Airbnb promotes social inequality in Iceland, finds new research

Over 60% of registered Airbnb owners, in the capital region of Iceland, are concentrated in the central streets of Reykjavik, according to a new research study, with a key finding showing that a high concentration of Airbnb, and short-term leases, encourage social inequality. The impact study, published on 3 May 2019, was carried out by researchers at Sorbonne University in France, in partnership with the Icelandic Tourism Board, the City of Reykjavikand the Housing Fund. Central Reykjavik streets that have the most Airbnb properties listed are Laugavegur, Hverfisgata, Grettisgata, Berþórugata, Odinsgata and Bjarnarstígur. Up to 70% of the properties on several of these streets are listed on Airbnb. 

In recent years, Reykjavik has seen a booming tourism industry, including the growth in Airbnb. The study highlights, that whilst an Airbnb business can create financial benefits for those who already own property to rent out, those, on the other hand, looking to rent or purchase properties, face lower supply levels, higher prices, and more social inequalities. 

The research, had 4 key aims: 

• Providing an updated overview of the Airbnb supply in Reykjavik;
• Understanding who the Airbnb hosts were;
• Understanding the reasons that drive local people to participate in Airbnb; and
• Providing a clearer appraisal of the impact of Airbnb on local communities and the housing market. 

The study used a mixture of qualitative and quantitative research methods. For example, quantitative data, from 2016-2018, was analysed from databases of the Airbnb supply in the Reykjavik capital, and data on the real estate market. Further, qualitative data was also analysed from 33 interviews with Airbnb hosts, 20 interviews with people who had to move out of Reykjavik because of Airbnb, and a further 27 interviews with experts in the field were carried out. 

Further reading 

• Sorbonne University (April 2019) Research Project: Airbnb and the Housing Market in Reykjavik. Presentation slides; click here.
• News article: Up to 70% of apartments on some streets on Airbnb rent. Kjarninn (3 May 2019); click here for translated article.