By Kotaro Yaginuma and Tomoyuki Momii / Yomiuri Shimbun Staff Writers

21:00 JST, December 5, 2025

Soaring construction costs are forcing developers to review their plans for urban development projects, with some slashing building sizes or even starting from scratch before seeking approval to begin breaking ground.

Urban development projects often become cornerstones of an area’s regeneration, making any changes to their plans impact overall community development.

Some observers have pointed out that the conventional redevelopment model, in which developers generate profits through the sale of condos in high-rise buildings, may be reaching its limits.

A major redevelopment project is being planned for an area near JR Hakodate Station in central Hakodate, Hokkaido. The area has been in decline in recent years. As of 2020, before the prefectural government green-lighted the initiative, the project’s plans featured a 25-story condo building, a hotel, an event venue for residents and other facilities on an about 10,000-square-meter site home to a closed department store and other businesses.

Every aspect of the project was expected to be up and running in 2026.

However, over the three years that followed, construction costs soared by about 20%. The construction companies, property owners and others behind the project decided to shrink the hotel from the 24 stories in the original plan to 11 stories, among other changes. The prefectural government approved the new plan in........

© The Japan News