Complaints over Apartment Rentals to Tourists

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Complaints over Apartment Rentals to Tourists

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Photo: Páll Stefánsson.

An increasing number of tourists in Iceland has prompted the growing popularity of air bed & breakfasts and short-term rentals by real estate companies. Sigurður Helgi Guðjónsson, the chairman of the Homeowner’s Association, said in an interview with ruv.is that the association has received multiple complaints and inquiries in regards to the renting of apartments in apartment complexes to tourists.

One case he mentions is a complaint sent in by a man living in an apartment complex: “There was regular family life in the complex, and normal families, and now he’s there alone with the other three apartments in short-term rental, with all the disturbance and inconvenience attached to that,” Sigurður Helgi said. 

Despite the murkiness of the law, in light of unprecedented changes due to increased tourism, Sigurður Helgi said that laws on apartment complexes in general are sufficient to address these issues, and that their review is not necessary.

In 2012, the Appeals Board for Housing, an agency under the Ministry of Welfare, ruled in favor of a plaintiff who wanted to rent out his apartment periodically, in opposition to the will of his neighbors who claimed that rules governing apartment complexes required the signature of all inhabitants for such practice to be legal. In the ruling, however, precedent was not definitively established, and the board has previously ruled against those wanting to utilize their homes for this purpose, for instance in one case where four apartments with a single owner in a complex of eight were repurposed as a bed and breakfast. 

Baldvin Baldvinsson, the owner of Iceland Summer, which rents out apartments in Reykjavík, Höfn and Akureyri on behalf of their owners, disagrees with Sigurður Helgi’s assessment. “Before we started our business five years ago we went through all rules and regulations concerning the renting of apartments in Iceland. That’s when we saw just how old-fashioned and out of sync with our times they are ... The laws must be adjusted so that things will work out better for everyone,” he said in an interview with mbl.is

Baldvin believes that the majority of tourists are not a disturbance to neighbors, if anything less so than long-term occupants. “I have talked to many of those who rent out apartments. It is nice to be able to say that neighbors who were scared of the renting to begin with have been pleasantly surprised. It appears that there is much less disturbance from tourists than families. Regular families can bring with them issues such as uncleanliness, bad conduct, smoking, partying and much wear and tear of the house. Tourists leave early in the morning and are away all day. I would guess that disturbance of neighbors is only the case for about 1 percent of tourists,” he said

The complaints recorded by Sigurður Helgi are only part of the larger, on-going housing crisis in Reykjavík, where increasing tourism plays a part in the lack of affordable housing.

Ingibjörg Þórðardóttir, chair of the Realtor’s Association, claimed in a recent interview with Morgunblaðið, that increasing real estate and rental prices in the center of Reykjavík, as well as in nearby neighborhoods such as Hlíðar and Norðurmýri, are directly caused by short-term rental to tourists.

“As the number of tourists increases we can start looking to compare ourselves to other Nordic capitals, such as Copenhagen, where it is very expensive to buy and rent housing in the downtown area. These areas [of downtown Reykjavík] are becoming more metropolitan. There are very few apartments available downtown that are less than 90m2 in size,” says Ingibjörg.

Baldvin agrees with this sentiment, but believes it better to embrace it. This change is here to stay.

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