Premier Christy Clark has promised to introduce rules to address the resale of contracts to buy homes—otherwise known as shadow flipping.
“In a hot housing market, we have to make sure that there is no room for shady operators to take advantage of people," Clark told reporters in Stanley Park. "What we see happening in Vancouver is not right, it is not fair. And so today, I’m announcing that our government is going to end the practice of shadow flipping."
Clark said that her government is looking forward to the recommendations of an advisory group to the Real Estate Council of B.C., which licenses and disciplines real-estate agents and brokerages.
The advisory group is chaired by Financial Institutions Commission CEO Carolyn Rogers and is examining shadow flipping and other issues raised by NDP MLA David Eby at a news conference last month.
"So when it comes to shadow flipping, we are going to require that every seller provide not just consent, but informed consent, for an assignment," Clark promised.
She also said that any profits from shadow flipping will required to go back to the original seller.
"The shady practice that we’ve seen around shadow flipping in Vancouver, we all know, has been driven by greed—pure, naked greed," Clark said. "And the way to end that shady practice of greedy people is to take the profit out of it.”
Changes will take time
The new rules won't come forward for several weeks. Clark also said that "all new property buyers will be required to disclose their citizenship".
But the government intends to avoid taking actions that would diminish the price of existing homes.
"Because anybody who owns a home or a condo—a house or a condo, a townhouse, or any property—doesn't want to see the value of that cut in half after they've already paid for it," Clark declared.
A B.C. government news release stated that Finance Minister Mike de Jong and Deputy Premier Rich Coleman will meet with Vancouver mayor Gregor Robertson. This will be "to discuss collaborative steps governments can take to further improve affordability in Vancouver".
Robertson has repeatedly called for a provincial speculation tax, which the B.C. Liberal government has refused to implement.
"We also need far better tracking of data on international investment and absentee ownership from both the federal and provincial governments, and a substantially expanded commitment at all levels of government to invest in new affordable housing throughout Metro Vancouver," Robertson said in a statement earlier this year.
The premier's news conference was held after NDP Leader John Horgan introduced two bills into the legislature on Thursday (March 17).
The first calls for a two percent tax on the assessed value of homes left vacant by their owners. The second would ensure that people who profit from shadow flipping would pay the property transfer tax on these transactions.
Horgan and NDP housing critic David Eby plan to respond to Clark's statement at 11:30 this morning at Jack Poole Plaza.