The Wave Crests: Renting In Reykjavík

That the rental market in Reykjavík is experiencing a crunch is no secret. While working class Icelanders struggle to find a place to live, many properties that could be rented out to locals are instead listed on Airbnb for visitors. In fact, most long-term Airbnb listings in Reykjavík are not legally registered with city. The Housing and Financing Fund estimates that some 1,400 Airbnb apartments in Reykjavík, which are being rented to tourists beyond the 90-day limit, are not registered as businesses as required, resulting in a loss of revenue upwards of 1 billion ISK. Even when legally registered, Airbnb listings comprise nearly 44% of the rental market, which has begun to have a serious impact on available housing for locals.

As a result, those people seeking a place to rent are growing increasingly desperate, and angry. Taking a look at any of a number of Facebook groups devoted to people seeking or offering rental properties reveals that the tide is turning. Where at one time a room without access to a shower or kitchen going for 180,000 ISK per month would spark a deluge of excited “sent you a PM!” responses, increasingly people are responding with incredulity and outrage. In some cases, would-be landlords have responded by deleting these posts, or lowering the rents on them.

We reached out to a number of people currently looking to rent or who are already renting. Many were reluctant to go on the record for fear of hurting their chances of finding a place to live. These three brave tenants, however, made the decision to tell their side of the story. Here’s what we asked them:

1. How long have you been on the rental market; i.e., how long have you been searching and/or living in a rental property?
2. What would you say are the biggest problems in the market right now? What do you think contributes to these problems?
3. What’s one of the most frustrating problems you’ve run into personally?
4. Do you think landlords are becoming more greedy? And is the tide turning against them?
5. What, in your estimation, needs to be done to correct the situation?

Susana Pinto:
1. I’ve been on the rental market since September and am already looking for another place to live.
2. High prices together with strict rules for the tenant. Probably greediness. We are at a point where some people ask for up to 5,000 ISK per square meter, which is absurd if you compare it to what people get paid.
3. Dishonest landlords at the moment, running an illegal place and not returning security deposits, just to point out the worse things among others.
4. I do, and it will be a downfall sooner or later.
5. Being less greedy will help. Families are cooperating with them and their country for all of us to have a better life, but end up overwhelmed with absurd amounts being asked for a place to live in.

Greta Macionytė
1. I have been on the rental market for over a year.
2. I guess in general the biggest issue is shortage of apartments for rent. Because of that the prices are insanely high and landlords are getting “creative”; renting out storage spaces, garages and other locations. Of course I’ve seen many examples where something like a garage have been turned into cozy little studio, but that’s not always the case. Also, there are places where renters also have to “compete” against tourists and landlords who have turned their apartments into small a bed & breakfast and renting through AirBnB.
3. Compared to some stories, I consider myself very lucky. The first place I rented out from my friends and once they left the country I took over the lease under my name. And with my current place, I got insanely lucky. It was the only place we saw and we got it. I guess the most frustrating thing is you can’t really be picky. If you want to find a place you kind of have to lower your expectations. If you have some deadline, like if your current lease is about to expire, then you just grab the first apartment that called back when you applied. In a weird way it’s not you choosing the apartment, but the apartment choosing you.
4. I guess every market has those people who will try to take advantage of whatever situation and the rental market is no exception. As I mentioned, there are very creative options out there, like the infamous toilet-in-shower places. In other countries you won’t find ads with notes like “700$/month, no access to toilet/shower,” but here these things do not surprise that much. Usually people accept a situation like that out of desperation just to have some kind of roof over their head. Unfortunately, when places like that gets rented for 60,000-100,000 ISK, then all decent apartments cost even more.
5. I’m not really sure what could help. With all the new apartments that are being built in the Reykjavik area, hopefully in the future there will be more apartments up for rent. I had a conversation today about whether the government can help deal with Airbnb by passing laws—maybe a little. After all, we live in the age of the Internet, where you can still be part of a sharing economy via Facebook groups and other outlets.

Gabe Dunsmith:
1. I have been searching for a property in Reykjavík for approximately one month. (I am currently living in the U.S. and will be traveling to Iceland in January.) Previously, I lived in Reykjavík for three months in the spring of 2017.
2. The rental market is oversaturated because of Iceland’s full-throttle approach to tourism. Simply put, when tourists clog up apartments in downtown Reykjavík, it pushes up prices for the rest of us. Rental costs have ballooned to the point that many young Icelanders cannot afford to rent their own apartment, families are being pushed out of the city center, and foreign workers and students struggle to find even the most basic of living arrangements.
A combination of unchecked tourism, the proliferation of Airbnb properties, and government policies that promote landlordism over affordable living are at the crux of the matter. Since 2008, Icelandic politicians have elevated tourism to something like a god—infallible, curative and unassailable. Sure, tourism has worked wonders for the economy. But it isn’t a miracle drug. It comes with its own set of pitfalls that must be tackled assiduously and cogently if Iceland is to reverse the slow exodus of downtown residents from its capital and only large city. What’s lacking is the political will to make hard changes.
3. In early December, after a week of combing housing listings, I finally found a place within my price range—only to discover it had no shower or kitchen. I realized that prospective renters are being asked to pay more and more for less and less.
4. I’m not convinced that landlords are becoming greedier—they’re simply taking advantage of the current political moment. When demand rises without adequate supply, costs skyrocket. So I can’t necessarily fault the landlords for raising prices. What does strike me as woefully egregious is the larger system at play—one that funnels money into the pockets of a handful of individuals while encumbering residents who are simply trying to put a roof over their heads.
5. The attitude surrounding tourism must change. Pushing a glob of tourists several times the size of Iceland’s population through the country each year is simply unsustainable—environmentally, economically, socially, spiritually. A few things that might help: a limit on the total number of Airbnbs, a ceiling on rent prices, housing assistance for individuals and families, and a curb on the number of tourists entering the country.