Hallar

Development of new mixed residential neighborhoods in Hallar is now underway to bolster the Grafarholt-Úlfarsárdalur district in eastern Reykjavík. The development aims to strengthen the housing market and ensure efficient land use through diverse, mixed-use development with strong public transit links and access to the area's natural resources.

Market survey

Reykjavík City is currently exploring market interest, capacity and perspectives for the planned development of a new residential neighborhood in Hallar in Úlfarsárdalur, with special focus on comprehensive development of residential housing, infrastructure, financing and partnership arrangements.

Working group

In late November 2025, the City appointed a working group to begin preparations for a partnership with an infrastructure company to develop a new residential neighborhood in Hallar. Partner selection will follow Article 37 of Act No. 120/2016 on competitive negotiations.

 

The selected partner will participate in developing the new residential neighborhood according to goals and conditions set by city authorities, construct specified basic infrastructure and community facilities, in exchange for the sale of a specified amount of development rights through an open and transparent process to builders in the general market. Preparation will happen alongside the creation of a master plan amendment and framework plan draft.

Terms of reference for the current working group
Illustration of mixed residential and commercial property

Aerial photographs and diagrams

Bolstering the existing community

Planning a new school district in the Hallar area will help enhance the Grafarholt-Úlfarsárdalur district as a cohesive community, building on significant prior investments in local cultural institutions and sports facilities. In addition, the project will expand local retail and other services. The new neighborhoods in and around Hallar are intended to support the area's existing infrastructure and community.

Furthermore, constructing new residential neighborhoods in Úlfarsárdalur is key to bolstering the housing market in Reykjavík and the capital area, helping to ensure a larger and more stable supply of homes as outlined in the Housing Plan 2025-2034.

Changes to Reykjavík Municipal Plan 2040 affecting land use and development in Hallar in Úlfarsárdalur were introduced in the Urban Planning Portal at the end of 2025.

Public transportation development

Robust public transportation is essential for building new, environmentally friendly, and cost-effective urban neighborhoods in the area. This infrastructure is also vital for any future growth in Úlfarsárdalur. Upgrading the main and connecting routes to the area, as outlined in the Reykjavík Municipal Plan 2040, is another necessary step to accommodate a significant increase in residential units—first in Hallar and later potentially in the inner valley.