The Icelandic government is offering to buy all residential housing owned by individuals in Grindavík and take over the mortgages on the properties. The cost is estimated to be ISK 61 Billion [$443 Million, €411 Million], according to a press release from the ministries in charge of the programme.
The January 14 volcanic eruption near Grindavík destroyed three houses, caused crevasses to form across town, and displaced the 3,800 inhabitants for the foreseeable future. The town had already been evacuated once before, on November 10 last year, due to seismic activity. The latest eruption on February 8 damaged a hot water pipeline, cutting off heating for Reykjanes homes.
Bill introduced this week
During a meeting of the cabinet of ministers Friday, a bill on the purchase was agreed upon. It was put into an online consultation process and will be introduced in Alþingi, Iceland’s parliament this week. Over 300 comments on the bill’s contents have already been submitted. The government has conferred with opposition party parliamentarians and introduced the bill to the municipal government of Grindavík.
A real estate company, Þórkatla, will be established to handle the purchase and management of the properties, which it will purchase for 95% of their official fire insurance value, with the relevant mortgages deducted. The company will be financed by the treasury and with loans from financial institutions. The state is expected to receive reimbursements from the Natural catastrophe insurance of Iceland for any properties rendered uninhabitable.
Grindavík residents will have until July 1 to apply to enter the programme and have their homes bought.