As housing prices continue to rise in Japan, an increasing number of companies are expanding employee dormitories as part of their corporate welfare programs, the Nikkei reported on October 20.

The Nihon Keizai Shimbun reported that companies are expanding housing-related welfare benefits to help recruit and retain young talent, noting that employee dormitories, which had been on the decline for some time, have returned to an upward trend.

According to the Housing and Land Survey conducted every five years by the Ministry of Internal Affairs and Communications, the number of company-provided housing units stood at 1.302 million in 2023, turning upward for the first time in 30 years.

The number of leased company housing units managed by the property management firm Relocation Japan reached 300,000 as of the end of June, a 25 percent increase from three years ago.

More than 70 percent of new contracts are for single-person units with one room.

As inquiries for contracts have surged, particularly among companies with fewer than 500 employees, the company launched a service in June to support small and medium-sized enterprises in introducing company housing.

Itochu Corporation, which had suspended operating employee dormitories for a period, revived a men's dormitory in 2018 and established a new women's dormitory last year.

The company requires all new employees to move into the dormitories as a general rule.

A company official explained, "It will help build interpersonal relationships across departments and generations."

The insurance company Nippon Life Insurance opened a large single-person dormitory in 2023.

It is characterized by affordable monthly rent, which is about one-third the level of comparable properties in the surrounding area.

Behind the resurgence of once-declining employee dormitories is the soaring cost of apartment rents, centered around Tokyo.

According to the real estate company At Home, the average price of apartments under 30 square meters in Tokyo's 23 central wards hit a record high last August.

Yumiko Kawashima, editor-in-chief of the job-hunting site Todacollege, explained, "Creating a welfare environment that reduces the burden on young employees is crucial for securing talent," adding, "Employee dormitories can lead to a more substantial reduction in employees' actual burdens compared to cash allowances."

(File Photo: Yonhap News)