Cassidy Olivier & Joanne Lee-Young
The Province
The days of self-regulation are over for B.C.’s real estate industry following a series of changes outlined Wednesday by Premier Christy Clark.
The changes — aimed at restoring the public’s confidence in the sector battered by allegations of misconduct, weak reporting mechanisms and governance issues — include the creation of a dedicated superintendent of real estate and go beyond the 28 recommendations offered in a report released Tuesday by an independent advisory group.
Finance Minister Mike de Jong, who joined Clark in announcing the changes, said the report’s findings demonstrated the real estate industry’s self-regulatory structure has “not met the standard” expected in terms of protecting the public interest, a point furthered by Clark.
“Self regulation is very much a privilege that is granted on behalf of the public by government to professions that say they can do the job and prove that they can do the job,” said Clark.
“Well, the real estate sector has had 10 years to get it right on self-regulation and they haven’t.”
Clark said her government will work on all seven recommendations directed at government, including increasing the maximum fines for realtors and brokerages to $250,00 and $500,000, respectively.
Clark also said dual agency transactions — in which the agent acts as both the agent and seller of a property — will come to an end.
All authority to regulate, discipline and make and enforce rules will be taken away from the Real Estate Council of B.C. and given to the strengthened office of the superintendent.
Current superintendent Carolyn Rogers, who had previously said she will step down next month, is also responsible for overseeing all credit unions and pension and mortgage brokering industries.
Further changes will see a “majority” of the council made up non-industry members. At present, the council is made up of 13 real estate agents elected by their peers, three government appointees, and one member chosen by the council to represent strata owners.
Housing critic David Eby said the removal of the industry’s ability to self-police was a “common sense response” to a “scathing report” that clearly demonstrated that self-regulation had failed. The main question was whether the government will adequately fund the new superintendent’s office, he said.
“I think it is a critical first step. But if the government doesn’t adequately staff the new office, then we will be right back where we are today in no time.”
Eby also said the announcement did little to address the issue of affordability.
Tom Davidoff, a professor of economics at the University of B.C.’s Sauder School of Business, agreed, saying the announcement failed to account for other factors that are fuelling the area’s housing prices, including foreign capital.
“What I’m pretty confident of is the reason we have high prices isn’t because we are an unusually sleazy market,” he said. “And this does nothing about supply and does nothing about that surge in overseas demand. So it’s not going to do anything to make Vancouver more affordable, however if you are buying and selling a house, it might give you more confidence that you can trust the guy selling.”
Clark said her government will unveil additional measures that will address the issues of affordability, increasing housing supply and helping first-time buyers enter the market — the later in addition to the steps unveiled in the February budget.
As for her government’s seeming unwillingness to address the impact foreign capital is believed to be having on the market, Clark said: “Everything is on the table.”
“We are considering all the suggestions that have come from citizens, local governments, [what] we’ve learned from other jurisdictions — all of those things are on the table,” she said. “You will see more action on affordability and keeping that dream of home ownership alive for the middle class in the coming weeks and months.”
The Real Estate Council of B.C. responded to the announcement with a two-sentence statement on its website: “Today the B.C. Government announced their intention to end self-regulation in the real estate industry and to establish a dedicated Superintendent of Real Estate. The Council is ready, willing, and able to work with Government to implement the steps announced today.”
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