Unnur María Máney Bergsveinsdóttir, like a lot of Icelanders, rents out her downtown apartment on Airbnb. She travels a lot, especially in the summer, because of her work as a circus performer. She doesn’t rent on the local market because it’s her home, and she infrequently returns, even during the summer.
There’s been a lot of talk about how Airbnb has affected the local rental market in Iceland, but very little has been said about what the Airbnb experience is like for those renting out all or part of their homes. Unnur feels that while the process is much simpler now, there is still room for improvement, and the real problem lies not with ordinary Icelanders, but in larger real estate companies.
Off to a rough start
“When I got my permit, they were in the process of making new arrangements,” Unnur tells us. “I was trying to get information on how things are supposed to work—I am a ridiculously law-abiding person—and was always told, ‘Well, we’re still trying to figure out how it will work,’ and so on. It was weird though, because they changed the law in the middle of summer, and it was even stranger that in December they still couldn’t give us any information about how things had changed.”
Unnur was finally able to apply in January, with the plan to start renting her place out in March. Come March, she still hadn’t heard anything from management at Airbnb. This wasn’t due to laws required by the city, but the necessity of having a health inspector’s approval, which as of May is no longer a requirement.
“Personally, I felt that paying about 70,000 ISK in all for the inspection and a stamped paper saying that my house was OK was kind of stupid,” says Unnur. “The inspector came in, we had a coffee and a nice chit-chat, but he didn’t even check if I had a working battery in my fire alarm. They changed the law two days after I paid it, and up until that point I still couldn’t rent out my apartment.”
Unnur speculates that this part of the law was probably changed because so few people were applying for it anyway. The permit is now only 8,000 ISK, paid to the city, and things have been going pretty smoothly since the initial hiccups.
“Now I can understand why people are doing Airbnb illegally. It’s been a complicated and tedious process. I’m a goody-goody when it comes to rules, but I can understand why some people might have just said ‘Fuck it’ and started renting out rooms without booking a health inspection. The way they set up the system sure didn’t do me any favours.”
The market crunch
“A lot of the Airbnb places I see now are professional Airbnb flats,” Unnur continues. “I also see it a lot when I travel, because I use it myself. These are places that are not homes, and no one ever lives there, like a hotel, basically. The way I see it, that’s what’s making the rent situation in Iceland horrible. It’s totally normal that people like me can gain a little from renting our homes while we’re not using them. But as soon as you start having people investing, buying apartments—places where no one ever permanently lives—then those places of course go completely out of the rental market.”
Unnur mentions that when you compare the number of Airbnb listings to the number of permits actually issued by the County Seat, there is a significant discrepancy. While things are going well for her, there are still changes she would like to see made, for everyone’s sake.
“What I would like is for the city to make an agreement with Airbnb to get information from them,” she says. “I think if someone wants to buy up apartments and rent them out, then those places should be taxed as businesses. Then they’d have to choose between either paying high taxes, or putting those homes back on the market. But that’s not happening right now.”
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