Reykjavík planning official backs hotel apartment plans

Reykjavík’s planning official has reversed an earlier position on plans to create hotel apartments at Bergstaðastræti 4, mbl.is reports. A corrected opinion was submitted at a recent meeting, removing the obstacle to the plans.

The building stands at the corner of Bergstaðastræti and Skólavörðustígur in central Reykjavík. Shops have operated on the ground floor for years; a bag and glove shop was previously located there, while the premises now house a 66°North store.

The building’s owner, Gamma ehf., applied to convert four apartments on the second and third floors into hotel apartments. The planning official rejected the request in an opinion issued in November last year, but took a different position in a new opinion dated 11 August 2026.

The opinion states that the clear wording of Reykjavík’s 2040 master plan, the basis for a 2014 amendment to the plan, the objectives of a 2017 amendment and general rules against the retroactive application of burdensome administrative regulations provide sufficient grounds to issue a positive opinion on an application for an operating licence for accommodation activity in categories II to IV, where the existing operation in the same building remains unchanged.

A second building farther down Bergstaðastræti has the same street number and has also been the subject of plans by Gamma ehf. In 2023, Reykjavík’s planning official rejected the owners’ request to demolish it and replace it with a four-storey building.

The building has housed various businesses over the years, including a goldsmith’s workshop, a fashion store and restaurants. The owners submitted a condition report from engineering firm Efla stating that the building was beyond repair. Demolition was rejected because the building is protected for its age and a four-storey replacement would disrupt the historic streetscape and settlement pattern.