March 5, 2026
The Icelandic rental market is not an afterthought or a patch on the housing market. Many Efling members are in the rental market for the long term, and the problems of the rental market will not be solved by simply hoping that tenants will move into owner-occupied housing. This is the content of a resolution adopted at Efling Parliament on February 27, which calls for fundamental reforms to the Icelandic rental market. The resolution lists Efling union's ten demands for the Icelandic government to address the major problems in the rental market. The main demands include: Establish laws and regulations that limit sudden rent increases, support long-term contracts, and reward reliable tenants. Ensure regular inspections of rental housing to assess the condition and fair price. Lease agreements shall be in Icelandic krónur. Rent benefits shall be individualized, based on each tenant's income. Databases of tenants and landlords shall be established to promote transparency. Large-scale short-term rentals for tourists must be limited. The supply of rental housing must be greatly increased and the role of non-profit rental companies in such development must be ensured. A housing company for workers should then be established where it would be possible to acquire apartments through lease purchase. The resolution follows in its entirety below. Renting Icelandic authorities must face the fact that the rental market is not an afterthought or a band-aid on the Icelandic housing market. Numerous Efling members are in the rental market for the long term and have to rely on a rental agreement as a lifeline in their existence. The problems of the rental market will not be solved by simply hoping that tenants will move into owner-occupied housing. In a healthy housing market, people can choose between acquiring affordable housing or renting safely and economically. A humane, regulated and stable rental market needs to be established that is a viable alternative for working people, similar to that seen in our neighboring countries. Efling members make the following demands of the Icelandic government regarding the rental market: Far from enough has been done to curb the powers of landlords to make the existence of tenants a game. Laws and regulations need to be established that ensure fair and reliable restrictions on rent increases, encourage long-term contracts and reward reliable tenants who meet all the conditions of the lease. It must be ensured that the relevant authorities (e.g. HMS) can carry out inspections according to the powers that must be implemented to ensure that these regulations and laws are respected. Regular inspections of rental housing, for example every two years, need to be carried out so that the condition can be assessed, a fair market price can be determined and quality, safety and transparency in the rental market can be ensured. Lease agreements should be made in Icelandic krónur, not in foreign currencies. Landlords should be responsible for ensuring that the registration of tenants living in rental housing is accurate and up-to-date. Housing benefits should be calculated individually, based on each tenant’s personal income, rather than on joint income. Such an approach would be more consistent with Article 76 of the Icelandic Constitution, which guarantees individual rights to social assistance. It is also important to set up a database of tenants and landlords. Access to such information contributes to a healthy rental market by increasing trust and transparency in the process for both parties. In addition, access to an independent party that both tenants and landlords can turn to must be ensured, to record and preserve images of the condition of the apartment before and after the rental. Such registration can be used as impartial evidence and contribute to a fair settlement of the security deposit/deposit at the end of the rental period. The scourge of short-term rental of residential property for tourists needs to be tackled much more severely. Renting out a home for a short period of time within a year can be considered a secondary occupation for families. But this should not be a large-scale industry for investors and hustlers that sells off a significant portion of the residential property that the people of the country need to be able to live a safe and normal life. The supply of rental housing needs to be increased, as part of a more extensive, funded and timed housing plan by the government, prepared according to reliable forecasts and in consultation with the municipalities. The role of non-profit rental companies in this development needs to be secured, for example through Bjarg, which has proven its value as a concise resource for people on lower wages. A housing company for workers should also be established where there is a possibility of acquiring the apartments through rental.