The Root Structure of Failure
Of 7,612 remaining schools, 1,951 are not in use. The Board of Audit's findings on 216 schools, and what this article calls property-first thinking
Japan closed 8,850 schools cumulatively between FY2004 and FY2023. Of the 7,612 whose buildings still stand, 1,951 (25.6%) are not in use, and of those, 1,503 have no decided use. There are also cases where an operator withdrew after a school had been put to use (Toho Village, Patterns 2 and 4).
The Board of Audit examined closed and suspended school facilities built with national subsidies that still had service life left and met seismic standards. Even allowing time to consider their use, it found facilities not being used effectively at 216 schools of 137 establishing bodies in 42 prefectures, with a remaining value of ¥24,924.05 million and a corresponding national-subsidy value of ¥10,474.5 million. Among the causes, it named insufficient understanding and consideration of financial support schemes, including national subsidies, and insufficient arrangements for hearing residents' views, and on 8 September 2010 it requested improvement measures of the Minister of Education.
This article calls it "property-first" thinking when a project starts from "we have a closed school — we must activate it" and skips checking demand, finances and consensus in order. It sets out the failures that follow in seven patterns, alongside examples that can be checked against sources.
Cumulative closures, FY2004–FY2023
8,850 schools
Unused among 7,612 remaining (25.6%)
1,951 schools
What Toho Village paid to renovate the former Koishiwara Elementary School (approx.)
¥400M
The operator filed for bankruptcy in February 2024 (RKB Mainichi Broadcasting)
Facilities with remaining service life unused for 3+ years
216 schools
Corresponding national-subsidy value ¥10,474.5 million (Board of Audit, FY2009 audit report)
Seven Failure Patterns at a Glance
Demand, solicitation, renovation, operations, consensus, asset disposition, and seismic/asbestos
| # | Pattern | Structure | Example that can be checked against a source |
|---|---|---|---|
| 1 | Supply-first launch without demand validation | Starting without checking demand | The most common reason a use is undecided is "no demand from the community" (MEXT survey) |
| 2 | Rigid solicitation design (rent / term) | How rent and term are set | Toho Village "AcquaCreta Koishiwara": the village paid about ¥400M, the operator went bankrupt |
| 3 | Underestimated renovation cost | Work beyond the building itself, and regulatory compliance | Septic tank and fire safety equipment work (Architectural Institute of Japan paper); column and foundation repairs in Nagaoka (casebook) |
| 4 | Collapsed operating revenue model | O&M underfunded, designated-management term lapses | Toho Village (users increased but cash ran short) |
| 5 | Resident consensus postponed | Briefings after the plan is fixed | Uruma City (many proposals abandoned for lack of residents' understanding) |
| 6 | Asset-disposition procedure missed | Article 22 of the Subsidy Act | Reinforced concrete schools still within the restriction period, converted using regional revitalization plans (Architectural Institute of Japan paper) |
| 7 | Seismic / asbestos discovered late | Surveys before renovation work | MEXT notice of 6 September 2024 (asbestos-containing insulation survey results) |
Pattern 1: Supply-First Launch Without Demand Validation
The most common reason a use is undecided is no demand from the community
The project terms and notice periods, in years and months, that follow are guides this article sets, not published standards. They move a great deal with the building, the area and the line of business, so replace them with comparable local results and what operators tell you.
Structure
Moving to renovation or a call for operators without checking demand leaves the municipality with maintenance costs and no tenants or users. Before deciding the use, check through market-sounding (a pre-solicitation dialogue with private operators) whether anyone will take the building.
Examples and supporting evidence
Among the reasons a use has not been decided, asked about school buildings with multiple answers (n=2,177), "no demand from the community" accounts for 903 cases (41.5%) and "building deterioration" for 902 cases (41.4%). The Board of Audit also named insufficient arrangements for hearing residents' views as one cause of facilities not being used effectively (see above).
Prevention
- Conduct market-sounding before commitment, and talk concretely with operators who might take the building about terms before designing the solicitation
- Hear residents' views before deciding the use
Pattern 2: Rigid Solicitation Design (Rent / Term)
How the village paid for renovating the former Koishiwara Elementary School and the operator went bankrupt
Structure
When a municipality leases a closed school to a private operator, how rent and term are set shapes how the project continues.
- High rent can mean few or no applicants
- Low rent leaves maintenance costs with the municipality and makes the project more dependent on the operator's management
- A short term makes it hard for the operator to recover investment in renovation and equipment
Example (confirmed in news reports)
Toho Village, Fukuoka: "AcquaCreta Koishiwara" (former Koishiwara Elementary School)
- The village renovated Koishiwara Elementary School, closed in 2011, into a complex with a hotel, a restaurant and working space, which opened in April 2021 as a symbol of recovery from the Northern Kyushu heavy rain. Toho Village paid about ¥400 million in public money to renovate the building under the Koishiwara Dam water source area development project
- The lease with the operator ran for five years, free of charge for three, with the village due to receive ¥100,000 a month for the two years from April 2024
- On 10 February 2024 the operator, Koishiwara Dot Com, suddenly announced the closure on its website, without consulting or informing Toho Village. Mayor Hideki Sanada said he felt anger that they had not consulted the village in advance. Dozens of restaurant and cleaning staff were handed dismissal notices, and the operator's lawyer told them that January and February wages might not be paid
- According to Tokyo Shoko Research, Koishiwara Dot Com filed for bankruptcy at the Fukuoka District Court on 13 February, with liabilities of about ¥50 million
What the reports show is that the village paid for the renovation, the rent was free for three years, and the village was not told of the closure in advance. The reports do not say what the contract provided on management reporting or notice of withdrawal.
Prevention
- Set a project term long enough to recover investment in renovation and equipment (this article's guide is 10–20 years)
- Decide how much of the maintenance cost rent should cover before setting it
- Include clauses on management reporting, a withdrawal notice period (this article's guide is 6–12 months), and a security deposit in the contract
Pattern 3: Underestimated Renovation Cost
Septic tanks and fire safety equipment, compliance with building and fire codes, and asbestos pre-surveys
Structure
If a project plan estimates only the renovation of the building itself, the following costs are easily missed:
- Site work (parking, access-road improvements)
- Infrastructure updates (water, sewer, septic tanks, gas, communication lines)
- Regulatory compliance for the change of use (building confirmation, installing fire safety equipment)
- Pre-surveys for and removal of asbestos-containing materials
Examples and supporting evidence
A paper examining closed schools converted in depopulated areas found that most had single-treatment septic tanks, so combined-treatment septic tanks had to be installed regardless of who converted the school or for what use. It also found that fire safety equipment standards are relatively lenient for schools but very strict for welfare facilities, and that a large gap between the standards before and after conversion requires more advanced fire safety equipment and greatly affects renovation costs.
In MEXT's casebook, the former Shimada Elementary School in Nagaoka, Niigata needed columns deformed by age repaired, a foundation that had sunk in earthquakes adjusted, and works to bring the building up to the current Building Standards Act and Fire Service Act, which cost a great deal. At the former Hama Junior High School in Uruma, Okinawa, issues under the Inns and Hotels Act had been kept in mind during renovation, but several problems arose at the final inspection and had to be dealt with by installing equipment and the like.
MEXT's notice of 6 September 2024 points out that since 1 April 2022 prime contractors for demolition and renovation work must report the results of pre-surveys for asbestos-containing materials to the prefecture and the labour standards inspection office, and that for work started on or after 1 October 2023 the pre-survey must be carried out by a qualified person, and asks for appropriate action. Allow for the cost and time of this pre-survey when renovating a closed school.
Prevention
- Complete asbestos investigation and seismic diagnosis at municipal cost before solicitation
- Disclose investigation results as part of the solicitation package
- Set "renovation cost cap subsidies" to create an environment in which operators can estimate accurately
Pattern 4: Collapsed Operating Revenue Model
Toho Village, where cash ran short although users were increasing
Structure
Even when renovation and opening succeed, the medium- to long-term revenue model fails to hold and operations stall.
- O&M costs (utilities, repairs, personnel) are not covered by rental income
- The designated-management term lapses without renewal, and the operator withdraws
- Operating personnel such as facility managers and marketing staff cannot be secured
- Initial subsidies and grants end, and the project cannot stand on its own
Example
Toho Village, AcquaCreta Koishiwara (revisited)
According to activity reports the operator submitted to the village, guests rose from about 1,000 in 2021 to about 1,800 in 2023, and restaurant users from about 3,500 to 8,000. But the operator had struggled to win the corporate training and group tours it had hoped for. It was a company in Chikushino City that also ran call-centre operations, and its lawyer explained that it had run short of funds and could not continue the business.
Rising user numbers do not guarantee that income covers fixed costs. At the solicitation stage, check not only visitor numbers but who pays how much.
Prevention
- Ask proposals to include a 10-year cash-flow outlook
- Ask for projected maintenance costs, set against rent and the municipality's contribution
- Make staff recruitment and retention plans a mandatory item in proposals
- Require multiple revenue streams (rent, event revenue, retail and so on)
Pattern 5: Project Collapse from Postponed Resident Consensus
Uruma City, where many proposals were abandoned because of attachment to the school
Structure
If the municipality and the operator settle the reuse plan first and explain it to residents once it is fixed, residents tend to feel they are being asked to rubber-stamp a decision. A school is a place local people are attached to, and reactions can arise to how the site will change before the use itself is even discussed.
The Board of Audit also named insufficient arrangements for hearing residents' views as one cause of facilities not being used effectively (see above). For disability-related facilities, on the other hand, the supplementary resolutions of both Houses on the bill call for thoroughly ensuring that the consent of neighbouring residents is not sought when facilities, including group homes and care homes, are approved.
Example
At the former Hama Junior High School in Uruma, Okinawa, several operators put forward various proposals, but many were abandoned because they did not win the understanding of residents attached to the school. In June 2019 a trial event of about two weeks tested the building as a community hub with co-working space; after repeated briefings for residents, in August 2021 a joint venture including the Hama neighbourhood association formed a consortium to manage and run it.
Resident opposition can also halt plans at the school consolidation stage. In the former Hakkai Village area of Aisai City, Aichi, residents opposed the city's plan to merge four elementary and two junior high schools into a single integrated school, because the former village would be left without even one elementary school, and kept up a sustained campaign; in 2020, with COVID-19, the city's plan came to a halt. This concerns a consolidation plan, not the reuse of a closed school, and describes the situation as of the February 2022 issue in which the article appeared.
Prevention
- Design a use-deliberation process with resident participation from the moment of "closure confirmation", and bring residents in before deciding
- Discuss with residents whether to include places that keep the memory of the school (a memorial room, days open to the community) in the reuse plan
- Before the call for operators, the municipality explains its policy and listens to residents; once the operator is chosen, the operator explains what it will do
For details, see Abandoned School Welfare Facility Conversion and Community Meetings.
Pattern 6: National-Subsidy Recovery Risk from Missed Asset-Disposition Procedures
Article 22 of the Subsidy Act, and when a report is enough
Structure
When a school facility built with public school facility improvement subsidies is used for a non-educational purpose within the disposition restriction period, the local government that manages it must, under the Act on Regulation of Execution of Budget Pertaining to Subsidies, obtain the approval of the Minister of Education and pay the equivalent of the national subsidy to the national treasury (the asset-disposition procedure). Article 22 of that Act provides that recipients must not, without the approval of the head of the ministry, use property acquired or improved with a subsidy for purposes contrary to the subsidy, or transfer, exchange, lend or pledge it.
Under MEXT's notice, disposing of buildings free of charge 10 years or more after the subsidized project was completed is deemed approved once a report is submitted to the Minister, and no payment to the treasury is required. Even for disposal for a fee 10 years or more after completion, no payment is required where an amount at least equal to the subsidy repayment is set aside in a fund for school facilities. Disposals under a certified regional revitalization plan are deemed approved. Temporary conversion or lending of closed school facilities for a public-interest use without altering them is not a disposal and needs no procedure.
Example
The paper on conversions in depopulated areas found that the wooden school cases did not face subsidy repayment because their restriction periods were short, but most reinforced concrete school cases had not passed the 60-year restriction period, and where the converting body or the use did not meet the conditions, municipalities used regional revitalization plans and other means to get past the repayment problem. The paper also notes that the asset-disposition procedure has since been greatly simplified.
Prevention
- As soon as closure is confirmed, use the notice and the Asset Disposition Procedure Handbook on MEXT's asset-disposition page to determine the restriction period and whether repayment is required
- Where buildings are disposed of free of charge 10 years or more after project completion, a report is enough
- Record "subsidized project completion year, disposition restriction expiry year, and procedure requirements" in the closed-school management registry so handover is preserved across staff changes
Pattern 7: Seismic and Asbestos Issues Discovered Late
The notice on asbestos survey results, and equipment that may contain PCBs
Structure
The pattern where, after planning, solicitation, and operator selection are complete, the following surface and collapse the project:
- Seismic deficiency found late. A school built to the old seismic standard has not been retrofitted, retrofit costs exceed what the operator expected, and the project stops adding up.
- Asbestos-containing materials found late. Sprayed asbestos or asbestos-containing materials turn up after renovation work begins, adding the cost and time of removal.
- Electrical equipment that may contain PCBs. Some transformers and capacitors made in Japan from 1953 to 1972 used PCBs in their insulating oil, and electrical equipment made by Japanese manufacturers up to around 1990 may be contaminated with PCBs. For buildings built or renovated up to March 1977, the ministry asks owners to check whether old lighting ballasts containing PCBs are still in use. PCB waste is disposed of under the Act on Special Measures concerning Promotion of Proper Treatment of PCB Wastes.
Examples and supporting evidence
MEXT's notice of 6 September 2024 reports the results of a survey of asbestos-containing insulation and similar materials in school facilities as of 1 October 2023, asks institutions that have not completed the survey to do so soon, and asks those holding deteriorated or damaged insulation to take emergency measures immediately and remove or enclose it promptly. When reusing a closed school, check for the same materials before calling for operators.
Prevention
- Complete asbestos investigation, seismic diagnosis, and checks of equipment that may contain PCBs at municipal cost before solicitation, and disclose the results before opening solicitation
- Having the municipality present estimated renovation cost ranges lets operators build realistic funding plans
- Put survey results into the solicitation documents, since problems found later upset operators' funding plans
Self-Diagnostic Checklist (21 items, 3 per pattern)
21 items to verify before solicitation
If even one item answers "No," the corresponding failure pattern remains a live risk. Closing the gap before solicitation begins is recommended.
Conclusion
Many of the seven patterns in this article come from skipping checks that could be made before solicitation: market-sounding, hearing residents' views, asbestos surveys, seismic diagnosis, and confirming the asset-disposition procedure. The causes the Board of Audit named for its 216 schools also include consideration of financial support schemes and hearing residents' views.
In Toho Village, the village paid about ¥400 million for the renovation of AcquaCreta Koishiwara, and guest and restaurant numbers were rising, yet the operator ran short of funds and filed for bankruptcy. Check rent and term, management reporting, and the relationship between user numbers and income at the solicitation stage.
Before soliciting, go through the 21 items and fill in every "No" before moving on. Use the checklist alongside the national documents covered in How to Reuse a Closed School.
For individual cases, see 47 Former School Reuse Cases. For Park-PFI's failure patterns and how they overlap, see 5 Patterns of Park-PFI Project Failure.
What to do next
When developing a school reuse plan and renovation budget, check the following matters.
| # | What to check or consider | Responsible team or contact |
|---|---|---|
| 1 | Find operators interested in using the building. Ask about their intended uses and requirements, and use the responses to develop the reuse plan | Market sounding and local operators |
| 2 | Check the seismic assessment and asbestos survey results. If surveys have not been conducted, determine their scope and how to commission them | Facilities team |
| 3 | Estimate renovation costs from the survey results and compare them with demolition costs | Design office |
| 4 | Check the property disposal procedures. For subsidized school buildings, check MEXT approval or reporting requirements against the intended use and disposal restriction period | Board of education and MEXT |
| 5 | Explain the proposed reuse to alumni and community groups and hear their views before announcing the use | Alumni and neighbourhood associations |
Check operator interest and requirements before finalizing the use, and take prospective demand into account when developing the reuse plan.
References
FY2024 Survey on the Utilization of Closed School Facilities (as of 1 May 2024) — Ministry of Education, Culture, Sports, Science and Technology (2025)
Request for improvement measures concerning the effective use of school buildings of closed or suspended public elementary and junior high schools (FY2009 Audit Report) — Board of Audit of Japan (2010)
Overview of the Asset-Disposition Procedure for Public School Facility Improvement Subsidies — Ministry of Education, Culture, Sports, Science and Technology (2026)
Notice on Approval of Asset Disposition for Public School Facility Improvement Subsidies (No. 1190, 31 March 2026) — Ministry of Education, Culture, Sports, Science and Technology (2026)
Act on Regulation of Execution of Budget Pertaining to Subsidies (Act No. 179 of 1955) — e-Gov Legal Database (e-Gov)
Notice on the Results of the Survey of Asbestos-Containing Insulation and Similar Materials in School Facilities (6 September 2024) — Ministry of Education, Culture, Sports, Science and Technology (2024)
How to Determine Whether Equipment Contains PCBs (PCB Early Disposal Information Site) — Ministry of the Environment (2026)
Casebook on Repurposing Closed Schools (Minna no Haiko Project) — Ministry of Education, Culture, Sports, Science and Technology (2023)
The Influence of Building Codes on the Conversion of Closed Elementary and Junior High Schools: Cases in Depopulated Areas (AIJ Journal of Technology and Design, Vol. 17, No. 36) — Kenji Suzuki (2011)
Report of 12 February 2024 on the sudden closure of the Toho Village facility (in Japanese) — RKB Mainichi Broadcasting (2024)
Report of 13 February 2024 on the village's reaction to the closure (in Japanese) — RKB Mainichi Broadcasting (2024)
Report of 14 February 2024 on the operator's bankruptcy filing (in Japanese) — RKB Mainichi Broadcasting (2024)
A New Phase of School Consolidation and Its Disregard for Educational Theory (Jumin to Jichi, February 2022, in Japanese) — Yumi Yamamoto (Local Government Research Institute) (2022)
Supplementary Resolutions of the House of Representatives and House of Councillors Cabinet Committees on the Bill for the Act for Eliminating Discrimination against Persons with Disabilities — Cabinet Office (2026)
