When Reykjavík‘s status as a market town was announced on 18. August 1786, plans provided for a site to be allocated for the trading centre. Within the site, traders and craftsmen applying for licences would be permitted to build houses and to carry on their trades. When the site was surveyed by Lievog in 1787 the land of Örfirisey and Arnarhóll (now a grassy hill in the heart of the city) was included but these two tracts of land were later withdrawn and two others substituted. The trading centre is marked in yellow and the surrounding agricultural land in green.
In 1787 the population of Reykjavík was around 300. The first street to appear in Reykjavík, Aðalstræti, developed in the years following 1751. At the north are traders‘ houses, moved from their old site on Örfirisey while to the east of the brook is the prison house, built about 1770. This, one of the oldest remaining buildings in Reykjavík, now houses the offices of Prime Minister.
The mapmaker, the Norwegian Rasmus Lievog, worked as an astronomist and surveyor in Iceland from 1779.