ABSTRACT
This chapter focuses at current housing developments in Reykjavík, Iceland's capital city, in light of recent economic developments, housing policy, and latest trends in urban planning. Phantom suburbs with streets and infrastructure, but few if any houses, are a new phenomenon in the urban landscape of Reykjavík, Iceland. This is a result of a mismatch between the supply and demand for housing which can be contributed to the swift changes in economic conditions related to the housing boom of the years 2004 to 2007 and the following economic slowdown. During the rapid economic growth between 2003 and 2007 in Iceland the building sector boomed and great plans were made for supplying the rapidly growing nation with high quality housing. In many cases the neighbourhoods originally planned were, during development and construction, adapted to the changing norms during the optimism of the boom years. The Icelandic housing market experienced the largest swing on record during the recent boom-bust cycle.
