The expected construction boom in areas devastated by the March 11 disaster has arrived, but much grumbling is being heard despite the money pouring in from both the public and private sectors.
The expected construction boom in areas devastated by the March 11 disaster has arrived, but much grumbling is being heard despite the money pouring in from both the public and private sectors.
Whispers of a "reconstruction bubble" are spreading in the region. Indeed, construction businesses in disaster-hit prefectures are struggling to keep up with surging demand for work to build new homes, repair damaged ones and remove debris.
But the backlog of orders is piling up, leading to long delays in home-building for disaster victims.
Some say those who can afford to take out new loans are the only victims benefiting from the boom, while many local builders complain that they are being squeezed out by big general contractors from Tokyo and other major cities.
On a weekend in mid-June, a model home park in the town of Rifu, near the Miyagi prefectural capital of Sendai, was packed with would-be homeowners and disaster victims who have lost their homes.
Visitors came from faraway coastal cities ravaged by the earthquake and tsunami, such as Ishinomaki and Higashi-Matsushima, to check out a variety of model houses.
A sales representative of a homebuilder told customers they still face a long wait.
"Even if you sign a contract (to have a home built) now, you will not see construction start until next year," the sales rep said. "By autumn, we are likely to have received enough orders to make our building schedule full throughout next year."
On one recent day, 30 to 40 families came to see the company's model house, according to the official.
Hiroshi Kameyama, a 53-year-old from Higashi-Matsushima, was one of the visitors to the home park.
The first floor of his home was flooded by the tsunami and its foundation was destroyed.
Kameyama said he wants to build a new house at the same site.
"I will put importance on quake-resistance and after-sales service in deciding on the homebuilder, but taking out a new loan at my age will be a big challenge," Kameyama said.
A sales representative of another homebuilder at a home park in Sendai's Miyagino Ward said some companies have temporarily transferred employees from Kansai and other parts of Japan to support their understaffed operations in the Tohoku region.
"A special procurement boom has started in the three Tohoku prefectures that have been hit the hardest," said an employee at a major homebuilder. "We saw no activity in the market in March, but we have been receiving an increasing number of orders for new single family homes since April."
The situation is more or less the same for other companies.
Sekisui House Ltd., a leading homebuilder, has seen the number of orders for new homes in the three disaster-hit prefectures increase by 20 percent from year-earlier levels.
Tohoku Misawa Co. has reported a 2.5-fold year-on-year spike in the number of renovation orders in these prefectures.
Smaller local contractors are struggling to secure carpenters and workers for the land-office business.
"Builders around here are all complaining about shortages of carpenters and workers for wall and roof work," said the supervisor at a construction site in Higashi-Matsushima. "Some of our workers are also working for other original contractors. Let me know if there are workers who are not busy."
The housing department of the Miyagi prefectural government is aware of the situation.
"We hear that individuals have to wait for three to six months now if they try to have local contractors repair roofs or walls," an official said. "Contractors within the prefecture alone cannot meet all the demand."
Some in the industry, however, are less bullish about the construction outlook. An official in charge at the Sendai branch of Daiwa House Industry Co., another major homebuilder, said only people with the wherewithal to rebuild or repair their damaged houses, like those who have cash or land, can currently take action.
Restrictions are imposed on construction in coastal areas that were flattened by the tsunami, and no decision has been made on how land in these areas should be used.
Many disaster victims have loans to pay off or lack the income for reconstruction or renovations of their damaged houses.
"I'm not quite optimistic about whether orders will keep flowing in," said the Daiwa House official.
Local contractors are also busy with contract work to remove coastal municipalities.
Some 23.82 million tons of debris remain on land in the three prefectures of Iwate, Miyagi and Fukushima, according to an estimate by the Environment Ministry.
The city of Ishinomaki contracts out the work of disposing debris mainly to the 120 designated local contractors. At about 150 sites in the city, workers are grappling with heaps of rubble without taking a day off.
"There is nobody who is not busy among contract workers in the coastal areas," said an official at one of the contractors.
The situation is quite different for the construction of temporary housing for disaster victims.
The three prefectures have contracts for disaster relief work with the Japan Prefabricated Construction Suppliers and Manufacturers Association in Tokyo. Under the contracts, leasing companies belonging to the association built prefabricated houses for evacuees immediately after the disaster by using the materials they had.
But then, major homebuilders in Tokyo and Osaka started playing the central role in building temporary homes.
Since these builders mainly use their own affiliates as subcontractors, temporary housing construction sites are dominated by firms from other prefectures.
Almost all of the vehicles parked at a construction site close to the city center of Ishinomaki bore license plates of places outside Miyagi Prefectures, like Tokyo's Shinagawa, Osaka, Sapporo, Kagoshima, Nagasaki and Mie.
According to a 41-year-old worker of a subcontractor who had come to Ishinomaki from the southern city of Miyazaki to do wiring work, workers had been dispatched to the site from Okinawa, Osaka, Hokkaido and other parts of the nation.
"Local contractors alone cannot carry out all these works," the worker said.
In response to requests from many local construction firms, Iwate and Fukushima prefectures decided in April to allocate the contracts for some of the planned temporary houses to local businesses. So far, 21 companies and organizations have won such contracts in Iwate and 12 in Fukushima.
But Miyagi Prefecture has continued giving temporary housing contracts only to members of the association of prefabricated house builders, saying it puts the priority on speed.
The local government's policy has irked the Miyagi General Construction Association, an organization of local builders.
"They say that in the reconstruction after the 1995 Great Hanshin Earthquake, large contractors won most of the building contracts, and as a result many smaller local builders went bust," said an official of the association. "We want the prefecture to pay more serious attention to the interests of local businesses."
An official of the association of local construction workers concurred.
"If major contractors take the leadership, many subcontractors get involved in each contract work and the wages of construction workers are kept down," warned an official at the organization, calling on the prefecture to grant contracts to local firms.
Floods of petitions from local contractors have prompted four municipalities in Miyagi Prefecture to consider contracting out the construction of temporary houses to local companies independently of the prefectural government.
One of them, the town of Yamamoto, has already selected two contractors within the prefecture for the building work.
"This disaster has triggered the kind of special demand surge that happens only once in several decades," said an official at a contractor in Sendai. "We hope they will figure out a way to ensure local businesses will also benefit from the boom."
(This article was written by Ryuichi Yamashita and Nobuyoshi Nakamura.)