Félagsbústaðir to build 3000 apartments

The Socialists want Félagsbústaðir to build three thousand new apartments as soon as possible.

Firstly, Félagsbústaðir can afford this

Félagsbústaðir's equity was ISK 67.3 billion at the end of last year. That is more than 53% of the company's assets, ISK 29.4 billion more than can be considered necessary. Real estate companies on the market, Reitir, Reginn, and Eik, have an equity ratio of about 30%. Félagsbústaðir's equity beyond these limits could therefore support the construction of apartments for almost ISK 100 billion. With that power, it would be possible to build 3000 apartments without any difficulty.

Secondly, Félagsbústaðir can finance the construction of the apartments

Félagsbústaðir's bond offerings have been successful, as the company enjoys the guarantee of the city treasury and also has excellent collateral. There is no better collateral than apartments for low-income people. And various other financing options are open to Félagsbústaðir. Reykjavík City should advocate for loans for general housing to be for a longer period than 50 years, as current laws have such a limitation. With longer-term loans, rent at Félagsbústaðir can be significantly reduced.

Thirdly, the city itself can build the apartments

Reykjavík City owns plots of land and owns Félagsbústaðir, which has the financial capacity for housing construction. The city therefore does not need to wait for anything, not to wait for contractors to build apartments to be able to buy them with a generous markup. Reykjavík City can build these apartments itself, establishing the Reykjavík Construction Company, as the Socialist Party of Iceland (Sósíalistaflokkur Íslands) has proposed.

Fourthly, there is a need for 3000 apartments

A large number of families and individuals are stuck in an unregulated rental market, paying excessively high rents that push these people into poverty. Waiting lists for Félagsbústaðir apartments only tell half the story, and barely that. The conditions for getting an apartment from Félagsbústaðir are very strict. It is not enough for people to be poor; they must have experienced trauma, be ill, or otherwise be in a difficult situation beyond having low incomes and having to pay exorbitantly high rents.

Fifthly, this will ensure social mixing within Félagsbústaðir

City authorities have feared that rapid development of social housing could lead to insufficient social mixing in neighborhoods, with too many poor people living in too small an area. This attitude is characterized by antipathy towards the poor. City authorities have no concerns about insufficient social mixing in the wealthy blocks on Skúlagata. But by increasing the number of general apartments within Félagsbústaðir from just over two thousand to just over five thousand, the conditions for getting an apartment will be lowered, and the residents will automatically become more mixed, coming from more diverse groups.

Sixthly, the development will ensure social mixing in the city

A major effort is needed to ensure social mixing in the city's neighborhoods. For example, there is far too little social housing in Melar and Hagar, in Fossvogur, in Laugarás, and elsewhere. By building 3000 new apartments throughout the city, but especially where there are few such apartments already, better social mixing in the city can be ensured, making its neighborhoods more diverse and democratic.

Seventhly, this will make the city better

The housing crisis is the unique phenomenon that has had the worst impact on living standards in the city. It is therefore a priority to address its roots. And the roots lie in the housing problems of low-income people. That is where the greatest pain is. The best way to solve the housing crisis is to build for the people with the greatest housing problems.

This is the Socialist Party's proposal for the municipal elections on May 14, that Félagsbústaðir build 3000 new apartments. The Socialist Party trusts that city residents will choose the best solution, the most sensible and just one. That is why they put forward such proposals.