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In 1930, a decision was made to build the University campus in the area known as Melar. Development thus spread beyond Hringbraut, which had hitherto marked the outer limits of the town. When the Melur district began to be developed in the late 1930s, its first houses were in understated func­tionalist style; many are four-apartment buildings, with two apartments at each end. An innovative feature is four-floor apartment blocks on Hringbraut and Birkimelur.

During World War 11, work was plentiful in Reykjavik, and the prosperity of the times influenced the houses built at the end of the war. They were larger and the roofs higher. Small-paned windows were popular, as were various other decorative details that were definitely non-functionalist. An example of this is the row of houses at Hagamelur 2-12. The features of this style can be seen in many buildings along the streets that end in -hagi, and on Ægissíða, which were developed after 1950. At about the same time, detached houses were built by University staff on Aragata and Oddagata; these are the first Icelandic examples of split-level homes.