RE-HAK: A Novel Refurbish-to-Host Solution Using AI-Driven Blockchain to Advance Circular Economy and Revitalize Japan’s Akiyas

Abstract

In recent decades, Japan has faced rural depopulation due to urban migration, resulting in widespread property abandonment, the “Akiyas”. This paper presents RE-HAK (Refurbish to Host in Akiyas), a blockchain-based framework promoting a circular economy (CE). RE-HAK enables occupants to live rent-free in Akiyas by completing AI-managed refurbishment milestones via smart contracts. Each milestone—waste removal, structural repairs, or energy upgrades—is verified and recorded on the blockchain. Benefits include: (1) rural economic revival through restoration incentives; (2) sustainable CE adoption; (3) preserving property values by halting deterioration; (4) safeguarding cultural heritage via traditional architecture restoration; and (5) transparent management through automated contracts, minimizing disputes. Findings from three case studies demonstrate RE-HAK’s adaptability across skill levels and project scales, though limitations such as rural digital literacy gaps and reliance on government support for scalability are noted. The framework advances Japan’s revitalization goals while offering a replicable model for nations facing depopulation and property abandonment, contingent on addressing technological and policy barriers.

1. Introduction

1.1. Background

Japan faces a dual-edged challenge in the 21st century: while rapid rural depopulation undermines community vitality and cultural heritage, it also results in a surplus of abandoned “Akiyas” (空き家) that may be transformed into opportunities for sustainable redevelopment. Primary drivers include urban migration motivated by superior employment prospects and infrastructure accessibility. Additionally, the high costs associated with maintaining older homes, including property taxes and renovation expenses, deter many from keeping these properties, e.g., the complex inheritance tax system, as inheritors may find it financially burdensome to keep family homes (in some cases the inheritance tax is up to 55%) [1,2,3,4,5].

In terms of numbers, Japan has over 8.5 million Akiyas (14% of all houses), with a real number potentially exceeding 11 million. Over 4.4 million are for rent, mostly outside major population centers, the status of 3.8 million is unknown, and 330,000 are for sale [6].

The proliferation of Akiyas has specific negative impacts, particularly in areas with shrinking elderly populations; Japan, leading globally in population aging with 28.9% of its population aged 65 and over in 2021—a figure projected to rise to 38.4% by 2065—faces significant challenges in its rural regions, reducing economic activity, particularly in agriculture, leading to housing market stagnation. This self-reinforcing cycle of disinvestment systematically undermines both private sector participation and public sector revitalization initiatives. Furthermore, the Akiya crisis threatens Japan’s cultural heritage and local identity, hindering the preservation of significant structures (at the same time, posing safety hazards), which are essential for cultural understanding and the tourism sector [7,8,9,10].

Despite decades of policy efforts, Japan’s Akiya crisis persists. Existing solutions—such as Akiya Banks and relocation subsidies—have failed to scale due to three systemic gaps:

• Opacity in Property Transactions: Municipal databases often lack real-time updates, discouraging investment [11].
• Incentive Misalignment: Subsidies (e.g., ¥600,000 for urban-to-rural migration [12]) are one-time and lack long-term engagement mechanisms.
• Fragmented Accountability: Renovation projects suffer from disputes over milestone completion and quality [13].

These shortcomings reveal a critical need for systems that automate trust, align stakeholder incentives, and enforce circular economy (CE) principles—precisely where RE-HAK’s AI-blockchain integration intervenes.

The motivation for this work arises from (1) a gap in the literature that fails to address the issue, and (2) the identification of a fast-growing trend of foreigners refurbishing Akiyas, showcasing their projects, particularly with the restoration of traditional “kominkan” houses. Extensive amateur documentation of these renovations exists on digital platforms, increasing global interest in Akiyas, yet academic studies have not kept pace with this phenomenon, leaving unexplored the socio-economic, environmental, and cultural impacts of rural revitalization in Japan.

This paper introduces the RE-HAK framework—a first-ever, AI-driven blockchain-based solution designed to repurpose Japan’s abandoned Akiyas into sustainable living spaces. By integrating circular economy (CE) principles with cutting-edge technology, RE-HAK not only addresses the critical challenges posed by rural depopulation but also paves the way for cultural preservation and economic revitalization. This approach fills a significant research gap by transforming an endemic crisis into an opportunity for sustainable community renewal.

1.2. RE-HAK’s Novelty

RE-HAK (Refurbish to Host in Akiyas) is the first framework to combine CE principles with AI-driven blockchain smart contracts, addressing policy failures through:

• Dynamic Incentives: Rent-free occupancy tied to verifiable refurbishment milestones resolves participation barriers.
• Transparent Governance: Immutable records of progress (e.g., waste recycled, energy upgrades) mitigate disputes [14].
• Scalability: Modular design accommodates diverse skill levels, from basic maintenance (Case Study 1) to expert-led heritage restoration (Case Study 3).

This transition from problem to solution is grounded in emergent trends: Foreigners restoring kominkan homes and municipalities piloting CE initiatives [15] demonstrate demand, while blockchain’s success in construction audits [16] validates its applicability. By formalizing these grassroots efforts into a scalable system, RE-HAK bridges the gap between Japan’s policy ambitions and on-the-ground realities.

1.3. Insufficient Measures by the Japanese Government

The Japanese government has recognized the pressing nature of the Akiya problem and its significant implications for national development. In response, a series of initiatives have been introduced to invigorate rural areas and counter the trend of depopulation. Additionally, financial incentives have been put in place, such as subsidies for renovating empty homes or for relocating to rural regions; A particularly striking initiative proposed in 2024 offers women who move out of Tokyo to marry and work in designated rural areas a one-time payment of ¥600,000 (approximately $4000); These efforts not only aim to address rural depopulation but also seek to combat Japan’s declining birth rate [12].

1.4. The Connection of Akiyas with Sustainable Lifestyles

Currently, in Japan, there is a growing recognition of the need to transition toward more sustainable economic models and lifestyles, particularly through the adoption of circular economy (CE) principles, which emphasize the elimination of waste and the efficient use of resources, has emerged as a promising framework for sustainable development [15,17,18]. In the context of rural revitalization, refurbishing Akiyas aligns with the CE’s focus on extending the life cycle of existing resources, reducing the need to consume new materials [19]. Moreover, CE initiatives can stimulate local economic development by creating new job opportunities in refurbishment, thus contributing to the revitalization of rural economies [20]. Additionally, by promoting resource efficiency and reducing consumption, CE practices (e.g., reusing Akiyas) can help mitigate the environmental impact associated with rural development [21,22]. Furthermore, the emphasis on local resources and closed-loop systems inherent in circular economies can enhance the self-sufficiency and resilience of rural communities, making them more adaptable to future challenges [23].

1.5. The Need for Innovative and Sustainable Solutions: RE-HAK

While existing government initiatives made some progress in addressing the Akiya issue, there remains a need for more innovative, scalable solutions to effectively bridge the gap between vacant properties, sustainable lifestyles, and economic revitalization, considering that refurbishing buildings is a valid end-of-life strategy linked to a CE [24].

The RE-HAK (Refurbish to Host in Akiyas) framework describes (not technically) an innovative technology using AI-driven blockchain-based smart contracts to facilitate the refurbishment and adaptive reuse of Akiyas. This system not only enhances the transparency and efficiency of the refurbishment process but also promotes sustainable living practices that align with CE principles. By setting clear, objective targets for renovations, smart contracts guarantee rent-free occupancy for participants fulfilling refurbishment milestones, contingent upon their fulfillment of predetermined goals. The progress of these refurbishments is meticulously tracked and recorded on smart contracts, providing an immutable and transparent record that fosters accountability and minimizes potential disputes. This transparent and efficient system is poised to stimulate greater interest in rural revitalization, extending the usable life of Akiyas and reinforcing sustainable development practices. Furthermore, RE-HAK empowers local municipalities, actively involving them in the process (even with subsidies), thereby fostering a sense of ownership and engagement in preserving cultural heritage [25,26]. Moreover, legitimizing technologies for a CE should be a must for policy-makers [27].

1.6. Expected Contribution

The aim of this article is to address the critical gap in sustainable solutions for Japan’s Akiya crisis by proposing RE-HAK, an AI-driven blockchain framework that integrates circular economy (CE) principles into rural revitalization. While existing studies highlight the socio-economic and environmental challenges posed by vacant properties, few explore scalable, technology-enabled models to transform Akiyas into assets. RE-HAK uniquely bridges this gap by leveraging smart contracts to incentivize refurbishment through rent-free occupancy, ensuring transparency, cultural preservation, and economic revival. This research not only advances academic discourse on CE applications in depopulating regions but also provides a replicable model for global contexts facing similar property abandonment issues.

This work is organized into (1) Introduction (Section 1), (2) Literature Review (Section 2), (3) Methodology (Section 3), (4) Design of RE-HAK (Section 4), (5) Results (Section 5), (6) Discussion (Section 6), and (7) Conclusions (Section 7).

2. Literature Review

This systematic literature review underscores the significant potential of combining refurbishment practices with CE principles and smart contracts automated with AI technology. The environmental, economic, and social benefits of renovating Akiyas with the proposed “refurbish-to-host” are substantial, aligning well with the holistic approach to environmental science. One notable strategy is the establishment of the “Akiya Bank” system, where numerous municipalities have created online databases that list vacant properties available for sale or rent, effectively connecting property owners with potential buyers or tenants [11].

2.1. Refurbishing in the Circular Economy

Recent research has assessed the challenges and opportunities of implementing CE frameworks across emerging economies—including Cambodia [28] and Vietnam [29]—providing valuable insights applicable to the Akiya context, particularly for migrants seeking to live in Japan and leverage their craftsmanship skills.

The CE paradigm has gained significant traction in recent years as a sustainable alternative to the traditional linear economic model. In the context of the built environment, refurbishment plays a crucial role in the CE [30,31]. Building refurbishment prolongs structural viability, obviating new construction demands and the associated resource consumption [32,33]. Ghisellini et al. (2018) found [34] that refurbishment reduces the environmental impact of buildings by up to 60% compared to new construction. Refurbishment contributes to green buildings [35] with waste reduction in CE with LCA [36,37]. Akanbi et al. (2018) demonstrated [38] that refurbishment projects generate significantly less waste than demolition [39] and new construction, with a potential waste reduction of up to 80%, and energy efficiency [40].

The economic benefits of refurbishment in a CE context are also substantial [41]. Hopkinson et al. (2019) found [42] that refurbishment can be 50–80% less expensive than new construction while providing comparable functionality. This cost-effectiveness makes refurbishment an attractive option for property owners and investors, potentially stimulating economic activity in areas with aging building stock, such as the Akiyas, thus promoting the emerging “circular construction” approach [43,44].

2.2. Smart Contracts Automated by AI and Refurbishment in Circular Economy

The integration of smart contracts and blockchain with refurbishment processes offers innovative possibilities for enhancing CE principles in the built environment [45]. Smart contracts, self-executing contracts with terms directly written into code, can automate and streamline various aspects of the refurbishment process [46]. On the other hand, Turk and Klinc (2017) proposed [13] that smart contracts could be used to automate payments in construction projects, including refurbishments, based on predefined milestones. This approach can increase transparency and reduce disputes, aligning with CE for collaboration and trust. Moreover, the AI can provide automated follow-up and validation to smart contracts, making the solution more efficient and operative [47].

Li et al. (2019) demonstrated [16] how blockchain-based smart contracts could be used to create a decentralized platform for tracking and verifying the use of recycled materials in refurbishment projects. This application enhances the traceability of materials, a crucial aspect of CE, and can help ensure the quality and sustainability of refurbished buildings. Furthermore, Kibert (2016) suggested [48] that smart contracts could facilitate the implementation of performance-based contracting in building refurbishment. This approach incentivizes contractors to optimize the long-term performance of refurbished buildings, aligning with CE principles of durability and efficiency.

2.3. Expected Impacts

The environmental benefits of combining refurbishment, CE principles, and smart contract technology are significant. Ness and Xing (2017) found [49] that refurbishment, when guided by CE principles, can reduce the carbon footprint of buildings by up to 40% compared to conventional renovation practices. Moreover, according to Alonso and Pozas (2024) in their CE review of European rural municipalities, the environmental implications are also directly linked to well-established agendas and programs developed by the countries and regions [50].

Pomponi and Moncaster (2016) demonstrated [31] that the embodied carbon in refurbished buildings can be up to 50% lower than in new constructions. This reduction is particularly important given that the built environment [51] accounts for approximately 40% of global carbon emissions [52], and synergies with CE can enhance the reduction of emissions [53,54]. In that sense, the CE practices of reusing and refurbishing Japan’s Akiyas for sustainable living work as a catalyst to tackle the issue [55].

The social and economic impacts of refurbishment in a CE context are equally important. Huuhka and Vestergaard (2020) found [56] that refurbishment projects can create up to 50% more jobs than new construction projects of equivalent value, potentially stimulating local economies and preserving traditional building skills. From a social perspective, Power (2008) argued [57] that refurbishment can help maintain the social fabric of communities by preserving familiar buildings and neighborhoods. This aspect is particularly relevant in the context of rural revitalization efforts, such as those addressing Japan’s Akiya problem. Furthermore, Mahapatra et al. (2013) demonstrated [58] that refurbished buildings, when properly executed, can significantly improve occupant comfort and well-being, increasing productivity in commercial sectors and a better quality of life in residential settings.

3. Methodology

The methodology comprises (1) a systematic literature review and (2) an iterative RE-HAK system design to outline three case studies (excluding the technical/programming scheme). The systematic literature review analyzes the current state of research on the Akiya problem in Japan, rural revitalization efforts, and the potential application of blockchain technology and CE principles in addressing these issues. The review followed the PRISMA guidelines to ensure a rigorous and transparent process. We searched major academic databases including Web of Science, Scopus, and Google Scholar, using a combination of keywords such as “Akiya,” “abandoned houses Japan”, “rural revitalization”, “blockchain in real estate”, and “circular economy in housing”, obtaining 81 references. The search was limited to peer-reviewed articles published in English and Japanese to capture the most recent developments. It included gray literature due to the lack of data on the topic. Initial screening of titles and abstracts was followed by a full-text review of relevant articles. Data extraction focused on key themes, including the causes and consequences of the Akiya problem, government initiatives, sustainable living practices, and technological solutions. A thematic analysis was then conducted to synthesize the findings and identify gaps in the current literature regarding the intersection of blockchain technology, CE principles, and rural revitalization in the context of Japan’s Akiya crisis.

As for the design of the RE-HAK, the framework was iteratively improved based on feedback from potential users and stakeholders, focusing on user-friendliness and environmental impact reduction. Throughout the design process, we prioritized the integration of CE principles, emphasizing the use of local, sustainable materials and energy-efficient renovation practices. We designed a framework for AI-driven blockchain-based smart contracts that include essential fields such as property name, project duration, and a series of refurbishment tasks with their respective durations and percentage contributions to the overall project. The iterative design of the RE-HAK system followed three core principles: (1) user-centric flexibility, accommodating the widest possible diverse participant needs in just three use cases (e.g., skill levels, project scales); (2) transparency and accountability, enforced through AI-validated blockchain milestones to prevent disputes; and (3) sustainability prioritization, mandating CE metrics (e.g., waste reduction, local materials) in all refurbishment tasks. For instance, the “Option to buy” clause was added after consultations revealed its motivational value for long-term participants. Technical prototyping was omitted as this paper focuses on the framework’s conceptual validity, but future work will detail blockchain/AI implementation.

The contracts also specify attractive post-refurbishment options (buy or rent), the inclusion of monthly utility costs, and any applicable subsidies from local governments. To ensure accountability and telematic progress tracking, we incorporated milestone validation mechanisms, such as photographic evidence submission for completed tasks. This design process involved consultations with landlords, rural community representatives, environmental experts, and CE specialists to align the solution with sustainability goals. For this method, we conducted simulations using hypothetical Akiya properties to refine the contract structure and ensure its applicability across three different rural settings (please see Section 5).

4. Design of the RE-HAK

Smart contracts are self-executing agreements providing a decentralized, immutable ledger for tracking and verifying transactions [59]. In the context of RE-HAK, smart contracts offer a transparent, efficient, and automated system for managing the refurbishment and occupation of Akiya properties, automated with the support of AI.

Firstly, the transparency and immutability of blockchain technology ensure that all stakeholders have access to a shared, tamper-proof record of the refurbishment process, where multiple parties, including property owners, occupants, and local governments, may be involved. As noted by Zheng et al. (2020), this transparency [14] can significantly reduce disputes and enhance trust among participants in complex multi-party agreements. The solution (Figure 1) includes AI automation capabilities for smart contracts to streamline the management of refurbishment projects due to the automatic verification of completed tasks and the release of associated benefits (such as rent-free stays or purchase options) to reduce administrative overhead and ensure prompt, objective assessment of progress. This aligns with the findings by Macrinici et al. (2018), who highlight [60] the efficiency gains of smart contracts in various sectors, including real estate. Moreover, it can provide adaptive decision-making capabilities, potentially optimizing resource allocation and project timelines based on real-time data and historical performance, supported by research from Reshi et al. (2023) [61].

Parties begin by identifying opportunities for Akiya refurbishment and outlining the desired outcomes. Smart contracts are then set up to define milestones for the refurbishment and establish CE goals. AI-powered business logic is coded to automatically monitor refurbishment tasks, track progress, and ensure sustainability targets are met. Utilizing encryption and blockchain technology, the refurbishment stages are securely and transparently recorded. As each milestone is completed, AI-driven contracts validate the achievements and automatically execute payouts. Throughout the process, nodes on the network update the progress, keeping all parties informed and aligned using an App and a website as sole interfaces. The essential fields (Table 1), remarking the most notable ones, are as follows:

• “Property Information” and “Duration” fields provide essential context about the Akiya, including its condition and location, which are crucial factors in determining the scope and feasibility of the refurbishment project, aligned with Kanayama and Sadayuki (2021) and Yap et al. (2019), who highlight the importance successful refurbishment initiatives [62,63].
• For culturally significant Akiyas, RE-HAK’s smart contracts can optionally include historical documentation protocols. Qualifying properties must meet either: (1) age (50+ years minimum) or (2) contain traditional architectural elements (e.g., minka timber framing, kura storehouses). The system requires photographic documentation of original features before refurbishment, with records stored immutably on the blockchain. Specific preservation requirements would align with existing municipal heritage guidelines, ensuring compliance while maintaining flexibility. Such documentation could later support heritage tourism or educational initiatives, adding value to refurbished properties while preserving their historical identity. Documentation templates would be provided through the RE-HAK platform to standardize the process.
• The inclusion of “Post-Refurbishment Options” and “Subsidies” fields is a crucial factor, particularly with the “Option to buy” after a certain completion degree (%), given the recent trend with countless YouTube results (https://www.youtube.com/results?search_query=restore+akiya, accessed on 10 May 2025) on how to restore Akiyas. This approach aligns with research by Wuyts et al. (2020), who discuss [2] the importance of financial incentives and clear post-refurbishment plans in addressing the Akiya problem.
• The “Means of Verification” ensures accountability and allows for remote monitoring of progress, which is particularly relevant given the rural location of many Akiya properties, aligned with emerging trends in remote project management and verification, as discussed by Bredillet et al. (2018) on digital transformation in project management, and by Keena et al. (2025) using digital tools for a CE in urban residential buildings [64,65].
• The inclusion of “Circular Economy Metrics” demonstrates and measures a commitment [66] to sustainable renovation practices, related to the research by Ghisellini et al. (2016), who emphasize the potential of CE principles toward sustainable urban and rural development [67].
• The consideration of recent CE-related trends such as the 8Rs [68], alignment with the SDGs [69], and circular bioeconomy [70].
• Finally, the last fields of resolution keep a transparent track and validation of the process to make sure the information is available at every moment to mitigate any disputes between the host and the landlord.

Table 1. Structure of the Smart Contract.

AKIYA PROJECT INFORMATION
Property Information:	Name/Owner info/Location/Square meters/Construction year/Condition (rate 0 “ruin” to 10 “excellent”)
Project Duration:	Total time allocated for refurbishment from 1 month to a maximum of 24 months
Refurbish Expertise Required:	No/Supervision of external companies only/Previous refurbishing skills required (demonstrable)
Inclusion of Utilities:	No/Partially (specify cost limits)/Yes
TASKS (ONE SUB-TABLE PER EACH TASK (N))
Task (n) description(s):	Description/Instructions/Duration (months)/Percentage of project completion between 1% and 100%
Post-Refurbishment Options:	No/Free Stay/Rent/Buy (specify which percentage of project completion between 1% and 100%)
Subsidies:	No/Financial support from local governments linked to any task (n) (specify conditions and percentage)
Means of Verification:	Sending pictures/Video call/Signed declaration of honor/In-person visit (describe details)
Circular Economy Metrics:	For instance, energy efficiency targets, waste reduction goals, and the use of eco-friendly materials
RESOLUTION
Date of Completion of Task (n)	In time and satisfactory/Not in time (period of grace of x days granted)/Not satisfactory (reject project)
Date of Project Completion	General opinion about the process and the host, with a description of positive outcomes/Final signatures
Post-Refurbishment Benefits	No/Rental for ¥x/Purchase for ¥x/Free stay (donation to the host)

Table 1. Structure of the Smart Contract.

AKIYA PROJECT INFORMATION
Property Information:	Name/Owner info/Location/Square meters/Construction year/Condition (rate 0 “ruin” to 10 “excellent”)
Project Duration:	Total time allocated for refurbishment from 1 month to a maximum of 24 months
Refurbish Expertise Required:	No/Supervision of external companies only/Previous refurbishing skills required (demonstrable)
Inclusion of Utilities:	No/Partially (specify cost limits)/Yes
TASKS (ONE SUB-TABLE PER EACH TASK (N))
Task (n) description(s):	Description/Instructions/Duration (months)/Percentage of project completion between 1% and 100%
Post-Refurbishment Options:	No/Free Stay/Rent/Buy (specify which percentage of project completion between 1% and 100%)
Subsidies:	No/Financial support from local governments linked to any task (n) (specify conditions and percentage)
Means of Verification:	Sending pictures/Video call/Signed declaration of honor/In-person visit (describe details)
Circular Economy Metrics:	For instance, energy efficiency targets, waste reduction goals, and the use of eco-friendly materials
RESOLUTION
Date of Completion of Task (n)	In time and satisfactory/Not in time (period of grace of x days granted)/Not satisfactory (reject project)
Date of Project Completion	General opinion about the process and the host, with a description of positive outcomes/Final signatures
Post-Refurbishment Benefits	No/Rental for ¥x/Purchase for ¥x/Free stay (donation to the host)

While RE-HAK’s full-scale empirical validation awaits future pilot programs, its design intentionally mirrors real-world success stories: the framework adapts Japan’s existing Akiya Bank infrastructure (addressing policy compatibility), leverages globally proven blockchain verification methods like those in Kitakyushu’s CE initiatives [15,71], and accommodates diverse skill levels—as demonstrated later in our case studies. This “modular realism” ensures technical and policy feasibility, from photo-based validations for rural low-tech contexts (Case Study 1) to government-partnered heritage projects (Case Study 3), detailed next.

5. Results

This section exemplifies three hypothetical case studies that will be discussed in Section 6 to understand how the issues are fully addressed.

5.1. Case Study 1: Short-Term Stays with No Refurbishing Expertise to Slightly Renovating the Akiya

Ana is a Spanish retired person with no knowledge of refurbishing who wants to enjoy the sunny west coast of Japan in exchange for basic tasks. She will only stay for three months, spending some time with the basic tasks requested by the landlord, such as cleaning, painting, and gardening (

Table 2. Case Study 1: Short-Term Stays with No Refurbishing Expertise to Slightly Renovate the Akiya.

AKIYA PROJECT INFORMATION
Property Information:	Kame House/Rina Matsumoto (rina_mat@yahoo.jp)/Aya/148 sqm/year 1983/Condition: 7
Project Duration:	3 months
Refurbish Expertise Required:	No
Inclusion of Utilities:	No
TASKS (ONE SUB-TABLE PER EACH TASK (N))
Task (n) description(s):	Cleaning (month 1–30%), interior painting (month 2–30%), garden maintenance (month 3–40%)
Post-Refurbishment Options:	No
Subsidies:	No—any tools and materials (e.g., for gardening or painting) should be purchased by the host
Means of Verification:	Sending 10 pictures for each of the rooms cleaned and painted, and 10 pictures of the garden
Circular Economy Metrics:	Sending 10 pictures of the waste sorted in bags purchased, eco-friendly paint, and composted garden waste
RESOLUTION
Date of Completion of Task (n)	In time and satisfactory
Date of Project Completion	“Responsible host, thus, the Akiya is ready the enjoy our winter holidays”/Signed by Ana and Rina
Post-Refurbishment Benefits	No

).

5.2. Case Study 2: Extended Stay with Professional Skill to Renew the Akiya in Pursuit of a Discounted Purchase

Hoang is a factory worker living in a small flat with his family of 3 kids and wife. He was a carpenter in Vietnam. The Akiya needs a full wood renewal. His main motivation is the attractive option to buy the property upon completion of 80% of the tasks for a reduced price of ¥8M (

Table 3. Case Study 2: Short-Term Stays with No Refurbishing Expertise to Slightly Renovate the Akiya.

AKIYA PROJECT INFORMATION
Property Information:	Aoi Temple/Yuri Akai (yuri_akai@gmail.com)/Ine/1408 sqm/year 1935/Condition: 6
Project Duration:	12 months
Refurbish Expertise Required:	Yes, carpenter
Inclusion of Utilities:	Yes, up to ¥10,000 per month for water, electricity, and gas
TASKS (ONE SUB-TABLE PER EACH TASK (N))
Task (n) description(s):	Entrance renewal (month 2–20%), 1st floor renewal (month 10–60%), basement renewal (month 12–20%)
Post-Refurbishment Options:	Purchase for ¥8 million upon reaching 80% completion
Subsidies:	The landlord provides the wood but not the tools
Means of Verification:	The landlord will do a video call every month to verify the quality of the refurbishment process
Circular Economy Metrics:	The wood is from sustainable and maintainable forestry practices (e.g., reuse) with a seal of eco-friendliness
RESOLUTION
Date of Completion of Task (n)	Not satisfactory (reject project): The quality of the execution of the entrance in month 2 was poor
Date of Project Completion	“The host tried his best but his technique is for smaller projects”/Signed by Hoang and Yuri
Post-Refurbishment Benefits	No

).

5.3. Case Study 3: Long-Term Residency with Expert Supervision to Revitalize a Historic Akiya

Chikako is a Japanese architect, a beneficiary of the program to leave Tokyo to go to rural areas to get married and receive ¥600,000. She will be supervising the work by companies for refurbishing a historic building. The Municipality of Aso has an interest in its cultural and touristic value (

Table 4. Case Study 3: Short-Term Stays with No Refurbishing Expertise to Slightly Renovating the Akiya.

AKIYA PROJECT INFORMATION
Property Information:	Historical Prison/Urban Department (urb_dept@aso.gov.co.jp)/Aso/8040 sqm/year 1893/Condition 3
Project Duration:	18 months
Refurbish Expertise Required:	Supervision of external companies only
Inclusion of Utilities:	Yes
TASKS (ONE SUB-TABLE PER EACH TASK (N))
Task (n) description(s):	The historical prison of Aso requires a person to supervise and advise the construction companies
Post-Refurbishment Options:	Rent for 20% of the price, in return, must perform basic building maintenance duties to be ready for tourists
Subsidies:	The municipality will sub-contract all the construction companies to perform the duties
Means of Verification:	In-person visit (describe details): the Urban Department of Aso will visit the building every 3 months
Circular Economy Metrics:	Chikako must advise the construction companies about how to make their practices align with the 8Rs
RESOLUTION
Date of Completion of Task (n)	In time and satisfactory
Date of Project Completion	“Excellent results; ready to receive tourists”/Signed by Chikako and the Urban Department of Aso
Post-Refurbishment Benefits	Rental of a designated house not for tourist visits for ¥60,000 (80% funded, not funded was ¥300,000)

).

Broadly speaking, Case Study 1 achieved 100% task completion but had limited impact on property value, whereas Case Study 3’s municipal collaboration boosted cultural value and tourism readiness. Case Study 2’s failure (20% completion) underscores the foremost possible risk and the need for skill verification in high-stakes projects. The following

Table 5. Comparative Table of Case Studies.

ASPECT	CASE STUDY 1	CASE STUDY 2	CASE STUDY 3
Participant	Spanish retiree (Ana)	Vietnamese carpenter (Hoang)	Japanese architect (Chikako)
Duration	3 months	12 months	18 months
Expertise Required	None	Carpentry	Supervision
Main Tasks	Basic cleaning, painting, and gardening	Full wood renewal	Supervising historic building renewal
Post-Refurbishment Option	None	Option to buy for ¥8M	Subsidized rent (80% off) for ¥60,000
Circular Economy Focus	Waste sorting, eco-friendly paint, composting	Sustainable wood sourcing	Advising on circular 8Rs practices
Verification Method	Photos	Monthly video calls	Quarterly in-person visits
Outcome	Successful completion	Project rejected due to poor quality	Successful completion
Pros	Short-term commitment Low skill requirement Suitable for travelers or retirees	Opportunity for property ownership Utilizes specific skills Longer-term engagement	Professional development Cultural heritage preservation Government involvement
Cons	Limited impact on property value No long-term benefit for the participant Less appealing due to no “post” options	High skill requirement Risk of project failure Significant time commitment	Requires specialized knowledge Longer time commitment Dependent on government funding

summarizes the most relevant data from the previous case studies to be discussed below.

This comparative analysis highlights the versatility of the RE-HAK framework in accommodating different scenarios and participant profiles. Each case study demonstrates unique benefits and challenges:

• Case Study 1 offers a low-barrier entry point for individuals looking for short-term engagement with minimal skill requirements. While it may not lead to significant property improvements, it can help maintain Akiyas and provide temporary occupancy.
• Case Study 2 presents a more intensive engagement, offering the potential for property ownership. However, it also carries higher risks, as evidenced by the project’s rejection due to poor quality work.
• Case Study 3 showcases how the framework can be applied to larger, culturally significant projects with government involvement. This approach has the potential for broader community impact but requires more specialized skills and longer-term commitment.

6. Discussion

The RE-HAK framework presents a novel approach to addressing the multifaceted challenges of rural depopulation, sustainable living, and cultural heritage preservation in Japan. Through the lens of the three hypothetical case studies, we can discern a range of potential outcomes and implications that underscore the framework’s versatility and potential impact.

At its core, RE-HAK contributes significantly to rural revitalization by providing a structured incentive for the restoration of Akiyas. This is evident across all three case studies, where individuals from diverse backgrounds and skill sets engage in the refurbishment process. The Spanish retiree, Vietnamese carpenter, and Japanese architect represent a microcosm of the potential demographic diversity that such a program could attract to rural areas. This influx of people and activity has the potential to reinvigorate rural communities, bringing new life and economic opportunities to areas facing depopulation. As Gocer et al. (2024) note [72], such diversity can contribute to the resilience and adaptability of rural communities, fostering innovation and cultural exchange, and reinforcing the tourism sector for decision-makers.

The framework’s potential for cultural preservation is particularly notable, as exemplified by the restoration of the historical prison in Aso (Case Study 3). This aspect of RE-HAK aligns with the findings of Kuroda (2019), who argues [73] that the adaptive reuse of villages not only preserves tangible cultural heritage but also contributes to the local economy through cultural tourism. By repurposing these structures, RE-HAK creates a bridge between past and present, potentially attracting visitors and stimulating economic activity in areas that might otherwise face decline.

RE-HAK also demonstrates significant potential for skill development and knowledge transfer. The involvement of a former carpenter in Case Study 2 and an architect overseeing the renewal process in Case Study 3 illustrates how the framework can facilitate the application and enhancement of specialized skills, making the transfer of knowledge in traditional Japanese building techniques, e.g., in minka (traditional wooden houses), sukiya-zukuri (teahouse architecture), and machiya (traditional townhouses), plays a crucial role in preserving cultural heritage while adapting to modern sustainability requirements.

The economic opportunities presented by RE-HAK are diverse and potentially far-reaching. The framework offers various incentives, from the possibility of property ownership at a reduced price (Case Study 2) to subsidized rent in exchange for maintenance work (Case Study 3). These economic incentives, coupled with the opportunity to live in unique, historically significant properties, could prove attractive to a wide range of individuals, from young professionals seeking affordable housing to retirees looking for a change of lifestyle. As Ochiai (2023) suggests [74], such economic diversification is crucial for the long-term sustainability of rural economies.

A key strength of the RE-HAK framework is its emphasis on sustainable living and CE principles. All three case studies incorporate CE metrics, promoting sustainable renovation practices such as waste sorting, the use of eco-friendly materials, and the implementation of circular practices in construction. This aligns with the growing body of research, such as that by Khargotra et al. (2024), which emphasizes [75] the crucial role of the built environment in achieving broader sustainability goals. By integrating these principles into the refurbishment process, RE-HAK not only contributes to reducing the environmental impact of construction activities but also promotes more sustainable living patterns in rural areas.

The flexibility of participation offered by RE-HAK is another significant advantage. The framework accommodates various levels of involvement, from basic cleaning and maintenance to skilled carpentry work and professional oversight. This flexibility can attract a diverse range of participants, increasing the potential for widespread adoption of the program. It also allows for a more inclusive approach to rural revitalization, enabling individuals with different skills, resources, and time commitments to contribute meaningfully to the process.

The integration of technology, particularly the use of AI-driven blockchain-based smart contracts, represents a forward-thinking aspect of the RE-HAK framework. This technological underpinning ensures transparency, efficiency, and accountability in the refurbishment process. Such technological integration can be particularly appealing to younger, tech-savvy individuals, potentially attracting this demographic to participate in rural revitalization efforts. Moreover, the use of blockchain technology aligns with broader trends toward decentralization and transparency in property management and urban planning [76].

While the potential benefits of RE-HAK are significant, there are potential challenges and areas for further research. Issues such as the long-term maintenance of refurbished properties, the integration of newcomers into existing rural communities, and the scalability of the framework across diverse regional contexts all warrant careful consideration. Additionally, the legal and regulatory implications of such a program, particularly concerning property rights and responsibilities, would need to be thoroughly addressed.

The RE-HAK framework offers a promising approach to addressing the complex challenges of rural depopulation, sustainable development, and cultural preservation in Japan. By leveraging technology, embracing CE principles, and providing flexible participation options, RE-HAK has the potential to contribute significantly to the revitalization of rural areas while promoting sustainable living practices. As Japan continues to grapple with the Akiya problem, innovative solutions like RE-HAK may play a crucial role in shaping a more sustainable and vibrant future for rural communities.

While RE-HAK’s case studies demonstrate viability, systemic barriers, such as rural digital literacy gaps and resistance to blockchain adoption, emerge as critical bottlenecks. For instance, Case Study 3’s success relied on government involvement, suggesting that scalability may depend on public-sector buy-in. Conversely, Case Study 1’s simplicity highlights a low-barrier entry point for depopulated regions with limited infrastructure. These tensions underscore the need for adaptable implementation frameworks, where “light” (tech-minimal) and “full” (blockchain/AI) versions coexist.

RE-HAK’s alignment with Japan’s ¥600,000 relocation subsidy (Case Study 3) reveals a policy synergy: circular economy incentives could be layered atop existing demographic measures. Globally, Detroit’s vacant homes and Southern Europe’s abandoned villages mirror Japan’s Akiya crisis but lack integrated CE policies. RE-HAK’s modular design—decoupling blockchain from core refurbishment incentives—offers a transferable template, though local adaptations (e.g., inheritance law adjustments) are a prerequisite.

An obvious additional Case Study 4 could be taken into consideration, given the growing trend of foreigners that want to invest in Akiyas refurbishment to increase their value and make them more profitable to resell; nonetheless, this approach is linked to an aggressive real estate speculation, thus, it was preferred to maintain a cohesive “spirit” on sustainable, community-oriented approaches. This will present a clearer argument for the benefits of the RE-HAK framework in promoting rural revitalization, sustainable living, and cultural preservation. It also ensures that the research remains aligned with the CE principles and the broader goals of sustainable development in rural Japan. Moreover, if the RE-HAK framework is ever brought into life (similarly to “Akiya banks” Apps and webs) by private and/or public entities, it should be carefully detailed in the terms of the service that the resulting refurbished Akiyas should not be meant to boost the real estate speculation, and rather, should contribute to the sustainable development of the regions, rejecting these Akiya renewal projects that seem suspicious toward a possible real estate speculation.

This work reveals that the RE-HAK framework can adapt to various scenarios, from basic maintenance to skilled renovation and professional oversight. This flexibility is a key strength, allowing the program to address different types of Akiyas and attract a diverse range of participants. However, the case studies also highlight potential challenges, such as the need for quality control (Case Study 2) and the reliance on government funding for larger projects (Case Study 3). These issues underscore the importance of robust verification methods and sustainable funding models for the long-term success of the RE-HAK approach for addressing Japan’s Akiya problem while promoting sustainable living and preserving cultural heritage. Its flexible nature allows for various levels of engagement, potentially attracting a diverse range of participants to contribute to rural revitalization efforts.

While RE-HAK demonstrates promise, three limitations warrant consideration: (1) rural digital literacy gaps may hinder blockchain adoption (evident in Case Study 1’s photo-based workaround), (2) reliance on municipal subsidies (Case Study 3) raises scalability concerns, and (3) the framework cannot resolve deep-rooted issues like inheritance taxes without complementary policy reforms [5]. These constraints mirror challenges faced by Akiya Banks [11], though RE-HAK’s modular design offers incremental improvements, e.g., automating subsidy disbursement to reduce bureaucracy.

Compared to Japan’s current patchwork of uncoordinated measures, such as one-time subsidies (e.g., ¥600K relocation grants [12]) and unregulated DIY renovations (e.g., YouTube-inspired projects), RE-HAK introduces systematic accountability. Where subsidies lack long-term incentives and amateur efforts risk poor quality (as seen in Hoang’s rejected project, Case Study 2), RE-HAK formalizes grassroots energy into a structured framework with built-in verification. This represents Japan’s first attempt to align property reuse with circular economy enforcement at scale.

Lastly, the RE-HAK offers a transformative solution to rural challenges by revitalizing local economies through the restoration of Akiyas, fostering sustainable living with a CE approach, and preserving property values by preventing further decay. It safeguards cultural heritage and strengthens local identity, while its use of AI-driven blockchain ensures transparent, efficient management, minimizing disputes with automated contracts. Together, these elements create a powerful, forward-thinking model for rural renewal, heritage preservation, and sustainable growth, even building Circular Cities [77,78] to contribute to the SDG11 [79], e.g., in Kamikatsu, Osaki, and Kitakyushu [15].

7. Conclusions

This work presented the first-ever refurbish-to-host valid and valuable non-technical (e.g., excluding the programming details) framework to tackle the huge growing issue of Akiyas in Japan, allowing for various levels of engagement and potentially attracting a diverse range of participants to contribute to rural revitalization efforts for diverse refurbishment level needs.

The RE-HAK framework demonstrates how abandoned properties can be transformed into drivers of rural revitalization through its innovative integration of circular economy principles with blockchain governance. Our findings reveal that the model’s flexibility to accommodate different participation levels—from unskilled temporary residents to expert renovators—successfully addresses Japan’s dual challenges of property abandonment and skilled labor shortages. Particularly noteworthy is how the framework’s milestone-based reward system creates tangible incentives for preservation, with Case Study 3 showing that municipal involvement can amplify these effects through targeted subsidies and oversight. The environmental benefits are equally compelling, with our simulations indicating that CE-compliant renovations may reduce construction waste compared to conventional demolition approaches, while simultaneously preserving the embodied carbon in existing structures.

Nonetheless, while RE-HAK presents a promising solution for revitalizing Japan’s rural areas through the refurbishment of Akiya properties, there are several limitations to this work. One of the primary challenges is the successful implementation of smart contracts within Japan, particularly in rural regions where there may be a lack of technological infrastructure, expertise, and resistance to adopting blockchain technology. Furthermore, Budayan and Okudan (2023) identified [80] various regulatory barriers and lack of standardization as obstacles to the widespread adoption of CE practices in the construction industry (Sajid et al., 2022), and additional risks include the technological complexity and implementation challenges that must be rigorously evaluated to safeguard against adverse outcomes [81]. The accelerating costs of inaction—from property value collapse to cultural erosion—further compel intervention despite these challenges.

Looking ahead, RE-HAK’s potential extends beyond Japan’s borders to any region experiencing property abandonment and rural decline. The framework’s modular design allows for adaptation to varying legal and cultural contexts, whether applied to Europe’s depopulating villages or America’s rust belt cities. Future research should explore hybrid implementation models that combine blockchain verification with low-tech alternatives for regions with limited digital infrastructure. Additionally, the development of standardized CE metrics for building refurbishment could further enhance the framework’s replicability. As nations worldwide grapple with the twin challenges of urbanization and sustainability, RE-HAK offers a blueprint for turning systemic vulnerabilities into opportunities for community regeneration and environmental stewardship. Its success ultimately hinges on collaborative governance that bridges technological innovation with grassroots participation and policy support. Future research should also systematically evaluate cumulative cost savings across the refurbishment lifecycle, as economic impacts may compound nonlinearly when combining material reuse, labor incentives, and value preservation. Parallel studies should develop policy safeguards against potential real estate speculation, such as resale restrictions tied to subsidy thresholds or community land trust models.

Notably, the RE-HAK framework transcends Japan’s Akiya crisis, offering a suite of universally applicable concepts. By harnessing blockchain for transparent property management and championing circular economy principles through sustainable refurbishment, RE-HAK engages public actors and policymakers alike. This structured approach can revitalize abandoned or underutilized properties worldwide, whether sidelined by urbanization, economic downturns, or environmental changes. Adaptable to diverse cultural, economic, and legal contexts, RE-HAK stands as a versatile model for rural revitalization and property management, offering valuable insights for regions ranging from Italian and Spanish villages to the notorious case of Detroit’s vacant homes.