Ari Edwald says Reykjavik fees reach ISK 24 million per home

Fees on a 60-square-metre home in Reykjavik can reach ISK 24 million before construction begins, according to city council member Ari Edwald, mbl.is reported. He says the city’s planning policy and charges are driving up housing prices and pushing people out of the private housing market.

Edwald said building-rights, infrastructure and road-construction charges, including interest, can exceed ISK 400,000 per square metre of housing. At that rate, the fees for a 60-square-metre apartment would total ISK 24 million, he said, asking how affordable housing could be built under those conditions.

Edwald said the effects include people moving to other municipalities and growing demand for social housing. He pointed to families with children moving to communities such as Reykjanesbær, Ölfus and Akranes. In his view, the city should change its policy, lower costs and make it possible to build cheaper homes rather than make home ownership harder and then address the consequences through social support.

He also criticised the valuation of properties owned by Félagsbústaðir, a housing company. Edwald said the properties are not for sale and bring in less rent than comparable homes on the private market, and argued that their valuations should reflect this. He cited the company’s figure that rents are generally 33.6% below market levels.

Edwald said his criticism remained valid despite a change in the city’s governing majority, adding that the figures were still being “dressed up beyond what is warranted”. He made the comments as a guest on mbl.is’s Dagmál programme, where he also discussed Reykjavik’s finances and housing policy.