It is mandatory to take your shoes off before entering a Japanese home - you are symbolically and literally leaving the dirt of outside behind as you step up into the house. Guests shoes stay in the entryway - the genkan - which is slightly lower than the rest of the home. But where do the occupants shoes go? In the shoe closet!
This is one thing I will definitely miss about our apartment! It is so convenient - no more rooting around in the bottom of your closet, trying to see your shoe options - they are all on display!