The landscape of Alberta’s real estate industry is on the cusp of a significant transformation as members of the venerable Calgary Real Estate Board (CREB) prepare to cast their votes in March. The crucial decision centers on a proposal to merge the 80-year-old board into the broader operations of the Alberta Real Estate Association (AREA). This potential consolidation, touted by proponents as a strategic move towards enhanced efficiencies and member benefits, has nevertheless ignited considerable debate and raised pertinent questions among Calgary realtors regarding its far-reaching implications.
CREB, a cornerstone of the Canadian real estate sector, stands as one of the nation’s largest real estate boards, proudly serving a robust membership of approximately 7,000 professionals. Should CREB members endorse the consolidation in the pivotal vote scheduled for March 15, the organization plans to divest its long-standing office building situated in northeast Calgary. The substantial proceeds from this sale are earmarked for distribution among its members, a distribution model contingent on their years of dedicated membership to the board.
For many, CREB represents an institution synonymous with excellence. Justin Havre, a seasoned Calgary realtor with Justin Havre & Associates of Re/Max First and an 18-year CREB member, articulates this sentiment: “First and foremost, I think it’s important to acknowledge and recognize that the Calgary Real Estate Board is one of the best-run real estate boards in North America, with the way that it’s run and how forward-thinking they have been, and the value that they have been and continue to provide to its current members.” Havre acknowledges the potential rationale for a unified provincial body but expresses caution. “At one point, yes, it does make sense to create one super board for the entire province. The concern is what kind of disruption would there be for members’ experience . . . We know that whenever you make any such moves, there’s going to be stuff that’s going to fall through the cracks and stuff that’s going to break. The concern is how and what kind of an impact will that have on the members.”
Havre also raises critical questions about the planned sale of the CREB office building, an asset that has served the board for approximately 23 years. “Are they going to sell that asset, and then AREA is going to go lease space elsewhere? We are in the real estate business, and we do obviously recommend that real estate is a safe investment,” he emphasizes, highlighting the inherent paradox of selling a tangible asset in an industry built on property investment.
Consolidation Plan: Forging a Unified Front for Alberta Real Estate
The Alberta Real Estate Association (AREA) commands a provincial membership totaling approximately 13,000 real estate professionals. Significantly, all members of individual real estate boards across Alberta are concurrently members of AREA, establishing a foundational link that underpins the proposed consolidation.
Alan Tennant, the CEO of CREB, outlines the strategic vision behind the merger, emphasizing that the consolidation aims to integrate the very best of CREB’s value proposition into AREA’s framework. He assures members that this integration will occur without altering the core services and benefits they currently receive, and crucially, without any adverse impact on existing AREA members. The initiative, spearheaded by CREB, saw its outline plan approved by the boards of directors of both AREA and CREB in early November, signaling a concerted effort towards this transformative step.
Tennant articulates the multi-faceted rationale driving the consolidation: “The reasons for consolidation center on maximizing our efficiencies, supporting member profitability, also maximizing our opportunities, greater risk in threat management and moving to a more responsive delivery model.” This holistic approach seeks to optimize operations, bolster the financial viability of members, unlock new avenues for growth, enhance preparedness against potential risks, and streamline service delivery to create a more agile and effective organization.
As part of the operational integration, CREB staff, including Tennant himself, are slated to transition into AREA operations. While job titles and roles may undergo some adjustments – for instance, with no need for two CEOs, Tennant will assume a different senior executive capacity – the goal is a seamless transition. He acknowledges that some volunteer committees may also evolve to eliminate duplication, ensuring a lean and focused organizational structure. “We do anticipate that there will be some people that are uncomfortable making the move, whether from the AREA side or the CREB side. That’s a normal byproduct of a merger, but we’re doing our best to minimize that. We really need everybody in order for us to have a smooth transition and keep delivering that value proposition,” Tennant conceded, acknowledging the human element in such large-scale organizational changes.
The Vote: A Pivotal Moment for CREB Members
The decision to proceed with the consolidation rests squarely in the hands of CREB members, who will cast their votes at a special general members’ meeting. Alan Tennant confirmed that a two-thirds majority is required to approve the merger. To ensure broad participation and accessibility, members will have the option to vote either in person or virtually. In the lead-up to this critical vote, a series of open houses and broker presentations have been conducted, designed to thoroughly explain the nuances and projected benefits of the consolidation plan to the membership.
Tennant expressed confidence in the diligence undertaken to address member concerns: “We’re hopefully an important part of our members’ day-to-day work, but we’re confident as they’ve been able to digest the consolidation plan, they can see that every possibility has been considered and that, in fact, things important to our members are living on and we hope that’s been fully articulated.”
Brad Mitchell, CEO of AREA, champions the merger as a vital step towards modernizing the real estate industry. He provocatively suggests that if the real estate industry were to be established today, rather than 75 years ago, its structure would undoubtedly differ significantly. “Having 10 different organizations that all have their own administration, all have their own MLS system, and all administered separately across the entire province doesn’t make a lot of sense in 2023,” Mitchell asserted, underscoring the inefficiencies inherent in the current fragmented model.
Mitchell revealed that discussions surrounding such consolidations have been ongoing for an extended period. He believes the proposed plan strikes a crucial balance: “Discussions have been going on for a long time, and we think we’ve found a way to maintain regional representation but also deliver efficiencies and cost savings to the members. That’s why from our perspective, it makes sense, and that’s why we accepted the CREB proposal.” This sentiment highlights a commitment to preserving local identity while leveraging the benefits of a larger, more integrated organization.
How Operations May Change: Unlocking Substantial Savings and Enhanced Services
The proposed consolidation between CREB and AREA is not an isolated event but rather aligns with a broader trend seen across Alberta’s real estate landscape. Brad Mitchell, CEO of AREA, points to the successful integration of four other smaller real estate boards into AREA over the past three to four years. These include Grande Prairie, Lloydminster, Fort McMurray, and the Realtors’ Association of South Central Alberta, which primarily serves the Brooks area. This precedent demonstrates a proven model for absorbing regional boards while enhancing overall operational effectiveness.
Mitchell clarifies the nature of the proposed merger: “This is an operational consolidation which means the administration is going to be consolidated, but the representation won’t be.” He reassuringly adds that the consolidation is not projected to result in a reduction of staff, a common concern in merger scenarios. Instead, the cost savings are anticipated to stem directly from the streamlining of administrative functions and the elimination of duplicate services. Mitchell elaborates: “How we’re going to save money is by consolidating the operations of the two organizations. We both have a call center. In the future, we’re only going to have one. We both do our own accounting audits. In the future, we’re just going to have one. We both run member management systems. In the future, we’ll just have one. So we have all these contracts where we do the same things with different providers . . . The savings are substantial.” This direct approach to combining back-office functions promises significant financial benefits.
These anticipated savings translate directly into tangible financial advantages for members. Mitchell details a projected reduction in annual fees for CREB members. Currently, these fees, which include MLS access, stand at $1,629 per year. Upon consolidation, the new base fee is expected to drop significantly to $1,199 in the first year, further decreasing to $1,049 in the second year. This substantial reduction underscores a key benefit touted by proponents of the merger.
Satellite Office Model: A Modern Approach to Member Accessibility
A significant aspect of the consolidation plan involves the future of CREB’s physical assets, particularly its office building. Mitchell confirms that AREA has made a deliberate decision “not to purchase the (CREB) building. All of those funds will go directly back to the members.” This commitment ensures that the proceeds from the sale of CREB’s long-standing asset directly benefit its membership, reinforcing the financial advantages of the merger.
AREA’s assessment indicates that the current CREB building is significantly underutilized, a common issue in an increasingly digital work environment. To address this and improve member accessibility, the plan proposes a transition to a modern satellite office model. This strategic shift envisions maintaining AREA’s central location while establishing a network of a couple of additional offices strategically spread across the city of Calgary. The fundamental intent behind this model is to ensure that members continue to receive the high-quality, in-person services they currently access at the CREB building. However, these services would now be offered at closer proximity for the majority of members, coupled with a more efficient utilization of physical space. This forward-thinking approach aims to balance traditional service expectations with contemporary operational efficiencies.
Mitchell enthusiastically supports this evolution: “There are lots of benefits for agents around this, and I think it’s time for real estate, the organizations, to evolve a bit.” He also highlights the groundbreaking nature of the initiative within Canada: “We’re doing something that hasn’t really been done in Canada yet, and the board of directors at CREB has been really good in working through all of these issues.” This pioneering spirit underscores the ambition behind the merger to set a new standard for real estate governance and service delivery.
CREB’s office building at 300 Manning Road N.E., source: www.creb.com
Opposition and Reservations: Concerns Over Identity and Value
Despite the compelling arguments put forth by the proponents of the merger, the proposal has encountered significant opposition and heartfelt reservations from a segment of the CREB membership. Steve Zacher, a realtor with Re/Max Real Estate (Central) in Calgary, stands as a vocal opponent, expressing firm conviction against the consolidation.
Zacher challenges the very terminology used to describe the proposed change. “The language that they’re using, it’s not a consolidation. It’s a dissolution. They’re dissolving CREB . . . Just the fact they’re afraid to use that word, it doesn’t give me a lot of confidence,” he states, pointing to what he perceives as a lack of transparency and a fundamental misrepresentation of the nature of the merger. His concern stems from the fear that CREB’s distinct identity and legacy will be entirely absorbed rather than integrated.
He further questions the unique path CREB is taking, noting that while smaller boards have joined AREA, larger urban centers like Edmonton have not followed suit. “Why are we doing this? Our assets are all paid for. We have strong reserves,” Zacher queries, suggesting that CREB, as a financially robust and well-established entity, has no inherent need for such a drastic change. He also raises doubts about the claimed savings: “How many people are going to lose their job? None. How many people are going to lose their job at AREA? None. So where’s the savings there? It just doesn’t make sense. For the life of me, I’m trying to figure it out. There’s nothing good in it for either us or our clients.” This critique highlights a perceived disconnect between the stated benefits and the operational realities, particularly regarding staffing and direct cost reductions. Regarding the underutilized building, Zacher suggests an alternative to selling: “They say the building is underutilized. Well, you know what, we’re realtors, and maybe we should look to lease the building if we’re not using it.” This practical suggestion offers a different perspective on asset management.
Zacher observes a widespread confusion among his peers: “Many realtors don’t understand the reason behind the consolidation,” indicating a potential communication gap or a failure to fully articulate the necessity and benefits of the merger to the broader membership.
“We’re Moving Backwards”: The Fear of Diluted Voice and Services
The concerns voiced by dissenting members extend beyond financial implications and terminology to the very essence of representation and local influence. Steve Zacher passionately argues against the idea that the merger will create a stronger, unified voice. “They keep saying we’re going to be one voice. We’re at 7,000 realtors. We already have a voice. We don’t really need Medicine Hat or Lethbridge to influence the government. If we need to talk to the government, there’s 7,000 of us,” he asserts. This perspective underscores a strong belief in CREB’s existing autonomy and its capacity to advocate effectively for Calgary-specific interests without needing to merge with a larger provincial body that encompasses smaller regional boards.
Zacher expresses profound apprehension about the long-term consequences of the consolidation: “I don’t think it’s good for us. I really don’t. It’s not moving forward; we’re moving backwards. I can see a time where if this goes through that in 10 years, there will be somebody saying we should form a Calgary Real Estate Board to look after our interests.” This stark warning encapsulates the fear of losing local identity, control, and the ability to address unique Calgary market challenges effectively, potentially leading to a future where members feel compelled to re-establish a dedicated local board.
Conversely, Corinne Lyall, owner/broker with Royal LePage Benchmark in Calgary and a former President of CREB, offers a more optimistic outlook, viewing the consolidation as a fundamentally positive and progressive move. While generally supportive, Lyall does acknowledge one prevailing concern: “My only concern right now is probably the lack of detail, but there are many things I know they can’t answer. Until we’re moving forward, it’s hard to understand what that work chart is going to look like.” This highlights a common challenge in large-scale organizational changes, where the fine print of operational restructuring often remains elusive until the merger is underway.
Despite this, Lyall emphasizes the paramount importance of safeguarding member interests: “I think the most important thing that CREB needs to really pay attention to for the members is that feeling that their interests will not be diluted. They still will have all the services that they’re used to getting.” This acknowledges the need for transparent communication and concrete assurances that the merger will not compromise the quality or availability of services members currently value.
Less Red Tape: Streamlining for the Future
Corinne Lyall underscores the historical precedent for this kind of integration, noting that over the years, certain services had already transitioned from CREB to AREA without any negative repercussions for members. This gradual shift, she argues, demonstrates the feasibility and potential benefits of a more extensive consolidation. For Lyall, one of the most compelling advantages of the proposed merger is the significant reduction in bureaucratic processes and “red tape.”
Lyall passionately advocates for embracing progress in the real estate sector. “This is the future. You can’t stop progress from happening,” she asserts. “And if you do, the effect is negative.” She points to a widespread trend of organizational mergers and consolidations observed in various real estate markets, including major organizations and boards in the United States, across Ontario, British Columbia, and notably, Saskatchewan, which now operates with a single provincial real estate board. This global and national trend reinforces her belief that CREB’s consolidation is not an anomaly but a necessary adaptation to modern industry demands.
The financial inefficiency of duplicate services is a key argument for Lyall. “I do believe that this is a true benefit, and a lot of services that we’ve had to pay in duplicity over the years are ridiculous. The cost to be a member has grown, so it would be nice to see some of these duplicate services get eliminated to only one organization where we’re paying one fee.” This highlights a core frustration among members – the burden of paying multiple fees for essentially the same services provided by different layers of organization. By consolidating, the aim is to create a more efficient, cost-effective structure that ultimately benefits individual realtors by streamlining their professional obligations and reducing their financial outlay. The outcome of the March vote will undeniably shape the future trajectory of real estate professionalism and service delivery across Alberta.