Interesting. I can’t speak to how it works in other countries; in the USA so much context is loaded into home ownership. I don’t know the Japanese “sticks and carrots”.

The one factor I could imagine is if cost of land is so expensive that anyone who could afford it is going to be wanting to do a ton of customization anyway.

Are you talking about rural Japan, not just e.g. Tokyo? What systems exist in Japan that make the building worthless?