provide services for day-to-day life, buildings necessary for the public interest, buildings that are necessary for tourism, or buildings for agricultural purposes. Houses are typically not permitted, but there may be some exceptions for land that has been in the same family for a long time. Again, this requires checking with the city/town/village where the land is located. In Hyogo Prefecture, for example, there have been recent talks of loosening up the restrictions to encourage new homes to be built.

Other exceptions:

  • If there is an existing building on the land that was legally built with a development permit, generally speaking it may be possible to rebuild something of the same size and for the same use. 
  • If the land was originally land for building on, but later classified as an Urbanization Control Area, there may be some occasions where construction is permitted.

These areas are not intended for residential purposes and infrastructure may be lacking. There may be some areas that do not have electricity or town water and no way of connecting to these services. As they are areas where development is not encouraged, the local governments may have little intention of providing infrastructure anytime in the future.