When banks in Iceland filed for bankruptcy in October and credit lines dried up, Iceland’s building industry went into a tailspin: Contractors halted construction, developers cancelled new projects, and thousands of foreign construction workers left the country almost immediately.
Next to fall victim were architects. As construction ceased, architecture firms saw an almost complete drop-off in new projects. By the beginning of November, architecture firms across the country announced massive layoffs. As of February 1 of this year after a three-month grace period, an estimated 90 percent of Icelandic architects became unemployed.
The past ten years in Iceland have seen unprecedented residential and commercial real estate development. Inflated interest rates in Icelandic banks attracted large sums of foreign investment, and as money poured into the country, Icelanders began to invest in real estate. Housing prices skyrocketed, inciting a manic building boom that architectural critic Guja Dögg likens to the Wild West. “People were just building and building, with no consideration for what anyone else was doing. It’s like they were all cowboys shooting into the air, and now the bullets are raining down on them.”
Now, as Icelanders sift through the fallout of a decade of frenzied real estate speculation, much of the detritus is new construction. Large swaths of suburbs surrounding the Reykjavik metropolitan area stand empty, many of the houses only partially built. In downtown Reykjavik, construction is halted on the 1.07-million-square-foot Icelandic National Concert & Conference Center, a 30 billion ISK (approximately $500 million) joint venture between Portus and the Reykjavik city government.
The current state of the real estate sector stems from the fact that despite its old history, Iceland is essentially a young country—it declared independence from Denmark only 64 years ago—and lacks an established urban development practice. The Reykjavik city planning authorities were largely unequipped to oversee the sharp increase in construction, leading to embarrassing city planning missteps.
Olafur Mathiesen, an architect at the firm Glama/Kim who now finds himself unemployed after 12 years, explained that the lack of coordination between local communities and zoning and planning practices led to a form of ad-hoc urban development, resulting in a suburban sprawl of shoddily built multi-family housing, out-of-place highrise apartments, little green space, and a road structure so complex that it makes public transportation slow and inconvenient. Past precedent suggests that this kind of development can lead to a serious decrease in standard of living, a cultural reality foreign to a country that has always prided itself on its progressive social policy and fluid class structure.
Sigrun Birgisdottir, director of the architecture department at the Icelandic Arts Academy, explained how the lack of urban organization is symptomatic of the Reykjavik planning authority’s difficulty administering such large-scale development. “The regulation system—both financial and political—was accustomed to a small-scale sense of the town,” she said. The authority literally was unable to control or account for most of the construction happening in the past few years.
The overwhelming feeling among Icelandic architects is that the architects themselves, as well as developers and city planners, should have known better. “There really has been no organized Icelandic architecture community,” said Birgisdottir, a situation that contributed to the current state of affairs. Until 2001, when the art school opened its undergraduate architecture program, there was no institution to foster conversation among architects. “Icelandic architects would return from studying abroad in their late 20s and then meet each other for the first time as professionals in competition with one another,” Birgisdottir explained.
Guja Dögg agreed, adding, “That doesn’t exist among my generation of architects.” Birgisdottir, Dögg, and Mathiesen are all hopeful that the current state of the architectural industry will allow the country’s architects the time and space to have these long-overdue conversations.
Bjorn Martensen, an architect and civil engineer, is organizing a team to create a review of quality control and assessment processes, while another group is planning a workshop where architects, industrial designers, and other creative professionals can come together to foster innovative design. Some firms are considering an arrangement with the government whereby architects would continue to work while receiving unemployment benefits if the firm could provide ten percent of the salary.
KRADS, a firm established by a group of young Danish and Icelandic architects with offices in both countries, is probably best poised to navigate the ongoing recession. Since opening the office in 2006, the group has been pioneering a new, collaborative type of architectural practice. “We do a little bit of everything,” said member Mads Bay Moller, “architecture, prototyping, conceptual design, and graphic design. And we like to bring people from outside of architecture into the conversation.” When they were recently asked to design a church, they brought on a priest as consultant. “Reykjavik is a super-interesting place,” Moller continued. He said the creative energy and abundant natural resources make it “a great atmosphere to generate new approaches to architecture.”