”Room for rent in 101 Reykjavík. 11 square metres. Internet not included. 65.000 kr. per month.”
“Room for 1 person. 50.000 kr. monthly, plus deposit. The room is very small and not very nice, but maybe somebody would like to take it.”
“One room in a shared apartment in a quiet area in Garðabær. 75.000 kr. per month.”
For every one of these ads that pop up on a Facebook page for Iceland’s expats there are a dozen posts that read like cries for help. People who are moving to Reykjavík for school, or an internship, or on a whim; people who have lived in this city for years; all needing but having a hard time finding affordable places to live.
And it’s no wonder those on the prowl in Reykjavík’s rental market are pleading on the internet for an affordable abode. They are few and far between, with many moving toward renting short-term for big profit to tourists rather than offering long-term accommodation at a reasonable rate to city residents.
The horrendous state of Reykjavík’s rental market was a hot topic in the recent municipal elections, and one of the few speaking points that all parties appeared to agree on.
“It is in shambles,” said the Pirate Party. “It’s insecure and unhealthy,” insisted the Social Democratic Alliance, which came out victorious in the May 31 elections.
The Independence party’s pre-elections chatter blamed the lack affordable housing on the City not making enough plots of land available for development. A sentiment conjured by The Progressive party’s nationalist leader Sveinbjörg Birna Sveinbjörnsdóttir in attempting to justify her xenophobic argument that a plot of land granted to the Muslim Association of Iceland for building the country’s first mosque should be taken back…
We Can Make A Fortune Renting To Tourists!
No small contributor to the current state in which Reykjavík’s rental market finds itself is the tourist boom and the eagerness of enterprising Icelanders to get a piece of the pie. As tourism continues to grow in Iceland it seems that every owner of a home or apartment is getting into the hospitality business, turning their properties into guest houses, and listing their apartments exclusively on sites like Airbnb.
This has lead to many long-term renters in 101 finding themselves evicted as their landlords seek to cash in on the flood of tourist dollars into the country.
“It’s nothing more than greed,” said Sarah* of her former landlord’s decision to dive headfirst into the tourist rental market, leaving her and her young family with just 8-weeks to find a new place to live as he rushed to get their long-term rental tourist-ready in time for June 1.
“I know the tourism industry, so I’ve been hearing for years about people being kicked out so that their landlords can make a quick buck off of tourists. I just never expected that I would be in the same position.”
After three years renting from her landlord, Sarah was entitled to a minimum of six-months notice to vacate the apartment, but given the fact that she shared the premises with her landlord she went along with the eight-weeks notice and moved out. Luckily for Sarah, she and her family were able to find a lovely and spacious apartment in 101 to move into, but others without as flexible a budget would likely not be so fortunate.
There are currently more than 1,000 Reykjavík properties listed for rent on Airbnb, a popular site for renting entire homes, spare rooms, or shared spaces at a nightly rate to travellers. More than 600 of those are in Miðbær and Vesturbær, Reykjavík’s central neighbourhoods. Single rooms tend to start at 5,000 ISK nightly, and entire apartments at around 15,000 ISK nightly, depending on the time of year.
While not all 1,000 plus apartments listed on Airbnb in Reykjavík are set aside strictly for tourists—some are legitimately lived in by individuals and families looking to make some spending money while they’ll be away from home anyhow—many listings are properties that have been bought and renovated explicitly for the purpose of renting to tourists. Many “host” profiles even state something along the lines of “I have numerous rentals available throughout 101” imploring would-be guests to be in touch for something that suits their specific needs.
Unless their specific need is a reasonably priced long-term rental, then they’re out of luck.
What’s Being Done?
In October 2013, the City of Reykjavík released a housing plan that projected that more than 7,500 residences of various configurations would be constructed in the city by 2022, with an average of 750 being added to the market yearly.
The Social Democratic Alliance, which has been in a coalition government with The Best Party for the past four years, even campaigned on the promise of adding 2,500–3,000 new apartments to the city in the next four years.
These numbers could very well come to fruition depending on the success of a scheme developed by City Council last year. Called Reykjavíkurhús (Reykjavík Houses), the scheme would see the city granting plots of land to developers that would, in turn, use that land to build affordable housing for Reykjavík residents.
In a market where everybody has traditionally bought a home, but in a time when hundreds are defaulting on their mortgages monthly, development of affordable housing in the city would be a welcome addition.
It’s a jungle out there. With the tourist boom being treated as a gold rush by enterprising developers and property owners, the cost of renting in Reykjavík is going through the roof.
While plans have been set in motion to remedy the situation and provide more options to residents whose incomes are currently being stretched too thin, relief cannot come soon enough.
“It’s a shame, so many families are cramming themselves into one-bedroom apartments because they don’t want to give up living in the centre, but after having one or two children they can’t afford a place with two or more bedrooms in the city,” laments Sarah. “There’s just no affordable options left.”
* Reykjavík’s rental market is small, competitive, and very dependent on connections and word of mouth. For this reason names have been changed.
Buy subscriptions, t-shirts and more from our shop right here!