The city of Reykjavík has allotted ISK450 million ($4.1 million) to the building of 25 small houses for the homeless. City Council passed the motion on Sept. 20.

The first of the small houses (also known as tiny houses, part of a growing movement worldwide) are expected to be built by the end of the year, though city planners have yet to decide where they will be placed.

Heiða Björg Hilmisdóttir, Chairman of Reykjavík’s Welfare Committee, said in a conversation with Fréttablaðið that committee members viewed this as a good first step and that there were already two small houses built in the Grandi area that had worked out well.

“We will try to keep the houses spaced apart, will try to spread them properly across the city,” she said. “We hope residents of the city will show understanding.”

Individuals offered housing in these homes will be expected to pay some amount of rent. “We haven’t settled on a number but it won’t be high,” said Hilmisdóttir, adding that the minimum rent will be ISK40,000 (USD $365).

Homelessness is a Growing Problem

Homelessness was a hot topic in Reykjavík this summer. In July, the Iceland Public Advocate published an opinion, asserting that City Hall had not properly addressed homelessness or presented suitable housing solutions for the city’s homeless, which had ballooned in population by a staggering 95% since 2012.

At the same time, members of the opposition were vocal in their criticism of the city’s waiting lists for city housing, providing examples of people falling through cracks in the system: in one case, a man had been living on the street for five years waiting for an apartment —only to be told, when his turn came, that he was ineligible because he was an active alcoholic.

More Than Just Small Houses

The small houses are not the only thing City Hall is doing to tackle the problem.

Reykjavík Social Housing is a city-run organization that aims to provide low-cost housing for people below a certain level of income. City Hall is planning to make special financial contributions to them to fund the construction of extra rental apartments, in addition to those already scheduled.

They will spend an additional ISK50 million-75 million (USD $455,000-$682,000) on public housing. The city is expectingto add 100 new apartments this year.