[imtringued]

>I wonder if this acts as a somewhat hidden subsidy to life whereas for people in many Western countries it is normal to think "there is no way I am living in area X/Y/Z" due to security concerns for them or their families, in Japan you basically don't need to take that into consideration at all. Everywhere is pretty safe (relatively speaking).

Hidden subsidy? It's not a subsidy. Americans self impose an additional burden on themselves. They want their homes to be expensive because they don't want undesirable people to live near them.