Iceland Mag

6 Reykjavik

Iceland Mag


Growing numbers of Airbnbs and guesthouses cause an acute housing shortage in the town of Höfn

By Staff

  • A small fishing town transformed by tourism Local residents and people who want to move to Höfn in South Iceland are losing out to travellers in the competition for housing. Photo/Gunnþóra

Inhabitants in the village of Höfn in South Iceland are finding it increasingly harder to secure affordable housing, due to the growing demand from foreign visitors. According to the Icelandic National Broadcasting Service RÚV the village is facing an acute housing shortage, prompting local authorities to construct three new apartment buildings.

The municipality of Hornafjörður, which covers the town of Höfn as well as the surrounding countryside, has just about 2,100 inhabitants. Until recently the town has relied on fisheries and providing services to nearby farmers, but the growing tourism has begun to change the face of the town. According to a count by town authorities 22 apartments have been transformed into guesthouses or rental properties for foreign travellers. However, no new homes have been built for a number of years. This means new inhabitants are unable to find any housing in the town, causing problems for the local employers.

Read more: Hotel construction boom threatens to exacerbate shortage of new housing

The municipal government has tried to induce developers to build new homes, offering free land and waiving all fees, but to no avail. Developers have been unwilling to build new homes in the town. To solve the housing shortage the town will therefore be building two or three small apartment buildings with 10-15 apartments.

The mayor of Hornafjörður municipality told RÚV the municipality was forced to enter the construction market itself to solve a pressing problem: “People who have secured good jobs in the town, and want to move here have been unable to find housing, forcing them to decline the job offers. So, we have been losing new inhabitants due to this, and we are therefore not growing as we would otherwise be doing.


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