House prices are low, rents are low, population density is high.
How do they do it? Can we do that in the US or the rest of the western world?
If they did evade anything, they pretty much have housing on easy-mode by default because of demographics alone. Obviously places like that exist in the US, look at St. Louis. Or some of the rust belt. But nobody is going to think those places figured out something clever.
Maybe I'm naive, but it seems obvious: smaller plots, denser arrangements, and better zoning rules. Plus I'm pretty sure money isn't cheap in Japan and land is primarily bought in cash.
Still, in the US land/housing is pretty cheap... outside of the popular areas. I'm not saying this to say everyone should just move out of cities, but to show that it's not an American issue, but an urban American issue. Our current rules do not scale into urbanism.
There relatively few old homes in Japan.