Iceland Mag

8 Reykjavik

Iceland Mag

Economy

An Airbnb ban in the village of Vík in South Iceland

By Staff

  • Village of Vík The pictoresque village in South Iceland has experienced both the benefits and downside of a booming tourism industry. On the one hand more jobs and a more vibrant community, on the other an Airbnb driven housing shortage. Photo/Heiða.

The municipal authorities in Mýrdalshreppur in South Iceland have decided to ban all short term rentals in the municipality, which includes the village of Vík. The ban is a response to a massive increase in Airbnb’s in the village.

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

The mayor explained to the local radio station Bylgjan that the inhabitants of Vík wanted to live in a regular community, rather than inside a tourist attraction. The village should be home to the people of the village, not an overnight stopover destination for travellers:

“We want to live in a regular traditional community, where people live, a community where people live and prosper, pay their taxes and takes care of their civil responsibilities. There is a housing shortage in the village and we are facing major problems due to that.”

According to the local newspaper Morgunblaðið the village of Vík has been growing rapidly, thanks in large part due to the tourism industry. The number of inhabitants grew by 12% in 2015. Currently the village has 540 inhabitants. However, it also has the highest ratio of hotel rooms to inhabitants in Iceland. When all registered accommodation is fully booked the town has at least 1,300 travellers spending the night.

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

According to the ban no new permits for home-accommodation will be granted. People will still be allowed to rent out individual rooms in their own homes, but renting out entire apartments will be banned. The mayor argues that in recent years more and more people had converted their homes into short-term rental apartments for foreign visitors, and investors had been buying up apartments and houses in order to transform them into Airbnb’s.

The mayor stressed in an interview with Bylgjan that he, or other inhabitants of the village were not opposed to tourism. “We wouldn’t have a small village teeming with restaurants and cafés if we didn’t have the tourism industry.” But there had to be room for the residents as well. Banning short term rentals, which had exacerbated a housing shortage in the village, was necessary to ensure people who actually want to live in Vík could find a place to stay.

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