News - 12.05.2026

The Lost Election Issue

On Saturday, voters across the country will head to the polls in municipal elections, and political parties are now competing for people’s attention both offline and on social media. In the midst of such activity, policy issues sometimes take a back seat, and this time there is uncomfortably little substantive discussion about one of the municipalities’ most important responsibilities: housing. Housing has a fundamental impact on people’s quality of life and living conditions and has been the main driver of inflation. Housing issues therefore affect the entire economy, not only today but also in the future. Inaction today is the inflation of tomorrow.

Municipalities hold planning authority. Local councils have significant control over where construction takes place, what types of housing are built, and when. It is therefore in their hands to ensure a sufficient supply of diverse, development-ready plots and planning that meets the needs of society. Much has been lacking in this regard when it comes to creating stability in housing development. Plots are delivered too slowly and inefficiently, and delays together with steadily increasing municipal charges have significantly contributed to rising housing prices.

At a well-attended VR and SI conference on housing issues last February, a clear demand emerged for the state and municipalities to join forces around a long-term vision for housing policy. Municipal planning processes faced considerable criticism at the conference, and there are numerous opportunities for improvement that could accelerate development and help ensure a sufficient and appropriate housing supply. However, the meeting also revealed an understanding of the challenges municipalities face in building infrastructure in new neighbourhoods. Municipalities must nevertheless have a clear vision for this policy area. How do they intend to organise development in the future? Will there be a sufficient supply of plots, and what will the framework for municipal charges look like? Will the construction of infrastructure be paid for entirely by residents of new neighbourhoods? How will planning be ensured to meet the needs of society? These are all questions that require well-considered answers and could have a major impact on public quality of life, inflation developments, and the strength of the economy in the coming years.

Although there are differing views on individual measures to address the housing crisis, there is broad agreement that inaction is not an option. We call on parties running in municipal elections to clarify their plans regarding housing issues. Housing issues are far too important to be lost amid colourful election campaigns. It is both necessary and possible to bring stability to the housing market. We urge those elected to local councils across the country to work towards that goal.

Now is the time to demand a realistic vision and accountability in housing policy before the votes are cast. When one of the biggest issues affecting household interests is at stake, voters are entitled to clear answers now, not after the elections.

Halla Gunnarsdóttir, Leader of VR 
Sigurður Hannesson, Managing Director of SI

The article was first published on visir.is on May 12, 2026.