The capital and largest city of Iceland, Reykjavik is located in the south-west on the southern shore of Faxaflói bay. With a coastline characterized by peninsulas, coves, straits, and islands at a latitude of 64°08′ N it is the world’s northernmost capital of a sovereign state. Founded in 1786 there was no urban development in the city until the 19th century, as it grew steadily over the next decades and transformed into a regional and later national centre of commerce, population, and governmental activities. As the heart of Iceland’s cultural, economic and governmental activity, Reykjavík is the largest and most populous settlement in Iceland with a population of around 120,000, and over 200,000 in the greater capital region with inhabitants from at least 100 countries. In 2009, foreign-born individuals made up 8% of the total population of Reykjavik, the most common ethnic minorities being Poles, Lithuanians, and Danes, and children of foreign origin, many of whom are adopted, form a more considerable minority in the city’s schools. It is among the cleanest, greenest, and safest cities in the world with geothermal heating systems for both residential and industrial districts. In 2008, natural hot water was used to heat roughly 90% of all buildings in Iceland.
Reykjavík has a sub-polar oceanic climate, yet despite its northern latitude, temperatures very rarely drop below −15 °C (5 °F) in the winter. This is because the Icelandic coastal weather in winter is moderated by the North Atlantic sea Current, itself an extension of the Gulf Stream. The city’s coastal location does make it prone to wind, however, and gales are common in winter. Summers are cool, with temperatures fluctuating between 10 and 15 °C (50 and 59 °F), rarely exceeding 20 °C (68 °F). Overall, the city receives around 1,300 annual hours of sunshine, which is comparable with other places in Northern and North-Eastern Europe. The highest ever recorded temperature in Reykjavík was 25.7 °C (78 °F), recorded on July 30, 2008, while the lowest ever recorded temperature was −19.7 °C (−3 °F), recorded on January 30, 1971. Reykjavík is not severely affected by congestion, and parking spaces are to be found in most areas, yet per capita car ownership in Iceland is among the highest in the world. Public transportation consists of a bus system, which runs through the city outskirts and connects the city to the rest of Iceland.
Reykjavík is believed to be the location of the first permanent settlement in Iceland, established in AD 874, when Ingólfur Arnarson sailed in from Norway,
He is said to have decided it as the location of his settlement by way of the then traditional Norse method of casting his high seat pillars into the ocean when he saw the coastline, settling where the pillars came to shore. The billowing steam plumes from many hot springs in the region are said to have inspired Reykjavik’s name, which loosely translates to Smoke Cove.