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As Japan's population shrinks, consolidating scattered residents into denser, more compact cities is increasingly seen as a must. Yet the steady outward creep of the suburbs continues unabated. In the 10 years through 2015, residential areas expanded by 1,773 squared kilometers, an area three times the size of Tokyo's 23 central wards. The growth suggests failures of both the real estate market and urban planning. Even with an estimated 8 million homes vacant, many in urban centers, new ones continue to be built in cities fighting over a shrinking population pool. And new suburbs want their own shopping centers, hospitals, libraries and community centers, raising the risk of ballooning municipal costs.

Of the 1,386 cities, towns, villages and wards covered by the study, 43 added more than 5 square kilometers of residential area. Seven of the top 15 municipalities in terms of growth allowed residential land to expand despite having so-called compact city plans. The expansion reflects a scramble by depopulating municipalities to attract more people. Restrictions have been eased on suburban housing construction, turning farmland and hillsides into houses and apartments.

Low-density populations make it more expensive to build and maintain necessary infrastructure and handle public services, even as tax revenues shrink. Many local governments recognize sprawl as a problem. Roughly 270 municipalities across Japan have drawn up plans to concentrate housing and public works construction in urban centers. But follow-through has been lacking, in part because large-scale efforts that would require people to actually pick up and move closer together are politically taboo. When populations spread out into the suburbs, downtown areas risk being neglected and falling into disrepair. Abandoned homes are on the rise in smaller cities as well. Many experts say creating cities suited to a shrinking population will require retightening the loosened restrictions on housing construction that have permitted the rise in suburban sprawl.