For me, this unicorn has been a sort of an iconic image for Reykjavík, being shown, as it was, on a very prominent wall within the view from an ample area, and within the most centric area of downtown. It really dominated! It was made by Lora Zombie, seemingly as an ‘Extra Wall’ for the 2016 edition of Wall Poetry, so, again, this first photo, taken on the First of October of 2016, found it just recently done, still fresh.
It still looked glorious in my 2017 visit, for which the wonderful weather I experienced that year really helped, although you can see already clear signs of the background paint (clouds, rainbow, etc.) already in process of fading away :
No urban planning or anything else. Urban art is naturally ephemeral by its own nature. They cannot avoid being victims of the mere passing of time and the weather. So, quite possibly, somebody just decided the wonderful unicorn was already in a too bad condition and it was time for a clean-up: