The research examines precarity among people resorting to the housing rental market, often living in conditions that most Icelanders would not deem acceptable in the long.
Despite a strong preference for homeownership among the public as well as in policymaking, the number of individuals in the rental market has increased after the 2008 financial crisis. That proportion has remained almost unchanged since then, despite continuous economic growth, except for the period during the Covid-19 pandemic.
The study aims to determine why such a high proportion of individuals are still resorting to the rental market and what policies are necessary to change this trend. One significant factor is related to tourism. The number of long-term rental apartments has decreased with the advent of Airbnb short-term rentals for tourists, which often provide better income for landlords. Simultaneously, the number of new Icelanders, who come from abroad, has increased significantly due to employment opportunities in the tourism sector. Many of them have no other alternative than renting an apartment, at least initially. As a result, the supply of rental housing has decreased while demand has increased.
Although wages have increased in real terms in recent years, the rise in housing prices has been even higher. With soaring property prices, people’s ability to buy their own homes has been impaired compared to the past. There is a risk that a “rental generation,” similar to the trend seen elsewhere, is emerging in Iceland, known as “Generation Rent.” Such a situation can lead to dissatisfaction and insecurity among many individuals.
This research aims to compile information and explore possibilities to counteract this development.
Funding
Mobility and Transnational Iceland and the University of Iceland Research Fund
