Reykjavík Grapevine - 25.08.2017, Síða 24

been changing quite drastically at a
brisk pace. The great influx of tourists
has changed everything from the num-
ber of people walking outside, to the
availability of restaurants and housing
prices.
Fleeing the nightmare
“I see the future downtown as nothing
but lost and confused tourists looking
at each other, with nothing organic
left. A single use Benidorm place. The
only thing that keeps downtown alive
is that Icelanders can’t go anywhere
else to have fun. If the entertainment
finds another home, then the area is
completely dead,” says Grímur. “But
this isn't the tourist’s fault. He just
goes online to find a place to stay in
Reykjavík; he has nothing to do with
urban planning—that is all on the mu-
nicipal government. It hasn’t stopped
anything and has allowed all the greed-
iest people in the country to place an
insane number of tourist traps on
these couple of square kilometres, and
now I live in the middle of that trap. A
tourist nightmare.”
Grímur has finally given up and
has decided to move away from the
downtown area. Five years ago, he had
moved in to a place where he knew
people, but in that span of time, ev-
erything that attracted him to the area
has changed. Now the booming rent
prices have driven most of his friends
out of the neighbourhood and forced
the much loved Tíu Dropar Café in his
basement to close. Outside his window
there is endless construction noise and
instead of neighbours, he has hotel
guests living next door.
“There might be a lot of new restau-
rants and bars opening up, but most of
them sell things at tourist prices and
are, therefore, out of the price range
for locals,” says Grímur.
Up up the prices
Real estate prices have skyrocketed in
recent years. Landsbankinn estimated
that they will rise 20% between 2016 to
2017, with the downtown region see-
ing by far the biggest increase. In fact,
the British consultant firm Knight
Frank claims that nowhere in the
world prices rose more during the first
three months of 2017 than in Iceland.
According to a report by Íslandsbanki
released earlier in the year, in 2016
there was an increase of 116% in the
number of accommodations listed on
Airbnb in Reykjavík, with on average
809 apartments rented out at any giv-
en moment, compared to 300 in 2015.
The money involved is astronomical,
with the bank estimating Airbnb prof-
its at 6.76 billion ISK in 2016—a third
of the profits made by the entire hotel
sector. These sums of money have not
gone unnoticed by investors and while
the number of apartments listed on
Airbnb rose by 509 in one year, only 399
new apartments were built in the city
to house locals.
Ari Skúlason, an economist with
the Economics Department at Lands-
bankinn says that the tourism indus-
try has had a measurable effect on real
estate in Reykjavík and that this brings
with it real risks.
“Tourism definitely has had an im-
pact on prices, just by the very prin-
ciple that if an apartment is taken out
of the general market and used for
renting short term, that pushes up de-
mand,” says Ari. The recent boom has
entangled the tourism industry with
the housing market in a way that has
created a serious predicament.
“As it stands, we are not worried
about the housing market bursting,
but the risk factors lie within the tour-
ism industry,” says Ari. “If we start
experiencing not just slower growth,
but an actual decrease in the number
of tourists, then many people who are
renting to tourists might be forced
to sell, which would lead to a drop in
prices. A lot of the new hotels are also
built in such a way that turning them
into apartments would be very diffi-
cult–should the need arise. It is a re-
mote possibility, but, if say, a natural
disaster, like an eruption in Katla, were
to break out and stop the influx of tour-
ists, then that could have serious con-
sequences.”
Priced out
The drastic increase in housing cost
and the decrease in availability has also
meant that living centrally has become
impossible for many young and lower
wage people. Figures from Statistics
Iceland show that the rate for a rental
apartment has increased by 60% in just
the last six years, with much of that in-
crease being driven by the downtown
market. Younger generations especial-
ly put great value on living close to cul-
ture and city life and, therefore, gravi-
tate towards 101. One of the people who
has felt the pain of booming prices is
musician Kristín Björk Kristjánsdóttir,
better known by her artist name, Kira
Kira.
“It was never cheap living down-
town, but you always managed,” says
Kristín. “But now, real estate com-
panies and wealthy individuals have
started misusing the Airbnb format by
buying entire apartment complexes,
and small apartments, that once were
perfect for people with typically low
wage professions, like artists, are now
rented out to tourists year round.”
Kristín has been without a home
since January and is very critical of the
way City Hall has handled the rapid
changes to tenants’ lot. She asks, “what
have authorities done to help people
who can’t pay 250,000 ISK a month in
rent?”
Dagur B. Eggertsson, from Sam-
fylkingin and the mayor of Reykjavík,
claims, however, that creating afford-
able housing for people like Kristín is a
central priority for the municipal gov-
ernment.
“Constructing apartments for low
income and young people centrally
is a downright priority in our hous-
ing policy and to achieve that we have
started cooperating with non-profit
rental organisations,” says Dagur. “We
want to greatly increase the number of
affordable apartments, social housing,
student apartments and rental apart-
ments in general to reach market equi-
librium.”
Out with the young and in with
the greed
While an increasing number of im-
migrants and sustainable birthrates
keep raising the population of Ice-
land, the number of inhabitants in
101 has actually decreased by 10%.
Benóný Ægisson, head of Íbúasamtök
Miðborgar Reykjavíkur, the residents’
organisation of downtown, says that
the decrease in the number of children
in the area has caused a drop in stu-
dents in the only elementary school in
the neighbourhood, and explains that
some kindergartens have had to shut
down whole departments.
“Young people can’t compete with
the prices that the lodging industry can
pay, so there is no renewal happening,”
says Benóný. Since 1989 he has lived
in his apartment on Skólavörðustígur.
Back then, he had neighbours in the
eight apartments surrounding his;
now he has none.
“You used to walk around greeting
dozens of people, but now you barely
look at people’s faces, as you prob-
ably don’t know anyone anyway,” says
Benóný. “It’s a lot of fun seeing life and
people on the streets, but the service
for those of us who live here is getting
worse and worse. There is no point in
opening up a store selling paint be-
cause it doesn’t cater to tourists. Inevi-
tably you get a more monotonous retail
environment.”
But Benóný doesn’t blame the tour-
ists—for him, the onus falls on Ice-
landers.
“I don’t see tourists as the enemy,
they are just travelling. Those who are
ruining things are those who, with
horrible greed, raise prices and profit
off of locals and visitors alike. We can
hardly afford to go out to eat anymore
and that is due to my wolfish country-
men.”
He says that municipal and national
authorities have not done their job in
regards to the citizens and that they
weren’t ready for the massive increase
in the number of foreign visitors. He
feels that the infrastructure needed to
receive the large number of people vis-
iting Iceland has not been in place, and
that there has been a lack of longterm
planning.
“People are very giddy over the pros-
pect of there being 3 million tourists
in Iceland, but what is the point if we
can’t even receive 1 million?” he says. “I
want to believe that the municipal au-
thorities can see that this can’t go on
anymore. If downtown is to maintain
any character, then we need to stop
the hotel development and find other
places where tourists can sleep.”
The flight of creativity
The change that 101 has been undergo-
ing is also having a significant impact
on the area's arts and culture scene.
Kristín claims that price increases
downtown are even forcing some cre-
ative people to leave the country for
“Let’s not get lost in
the negativity. Let’s be
fresh, positive, live well,
full on, and fuck your
puffin!”
“People are very giddy
over the prospect of
there being 3 million
tourists in Iceland,
but what is the point if
we can’t even receive 1
million?”
24 The Reykjavík Grapevine
Issue 15 — 2017
Kíra Kíra