The Bjarg íbúðafélag housing association will be lowering the rent for a number of tenants by as much as ISK 35,000 [$280, €238] a month, RÚV reports. The rent decrease will go into effect on September 1.
Established by the Icelandic Confederation of Labour (ASÍ) and the Federation of State and Municipal Employees (BSRB), Bjarg is a not-for-profit foundation that aims to provide affordable, long-term housing for low-income families and tenants. According to new data collected by the Housing and Construction Authority, once the decrease goes into effect, rent paid by Bjarg’s tenants will be 20% cheaper than rent on the general housing market.
Bjarg has credited a recent government decision to grant favorable, long-term refinancing on the loans it received from the Housing and Construction Authority. The new lending terms will apply to loans that go toward the construction and purchase of apartments for the social good, such as in the case of a nonprofit like Bjarg. A letter of intent outlining this decision was co-signed by Minister of Social Affairs and Children Ásmundur Einar Daðason, Bjarg CEO Björn Traustason, and Housing and Construction Authority Assistant Director Anna Guðmunda Ingvarsdóttir.
Bjarg made its first apartment available two years ago and now rents around 500 units. Björn says that the foundation expects to have as many as 1,000 apartments within a few years.
The rent decrease is expected to put pressure on other apartment associations to lower their rents as well, Ásmundur Einar remarked to Vísir. “I’ve no doubt it will. This is the first time that we’ve had lower interest rates passed directly down to tenants. This is what happens with companies like Bjarg, which ensures that all profits go straight to the lessee and not to the landlords.”