Thousands Are Living in Non-Residential Buildings in Iceland

Bræðaborgarstígur fire

Between 5,000 and 7,000 people in Iceland are currently living in properties that have been classified as commercial or industrial buildings and not residential buildings. The largest group among them are people who have lost their jobs as a result of the COVID-19 pandemic. The data comes from a report commissioned in the wake of the deadliest house fire in modern Icelandic history, which took three lives in a crowded housing facility for foreign workers in Reykjavík.

“The report confirms the reality we have been facing for far too long,” stated Drífa Snædal, President of the Icelandic Confederation of Labour (ASÍ). “Housing issues are in a mess, there is a shortage of apartments and people in need have to resort to unapproved housing.” Drífa pointed out that not only does lack of proper housing affect quality of life, but it also has a negative impact on children, who need to have a registered address in order to access schools and other services. She called the lack of proper housing “a threat to people’s health and even their lives.”

In many cases, the unregistered and inadequate housing is provided to temporary workers by their employer, putting workers at risk of homelessness if they lose their job. Fire safety requirements differ between residential, commercial, and industrial housing and those living in non-residential buildings are often not sufficiently protected from the risk of fire.

Read More: Fire Sparks Conversation About Working Conditions Faced by Foreigners

Under current Icelandic legislation, it is illegal to register residence in commercial premises except in exceptional cases. This means there is no official information on exactly how many people live in such housing and where, which can create danger in the event of natural disasters and complicate the work of first responders. The report’s authors proposed allowing temporary residence registration in commercial premises that had fulfilled certain requirements in order to tackle this issue in the short term. They also suggested limiting the number of people who can be registered as residents at a single address, allowing authorities to have a more accurate picture of how many people truly live at each address. Furthermore, they suggested legislation be implemented that makes it mandatory to register all lease agreements: there is no such legislation in place currently. This would provide authorities with more accurate data on the rental market.

Read More: Charged with Endangering Workers in Unsafe Living Quarters

The investigation was conducted by the Housing and Construction Authority in collaboration with representatives from ASÍ, the National Registry, and the fire department.

Increased Housing Security for Renters in Proposed Bill

housing Reykjavík

Minister of Social Affairs Ásmundur Einar Daðason presented a bill proposing widespread changes to rental law at an open meeting yesterday. The bill is part of the government’s “standard of living contract” signed in 2019.

“The bill is intended to improve housing security for tenants by preventing unreasonable rent increases and promoting long-term rentals, as well as establishing mandatory registration of lease agreements and mediation,” the bill’s abstract states.

Banking collapse forced low earners onto rental market

Iceland’s rental market grew by 70% following the 2008 banking collapse, and most who entered the market were low earners, according to information presented at the open meeting. During the same period, rental prices increased by around 45%. Today around 8,000 households pay over 50% of their income toward rent. According to international standards, housing costs are considered burdensome if they exceed 40% of an individual’s income.

According to the bill, the average duration of rental leases in Iceland is just 14 months. The proposed legislative changes would tighten the regulations on short-term leases, thus encouraging longer contracts. The new legislation would also limit landlords’ ability to increase rent.

Another change proposed by the bill is the establishment of free mediation services to tenants and landlords, assisting them on settling disputes without going to court.

Drífa Snædal, President of the Icelandic Confederation of Labour (ASÍ), praised the bill, stating “One can’t think of a better improvement to collective agreements than lowering housing costs.”