A British tycoon accumulates land in East Iceland and eventually buys Grímsstaðir á Fjöllum, a large and unique settlement, that a Chinese mogul had previously put a lot of effort into acquiring. Around the same time, some of the best building land in the capital is sold for a pittance to a group of super-rich Icelanders. Residential land prices in Reykjavík double in a surprisingly short time.  

 
The land and the fishing grounds; the fishing industry and the dividends created by the nation's common resource have provoked fierce political conflict in Iceland, while debate about land is mainly limited to whether foreigners should be allowed to accumulate farms and homesteads and the scarcity of building plots as the prime cause of uncontrolled housing price increases in the capital. 
 
Equally the land under our feet ought to be a matter of great political interest. This is obviously true of the current housing crisis still in its infancy as inflation grows causing increased hardship and instability. As ever, the most vulnerable social groups suffer the most. From a social point of view, it is hard to exaggerate the destructive power of a housing crisis; land speculation causes housing bubbles with associated indebtedness and limits to individual freedom, fundamentally changes neighborhoods without the slightest regard to local interests and transfers assets into the hands of the few. 

Yet again, no one is responsible and fingers are pointed far and wide. 
 
Could it be that land ownership, its utilization and management is the biggest neglected issue in modern politics? Does land not shape our lives and our well-being in a much more influential way than we realize?  Here one can perhaps look at the housing crisis; the price of plots is obviously an influential factor in construction costs, and construction costs have a significant influence on housing prices, which in turn shapes rental prices, and what is called a housing market is created where these necessities are bought, sold and rented. Rises in the market have a direct effect on indices, and thus inflation and interest rates. The land itself; plots, their location and the administration associated with them thereby shape the livelihoods of the entire population. The land and its use, not least supply management and the distribution of limited resources, are, on closer inspection, a significant factor influencing growing financial and social inequality. The housing crisis is a manifestation of this state of affairs. 
 
The CEO of the Confederation of Icelandic Employers informs us that a foreseeable shortage of labor will require 15,000 foreigners to move to the country over the next four years. Where are these people supposed to live and what policy will be used as a basis for their residence? Should it be solved with “temporary housing” such as Höfðaborg (Cape Town), rows of substandard crummy apartments owned by the city, which while originally labeled as “temporary” stood for more than 30 years? Will container settlements become the modern-day equivalent of the rundown military barracks used for housing in Reykjavík after the Second World War? Are foreigners best kept in ghettos on the outskirts of the capital where land is available and construction can be carried out quickly and cheaply? Is that a good idea?

“I know from personal experience what it’s like to wrestle with vested interests in the Cabinet and municipalities when the rich come to distribute the silver,“ wrote Ögmundur Jónasson, a former Minister of the Interior, in an article published in the daily Morgunblaðið in 2020. 
 
The reason for Mr. Jónasson's remarks was a bill put forward by Prime Minister, Katrín Jakobsdóttir, amending various laws concerning the ownership and use of real estate (parties outside the European Economic Area, land register, disposition of land, increased transparency, etc.) which became law in July that year. This Act, no. 85 July 7, 2020, has its roots in discussions about the wealthy, foreigners and Icelanders alike, accumulating land, although the act also addresses other important and neglected factors, e.g. regarding registration and land use. Many Icelanders saw this act as a no-brainer seeing as more and more large swaths of land were picked up by a handful of rich people. The most notable one is the British tycoon James Ratcliffe who has purchased some of the best rivers for salmon fishing in the Northeastern part of Iceland. His grand scale investments have been likened with a gigantic vacuum cleaner hovering over the area. These purchases were reportedly for protective purposes, the salmon stock was in danger, you see. To help the salmon, Ratcliffe bought 1% of Iceland, more than 100,000 hectares. The share is much larger when you consider that privately owned land makes up slightly more than half of Iceland and only about a quarter of Iceland is considered lowland i.e. below 300 meters above sea level. 

According to Icelandic law, the owner can make use of his land e.g. natural resources such as freshwater, waterfalls, geothermal energy, minerals and fishing, and thus water rights, geothermal rights, fishing rights and mining rights. Salmon fishing rivers can yield good dividends so it’s perhaps not surprising that doubts have been expressed that a businessman known as a rough and tough customer has decided to invest large sums of money due to his love of nature and the environment.  Reports that fishing lodges are under construction on many of the mogul's river banks may support that view. In September 2021, Mr. Ratcliffe announced that he had stopped accumulating land in Iceland stating that he had no interest in breaking the law or upsetting the nation. 

 
Ögmundur Jónasson has been the most vocal of Icelandic politicians in criticizing huge accumulation of land by foreign citizens. As Minister of the Interior, Jónasson tried to restrict such land collection, e.g. with a directive and a bill which made the purchase of land by foreigners subject to Ministry of the Interior approval.  Jónasson has also revealed bitter disputes within then Prime Minister Jóhanna Sigurðardóttir’s government when he objected to the Chinese tycoon Huan Nubo, (referred to by then president of Iceland as "the excellent Chinese") being granted an exemption to buy the Grímsstaðir á Fjöllum settlement. In the end, Jónasson’s efforts to curb the accumulation of land by the super-rich were in vain as his successor in the ministry abolished the restrictive regulations he had issued. Land accumulation returned to full swing 

Ögmundur Jónasson has been critical of the aforementioned amendment to the law at the initiative of Prime Minister Jakobsdóttir and has expressed his opinion that it is seriously flawed. He insists that the law will not stop rich foreigners in accumulating land. In a June 2020 article in Morgunblaðið, Jónasson stated that the political goal implied in the Prime Minister's bill i.e. "a decisive restriction on the ownership of land by the rich" had not been fulfilled. 
 
Jónasson acknowledges there are certain restrictions on ownership according to the act. However, he points out that limits with regard to the size of properties foreigners can buy in Iceland are not likely to ever come in play. The Minister's authority to reject the accumulation of assets is subject to the buyer in question owning 10,000 hectares or more of Icelandic land. Furthermore, the law is by no means unequivocal in such a case, as it is stated that further purchases shall then "as a rule" be rejected. Moreover, this article of law is not exclusive either, as it stipulates that these restrictions can be circumvented if the buyer can argue "that he needs more land due to the planned use of real estate". Icelanders are, Jónasson maintains, familiar with "magnificent plans for the protection of salmon stocks and human life in the country's settlements" having required such large scale transfer of land to one owner. To give an idea of just how colossal 10,000 hectares are Jónasson points out that medium-sized farms in Eyjafjörður and in the south of Iceland are between two and four hundred hectares.

Circumstances do vary from country to country, but in recent years a lively debate has taken place in some of Iceland's neighboring states about land as a public good and an influence in societal development. Examples of this include Norway and Scotland. In 2019, a report prepared by six experts and journalist George Monbiot for the British Labor Party was published. The report dealing with the use, ownership and administration of land in the UK is called Land for the Many: Changing the way our fundamental asset is used, owned and governed. 
 
The authors claim that a small group of people have managed to overtake the land and its administration in the UK. The result, they say, is a huge increase in inequality and exclusion, manifested by enormous cost of buying or renting housing, natural disasters, recurring economic crises and the loss of public space. Yet for 70 years this crucial issue has scarcely featured in political discussions in the UK. Since 1995, land prices have more than quadrupled in the UK.  Land now accounts for 70% of the price for homes.  This is a direct consequence of the government's policy of giving free rein to capital, which has led to land being turned into a speculative money machine. Farmers' land is multiplied in value on receiving planning permission harming British agriculture and causing urban sprawl.  

This system is not capable of ensuring the use of land needed in the UK. The rich are made richer while plots of land, much needed by the vast majority of Britons are not available. Municipalities no longer control land use, that power has been handed over to greedy contractors. Speculation is more important than the needs of the people. The UK construction industry is incapable of building well, fast and cheap. In many cases, this arrangement results in housing that is not in line with the needs of the population. Contractors have no obligations vis –a- vis the public, they only think of creating dividends for the shareholders of construction companies, resulting in projects solely focused on financial benefit. 
 
The report’s authors state that this can only be reversed with a new model for the construction industry with planning management being transferred back to democratically responsible authorities whose sole purpose is to serve the public interest. This should be done in close cooperation with municipalities, local residents, landowners and other stakeholders. Local authorities should also be empowered to lead local development. They should set housing targets based on the type, size and tenure that local people need and can afford. 

 
The authors recommend that a Labour government should set an explicit goal to stabilize house prices, so that wages can catch up and the house price-to-income ratio can gradually fall. This calls for a bold strategy that i.a. will involve intervention in the rental market and direct measures to curb speculative demand. Twenty years ago, the average working family needed to save for three years to afford a deposit. Today, it must save for no less than 19 years. Housing costs swallow 36% of average household incomes for British renters.  

Here an interesting Icelandic comparison can be made. About one-tenth of all tenants in the country spend more than 70% of their disposable income on rent, and more than a quarter of tenants have to pay more than half of their income, according to a 2021 report by the Housing and Construction Authority. For many years the typical rent to disposable income ratio averaged around 40%, according to the same source. In 2021, it had risen to 45%. 
 
According to World Economic Forum data (June 2021) rents have risen sharply in the European Union (EU) in the past ten years. In 2018, it was common for the average family to pay about 25% of  income in rent, while younger families paid up to a third. Households in the two lowest-income tithes paid about 40% of disposable income. This proportion, 40%, is often used as a definition of overburdening housing costs.

In an informative 2019 report on the housing market, Icelandic bank Íslandsbanki states that the building index, which measures changes in the cost of building housing in the capital area, has risen by 26% since 2012. The report states: “The building index tells only half the story. According to the Confederation of Icelandic Industries and [Icelandic Consulting firm] Hannarr the actual building cost is only about half of the construction cost. Other factors that form construction prices are plot prices, financing costs, design costs as well as other costs. This cost is not included in Statistics Iceland's building index. It is difficult to obtain data on plot prices, design costs and other costs, which makes a comprehensive analysis of total construction costs more difficult than otherwise. The development of all these factors forms the basis for the final purchase price of apartments and helps to understand the price development in the housing market. Better access to data on total construction costs would be beneficial for market analysis." 
 
In a February 2022 news item Icelandic daily Morgunblaðið claims that the price of plots in Reykjavík has doubled, at least, in two years and the common price per square meter is between 100-120 thousand ISK. The paper puts this information in context with agreements between the Reykjavík City Council and Icelandic oil companies regarding a number of plots currently used for petrol stations. The plan is to change these plots into mixed residential and commercial areas. The paper says that due to ever-increasing land prices in Reykjavík these plots of land will be of enormous value to the oil companies.  
 
Representatives of the Reykjavík City Council have called for minutes from the city's negotiating committee to be published. According to Mayor Dagur B. Eggertsson the committee has since 2019 had more than 60 meetings with representatives of the oil companies.    

Morgunblaðið further states that secrecy surrounds the meetings with representatives of the oil companies and the agreements concluded. However, elected representatives have been allowed to visit a closed data room in Reykjavík City Hall and browse through available information on a tablet housed there. The paper says that according to sources, there is little in terms of information to be found on the tablet and that it is impossible to ascertain the goals and negotiating progress involving publicly owned land worth billions of ISK being turned over to oil companies. 
 
The lack of transparency and access to data on land prices and thus construction costs manifested in the Íslandsbanki report and Morgunblaðið news item is in line with the report on land prepared for the British Labour Party.  Increased transparency is highly emphasized in the report. The authors maintain that all information about land ownership, control, subsidies and planning should be published as open data. There should be free and open access to information on who owns land, including the identities of the beneficial owners. 

 
Local Authority Asset Registers and sales should be published as open data. There should also be a full register of planning permissions, including developers’ commitments. 

The authors propose measures to counteract the approach that land and residential housing are primarily of financial value. They recommend major reforms of the private rented sector. They argue tenancies should be open-ended, and landlords should lose their power to evict a tenant who has not broken the terms of the tenancy agreement for the first three years of the tenancy agreement, and should have to provide grounds for eviction after that point. There should be a cap on annual permissible rent increases, at no more than the rate of wage inflation or consumer price inflation (whichever is lower). Buy-to-let mortgages should be more firmly regulated and restricted.  

  
The authors consider it important that the planning system be reformed to address imbalances of power, which currently allow deep-pocketed developers excessive influence over local decision-making (cf. Ögmundur Jónasson's comments on the rich and their silver). Among the measures recommended are permitting local authorities to set and vary planning fees: for example, increasing them for applications raised more than once, or when advice or policy has been ignored. 

The land and its use is a matter of great interest to the public. There is reason to assume, as, indeed, stated in this article, that the public interest is not guarded in fundamental ways with regard to the land and its use.  Information on land, its utilization and trade is systematically kept from the people who fund the system and have entrusted elected representatives to  administer this limited resource for the general good of society.  Transparency is lacking in fundamental areas and there is a high risk of corruption and fraud, a fact known and recognized in most Western states. 
 
The current Icelandic housing crisis is a manifestation of the prevailing system; the interests of capital shape the land and its use, leading to exclusion of the poor and other vulnerable groups, long-term indebtedness and enormous housing costs for the middle class, wealth accumulation by the rich, growing inequality and, eventually, social disruption.