Reykjavík to Address Short-Term Rental Market Disruption

iceland refugees

The number of apartments available for short-term rental in Reykjavík has risen sharply in recent years, paralleling the increased flow of foreign tourists into the country. Many such apartments are owned and operated by companies rather than individuals. Due to a regulatory change from 2018, companies do not have to register such units as commercial properties, allowing them to evade higher property taxes and making them harder for municipalities to track. RÚV reported first.

Short-term rentals occupy entire buildings

Kristrún Frostadóttir, chairperson of the Social Democratic Alliance (Samfylkingin), voiced her concerns about the impact of short-term rentals during a question period in Parliament last week. She pointed out that many apartment buildings that had been zoned as residential were largely, or entirely, occupied by short-term rentals. This has a negative impact on the real estate market, according to Kristrún. The MP also pointed out the difficulties municipalities face due to these apartments not being registered as commercial properties.

As noted by RÚV, the regulation was altered during Þórdís Kolbrún Reykfjörð Gylfadóttir’s tenure as Minister of Tourism. Speaking before Parliament yesterday, Þórdís stated that she had considered updating the regulation but stressed the need for municipal responsibility.

“Given the recent media reports, it’s apparent that the situation is not ideal. I urge the honourable member of Parliament to consult with her peers at Reykjavík City Council about managing Airbnb activities in the capital,” Þórdís stated.

Reykjavík seeks regulatory amendment

Reykjavík Mayor Dagur B. Eggertsson described the 2018 regulatory change as problematic. He stated that it made it more difficult to track short-term rentals and enforced regulations, “especially our ban on year-round short-term rentals in residential areas. We advocate for reverting this legislation and maintain that local authorities should oversee this sector, currently managed by the district commissioner,” Dagur told RÚV.

Dagur also mentioned his intention, on behalf of the city, to formally request Tourism Minister Lilja Alfreðsdóttir to amend the regulation. “Addressing such issues, where regulations lead to unintended consequences, is a crucial collaborative effort,” he added.

New Finance Minister Þórdís Kolbrún Moves Forward with Íslandsbanki Sale

Minister of Tourism, Industry, and Innovation Þórdís Kolbrún Reykfjörð Gylfadóttir

Minister of Finance Þórdís Kolbrún Reykfjörð Gylfadóttir has recently expressed support for the continued sale of state-owned Íslandsbanki shares. RÚV reports.

Formerly Minister of Foreign Affairs, Þórdís recently switched places with Bjarni Benediktsson in the wake of his resignation from office.

Þórdís stated to RÚV that although it would be a good move for the state to divest itself of ownership in Íslandsbanki, it may be necessary to change some regulations and guidelines in light of the recent controversy.

Preparatory work underway

It has now been some nine days since Þórdís assumed her new position as Minister of Finance. She discussed the recent government changes and her priorities in the coming weeks and months on the current events talk show Silfurinn last night.

On Silfurinn, she stated that her ministry is currently working to prepare for finalising the Íslandsbanki sale and that nothing has changed regarding the goal of state divestiture in Íslandsbanki.

Þórdís stated that the state-owned shares in Íslandsbanki account for several billion ISK and that the sale is of great importance to the treasury. While not divulging details, she stated that a good price had been obtained for the sale and that the recent opinion of the Parliamentary Ombudsman would be taken into account.

“I am of the opinion that it is simply right to divest the state of its ownership in Íslandsbanki. I know there are voices out there that are concerned that it is done properly and that all the rules are followed,” she said. “Some rules need to be changed or the methodology of selling needs to change as well. It should be a completely public auction, as broad and general as possible, so the public can easily participate.”

Þórdís further stated that she hopes the work will begin as soon as possible.

 

 

Zelenskyy Gifted Icelandic Lopapeysa from Foreign Minister

Icelandic sweater for Zelenskyy

Ukrainian President Volodymyr Zelenskyy was gifted an Icelandic sweater (i.e. lopapeysa) by Iceland’s Minister for Foreign Affairs on Sunday. “I’m proud and honoured,” the designer of the sweater told Iceland Review this morning.

“A strange request”

Writing on Facebook yesterday, Icelandic singer Salka Sól described an unusual phone call that she received from the Assistant to the Minister for Foreign Affairs recently:

“I was asked to knit, for the President of Ukraine, an Icelandic lopapeysa, which the President would receive as a gift from the Minister for Foreign Affairs. I couldn’t say no to such a request. I called my collaborator Sjöfn Kristjánsdóttir, and together we knitted two lopapeysur over the space of five days with good help from Eygló (Gísladóttir). Zelenskyy received the sweaters on Sunday … we hope that he’ll be spotted wearing them soon; most of all, however, we hope that the war will end.”

In an interview with Iceland Review this morning, designer Sjöfn Kristjánsdóttir echoed Salka’s sentiments: it was the most unusual request that she had received.

“We were very surprised, but at the same time, incredibly proud and honoured to be handed this assignment. Zelenskyy is an incredible person, whom we have watched – like the rest of the world – from the sidelines. To be able to contribute, on behalf of the Icelandic nation, is amazing; it’s something that I’ll never forget.”

As noted by Sjöfn, the Icelandic lopapeysa is a legally protected product, having received a Designation of Origin status from the Icelandic Food and Veterinary Authority in 2020; sweaters with the traditional decorative pattern can only be labelled as “Icelandic sweaters” if they are knitted by hand in Iceland using Icelandic wool. “This sweater meets all the criteria,” Sjöfn observed, adding that producing two sweaters in the space of just five days was a lot of work.

“Of course, when two hyperactive women come together – they decide to make two sweaters. We knitted incessantly. I had a sick child at home; I made good use of sleepless nights.”

Witnessing the destruction firsthand

As noted in an article on Mbl.is, Foreign Minister Þórdís Kolbrún, alongside other foreign ministers from the Nordic and Baltic countries, met with Volodymyr Zelenskyy and other Ukrainian ministers on Sunday.

The ministers discussed the situation in Ukraine, with representatives from the latter country calling for continued support. The ministers from the Nordic and Baltic countries also acquainted themselves firsthand with the damages wrought by the Russian military and laid a wreath of flowers in honour of the victims of The Holodomor (the Great Famine), which cost millions of Ukrainians their lives between 1932-1933.

“It’s important to witness the conditions of the Ukrainian capital with one’s own eyes,” Þórdís Kolbrún was quoted as saying in a press release on the government’s website, “even if our visit was brief. One is, first and foremost, faced with the terrible consequences of Russia’s incessant attacks on the country’s infrastructure. Keeping the electricity on, during the intense and tangible winter cold, is a constant battle: everything is covered in snow and the frost is biting.”

Ukraine
Salka Sól, Þórdís Kolbrún, and Sjöfn Kristjánsdóttir