Socialists want the city to establish a housing association

The Socialist Party of Iceland's platform wants Reykjavíkurborg to establish its own housing association, which would build apartments for those people who are in the most difficulty.

"The public cannot pay the rich profit from all stages of apartment construction," says Sanna Magdalena Mörtudóttir, the leader of the socialists in Reykjavík. "As the situation is today, we have to pay the land speculator their profit, the owners of the building material store their profit, the contractor their markup, and the owners of the rental company their dividends. This is on top of all the interest we ultimately pay, the interest on our loans and the loans that companies take. Poor families, low-wage earners, pensioners, disabled people, and other people who are in housing difficulties cannot afford all of this."

Since the Crash, the housing crisis in Reykjavík has undermined the living standards of the worst off. The small wage increases that low-wage earners and pensioners have received have gone into higher tax payments on the one hand and higher housing costs on the other.

"We are squeezed between low wages and exorbitant rent," says Daníel Örn Arnarson, a worker and the second person on the socialists' list. Daníel took a seat on the board of Efling this winter after a historic election victory. "The housing system is built up so that a few parties can profit as much as possible: Land speculators, building material companies, contractors, rental companies. The worst off cannot support the rich. They must find another source of income than the housing crisis of low-wage earners."

The socialists' idea is that Reykjavíkurborg itself establishes a construction company, which would itself import the building materials, itself build the houses on city land, and itself rent out the apartments. Socialists want a housing system to be built up that is completely isolated from profit-making companies.

"We have waited for years for the so-called market to solve the housing problem. That has not happened and will never happen," says Sanna. "The market is about bringing the most profit to company owners. Not about solving people's housing problems. Despite the housing crisis undermining the living standards of the worse off, the market has built nothing but overly expensive housing, mostly luxury apartments and hotels."

Socialists point to history for precedents. Reykjavík residents established Bæjarútgerð Reykjavíkur to provide people with secure jobs after the war. Throughout the country, municipal fisheries and cooperative companies brought fishing and processing into the modern era and ensured people secure jobs. Previously, fishermen and workers were at the mercy of the rich, getting or losing jobs depending on how the rich believed they could profit the most. During the neoliberal years, the municipal fisheries and cooperative societies were sold off at fire-sale prices to the rich, like other public assets. Since then, fishermen and workers have lived with insecurity. Fishing magnates have pulled the rug out from under the living conditions of the public in one fishing village after another.

"Capitalism is the main adversary of the public," says Sanna. "The rich will never solve the housing problems of the poor. They have no interest in that. The rich just want to profit as much as possible. It is absurd that city authorities make capitalism their main ally in housing matters."

The socialists' platform in Reykjavík wants the city to lead the development of a new housing system that is completely protected from profit-making companies. Reykjavíkurborg itself needs to build houses and rent out apartments at the same time as the city encourages the development of housing associations by the labor movement and other parties. But the problem will not be solved by others. The city itself needs to step in and tackle the problem.

"There is no shortage of luxury apartments," says Daníel. "Reykjavíkurborg should stop serving land speculators, contractors, and rental companies. Reykjavíkurborg should turn its attention to solving people's housing problems, and first those who are in the most difficulty. And the city should build until the last family is sheltered."

But can Reykjavíkurborg afford this?

"Can we afford to support the contractors and rental companies?" asks Sanna in return. "The worse off already bear an enormous cost from the housing crisis. We want to reduce that cost."

"Reykjavíkurborg managed to build up the District Heating System, replace oil and coal heating, and put hot water in every house," points out Daníel. "If the market had been allowed to dictate, we would still be heating houses with coal. And a coal company owned by Gamma would likely be setting records in dividend payments after a cold winter and paying top executives fat bonuses."