Alex Tabarrok explains the Japanese zoning system:
Japan has 12 basic zones, far fewer than is typical in an American city. The zones can be ordered in terms of nuisance or potential externality from low-rise residential to high-rise residential to commercial zone on through to light industrial and industrial. But, and this is key, in the US zones tend to be exclusive but in Japan the zones limit the maximum nuisance in a zone. So, for example, a factory can’t be built in a residential neighborhood but housing can be built in a light industrial zone.
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In addition, residential means residential without discrimination as to the type or form of resident.
On that last point, one commenter notes that the Japanese do not have to worry about crime, and Steve Sailer added that “Americans have replaced discrimination by race with discrimination by cost, which works pretty well, but, of course, it’s very expensive.”