The boundary for the residential development extends between Einarsnes, Hangar 3, and Fáfnisnes.
Here are the full plans for the first expansion, http://skipulagsaaetlanir.skipulagsstofnun.is/skipulagvefur/DisplayDoc.aspx?itemid=CknYhOnsfEe0g6Wit8jaDg

Building no. 11 in the plan, south of Fáfnisnes, is a planned school building, not a house.

*Byggðastofnun, ekki byggðarstofnun

Seems like there is supposed to be a connection for bikes and pedestrians near the roundabout over to Grenivíkurvegur according to bid documents (útboðsgögn). Just open the image on the bottom of this page and zoom in: https://www.svalbardsstrond.is/is/mannlifid/frettir/gongu-og-hjolastigur-i-vadlaheidi