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35,000 Apartments to be Built in 10-Year Housing Plan

State and municipal authorities reached a major agreement yesterday, July 12, in which they committed to expand the supply of housing by 35,000 units over the next 10 years.

The decision came in partial response to a working group formed last year, which highlighted the need for both social housing and affordable housing in Iceland. The working group emphasized the nearly-unprecedented explosion in housing costs over the last two years and the need to increase housing supply in order to insulate Icelanders, especially those with low income, from the effects of the real estate market.

The agreement is to run from 2023 to 2032, with a goal of 4,000 units a year for the first five years. Of these new units, 30% of them are to be affordable housing, and 5% are to be set aside as social housing, housing which municipalities have a legal obligation to provide to some qualifying individuals and families.

Sigurður Ingi Jóhannsson, Minister of Infrastructure, stated that a major goal of the new agreement is to protect residents from the large fluctuations that have characterized the last years. These fluctuations have especially impacted first-time homebuyers, who are having difficulty entering the market because of the ballooning prices.

The agreement also aims to streamline some aspects of housing development, including an increased emphasis on digital housing plans and bringing several other regulatory processes under one common framework.

 

 

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