Planning matters include everything from the National Planning Strategy to planning by local authorities, including regional, municipal and detail plans. These plans comprise a formal, binding proposal by the local authority for the arrangement of settlement and shaping of the environment, as the plan determines how land is to be allocated. Decisions are also taken on the arrangement of streets and lots and rules set for design of individual buildings, such as the number of floors, construction materials, type of roof and number of homes. Planning is therefore the premise for development and construction practically everywhere.
The government lays down the state's planning policy in its National Planning Strategy, which is valid for a 12-year term. It integrates plans by public entities for communications, regional policy, nature conservation, energy utilisation and other land use.
The National Planning Agency is responsible for strategic development and advising local authorities on planning and construction in Iceland.