The Icelandic rental market is not a side issue or merely a stopgap in the housing system. Many members of Efling rely on the rental market for the long term, and the problems facing renters will not be solved simply by hoping that tenants will eventually be able to buy their own homes.
This is the message of a resolution adopted at the Efling congress on 27 February, calling for fundamental reforms to Iceland’s rental market. The resolution outlines the demands of the Efling trade union to the Icelandic government in order to address the serious problems currently affecting the rental sector. The main demands include:
- Introducing laws and regulations to limit sudden rent increases, support longer-term rental agreements, and reward reliable tenants.
- Ensuring regular inspections of rental housing to assess conditions and fair pricing.
- Requiring rental agreements to be made in Icelandic krónur.
- Making housing benefits individual, based on each tenant’s income.
- Establishing databases of tenants and landlords to increase transparency.
- Restricting large-scale short-term rentals for tourists.
- Significantly increasing the supply of rental housing and ensuring a role for non-profit rental organisations in that development. In addition, a housing association for workers should be established, where it would be possible to acquire homes through rent-to-own arrangements.
The full resolution follows below.
Rental Housing
The Icelandic government must face a simple, undeniable fact: the rental market is not some side issue or a temporary bandage on Iceland’s housing system. Many Efling members are in the rental market for the long term. They depend on their rental contract as a lifeline. The problems of the rental market cannot be fixed by just hoping renters will magically become homeowners. A healthy housing market must allow people to choose between buying an affordable home and renting securely and affordably. What Iceland needs is a humane, well-regulated, stable rental market — a real option for working people — just like we see in our neighboring countries.
Efling members make the following demands of the Icelandic authorities regarding rental housing:
- Far too little has been done to rein in landlords who can turn tenants’ lives upside down. Laws and regulations must guarantee fair and reliable limits on rent increases, encourage long-term agreements, and reward responsible tenants who fully honor their contracts.
- The relevant authorities (e.g., HMS) must be empowered to conduct inspections in accordance with permission that must be introduced to make sure these laws and regulations are complied with.
- Regular inspections of rental housing should be carried out, for example, every two years, where the condition of the property is assessed, a fair market value is determined, and to ensure quality, safety, and transparency in the rental market.
- Rental contracts should be made in Icelandic Krona and not any other currency.
- Landlords should be made responsible for ensuring that the registration of tenants residing in a rented property is accurate and up to date.
- Housing benefits should be calculated individually, based on each tenant’s personal income, rather than on the combined income of all tenants. Such an approach would be more consistent with Article 76 of the Icelandic Constitution, which guarantees an individual’s right to social assistance.
- It is also important to establish a database of tenants and landlords. Access to such information promotes a healthy rental market with increased trust and transparency in the process for both parties.
- Additionally, access must be ensured to an independent party that both tenants and landlords can turn to, to record and preserve photographs of the condition of the residence before and after the lease. Such documentation can serve as impartial evidence and contribute to a fair settlement of the deposit at the end of the rental period.
- The plague of short-term tourist rentals must be addressed much more aggressively. Renting out your own home for short periods during the year as supplemental family income can make sense. But it must not become a large-scale industry for investors and speculators who swallow up housing that the people of this country need to live safe, normal lives.
- The supply of rental housing must be increased as part of a broader, fully funded, timed national housing plan — built on solid forecasts and developed in cooperation with municipalities. Non-profit rental organizations must have a guaranteed share in this expansion, for example, via Bjarg, which has proven its value as a focused and effective solution for lower-wage earners. There should also be a housing society for workers that offers the possibility of ownership through leasing.