Capital grants

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Reykjavík City provides capital grants for purchasing or building rental housing for families and individuals who fall below income and asset limits. The goal of awarding capital grants is to improve housing security in Reykjavík by increasing access to safe and appropriate residential housing for rent and helping ensure that housing costs align with tenants' ability to pay.

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About capital grants

These capital grants aim to help provide affordable rental housing in Reykjavík for those who need it, including students, youth, seniors, disabled people, and those unable to secure housing due to social conditions or serious financial hardship. These goals align well with Reykjavík City's Housing Policy and Housing Plan.

To achieve these goals, special emphasis will be placed on new construction and on expanding the availability of rental housing that meets the requirements of affordable rental housing laws and Reykjavík City's capital grant regulations.

Who can apply?

Capital grants may only be awarded to the following entities:

  • Housing non-profit organizations and legal entities that are entirely owned by Reykjavík City.
  • Legal entities that were operating before the affordable rental housing law took effect and met the requirements for loans from the Housing Financing Fund under the previous Article 37 of Act No. 44/1998 on Housing.
  • Other legal entities that the minister has authorized to receive capital grants, provided they are non-profit and this aligns with the purpose and goals of affordable rental housing laws.

Before you apply

Applicants for capital grants from Reykjavík City must have plans to build or purchase residential housing intended for tenants who fall below the income and asset limits specified in the Public Rental Dwellings Act. The plans must align with the goals of Reykjavík City's Housing Policy and be consistent with the city's Housing Plan regarding the ongoing need for and development of rental housing.

Application process

Reykjavík City reserves the right to meet with applicants and request additional documentation.

Application deadline

The application deadline for capital grants is March 18, 2024. Applications may be denied if required documentation is not received within the advertised application deadline.

The City Executive Council decides whether to approve or deny capital grant applications in accordance with Reykjavík City's capital grant regulations no later than 30 days after the application deadline passes. If a capital grant application is approved, Reykjavík City's capital grant is only awarded if the Housing and Construction Authority also approves a state capital grant within six months of the City Executive Council's approval.

Application evaluation

A special evaluation committee reviews capital grant applications and makes processing recommendations to the mayor. The evaluation committee may consult with professional experts from within and outside the City administration.

The City Executive Council confirms the awarding of individual capital grants, after receiving the evaluation committee's recommendations, pending budgetary authorization.

When processing applications

the following factors will be evaluated:

  • The application's compliance with legal provisions and regulations.
  • The project's adherence to budgetary authorization according to Reykjavík City's budget, and whether the impact of the grant on the City's operations, finances, and cash flow aligns with the plan's assumptions.
  • Whether the housing to be built or purchased is considered cost-effective and adequately meets residents' needs.
  • The need for rental housing of the proposed size and type in the specified neighborhood for the group it is intended to serve, considering the City's Housing Plan.
  • The alignment of the projected rent with the expected tenant group's ability to pay.
  • The security and adequacy of financing for project expenses, including for construction, operations, regular maintenance, renovations, and repayment of loans and capital grants.
  • The reliability and realism of available documentation, such as capital value projections, business plans, and projected rent, and whether these plans are likely to succeed so that the project achieves the purpose and goals of the law and Reykjavík City's Housing Plan.
  • The application's overall alignment with the purpose and goals of the law and Reykjavík City's Housing Plan.
  • Economic conditions and the impact of construction activity on the community and the economy may be considered.

Reykjavík City reserves the right to reject all applications.

More information about Reykjavík City capital grants is available through the email address stofnframlag@reykjavik.is.