BC Political Discussion: Election 2024 & 43rd Parliament

[chowhou]

Originally Posted by Migrant_Coconut

"Basic economics" says that if you subsidize something, you get more of it. The only question is if 25k will be enough to move the needle.

Importantly this policy will only be for new housing and not existing housing.

However, the federal government already tried this exact same policy and scrapped it because no one used it. Maybe the NDP forgot about the First Home Buyer Incentive just like the rest of us?

The biggest question is who gets to use this funding if it's capped at 25k. I'm not a big fan of economic incentives being lotteries.

[Changing City]

Originally Posted by chowhou

Importantly this policy will only be for new housing and not existing housing.

However, the federal government already tried this exact same policy and scrapped it because no one used it. Maybe the NDP forgot about the First Home Buyer Incentive just like the rest of us?

The biggest question is who gets to use this funding if it's capped at 25k. I'm not a big fan of economic incentives being lotteries.

The federal First-Time Home Buyer Incentive was only for up to 10% of the property's price, while the BC program is for 40% of the price, which is a quite different prospect.

Presumably it'll be like any other program, it'll be the first 25,000 first time buyers who qualify, (and many won't as there are income limits just like the federal program), and who want to buy in a project that will support the arrangement.

It's not entirely clear from the NDP statement, but it looks like the $1.29bn annual financing for the program might be the limiting factor, and the up to 25,000 units over 5 years is an estimate of how many homes might be bought as a result.

[whatnext]

Originally Posted by Migrant_Coconut

"Basic economics" says that if you subsidize something, you get more of it. The only question is if 25k will be enough to move the needle.

LOL. That theory worked out so well in the Soviet Union.

[Migrant_Coconut]

Originally Posted by whatnext

LOL. That theory worked out so well in the Soviet Union.

Also Vienna and Singapore - two strongly capitalist cities, one of which has its own school of free market economics named after it.

It's either the private sector or the public sector, and you're already on the record as anti-private sector. Can't have it both ways.

[BaddieB]

Something I find interesting looking into the polls is a seemingly huge over-correction for age in the polls.

For example, a new Leger poll from September 23 to 25 has the BCC at 45 and the NDP at 43 among decideds. However, this is despite the fact that in the unweighted data, the NDP is actually at 47% and the BCC at 40%, a 7 point lead for the NDP.



You can see that the weights for age are dramatically different, adding a lot of weight for younger voters and less weight for older voters. The adjustment goes from 44% of respondents being 55+ weighting it to 42%, 35% for 35-54 to 32%, and a big boost for 18-34 from 21% to 26%.

This would be fine if voter turnout was even across the age groups, but its not. In the 2020 election, 54% of voters were 55+, 29% in middle age and 17% for 18-34. They seem like they would have been better to have not weighted it at all, if they wanted to reflect voter turnout.

Anyways, just seems like a 9 point swing in voter intention based on weighting the demographics seems extreme. Would seem like polls are underrepresenting old people's polling, which some polls show are stronger with the NDP but others with the Conservatives.

https://leger360.com/wp-content/uplo...er-25-2024.pdf

[djmk]

Originally Posted by jollyburger

https://www.cbc.ca/news/canada/briti...yers-1.7333648

Quotes from that article

" "This is a loan," Eby said. "This is not a grant. The homeowner pays interest on it just like they would on any kind of financing." "

"When the buyer sells their unit, the NDP said the province's contribution must be repaid, plus 40 per cent of the appreciation value of the home."

"Eby said if units under the plan are not sold the provincial contribution would need to be repaid 25 years after the date of purchase."

WOW!

I wonder what the banks think about this. The debt of the purchaser does not go down.

[chowhou]

Originally Posted by whatnext

LOL. That theory worked out so well in the Soviet Union.

The Soviet Union absolutely did nothing like that. You may recall, they used this system called "communism". There isn't really much of a point in subsidizing state owned monopolies.

Meanwhile, food is cheap and plentiful in this country partially because we throw so many subsidies at agriculture.

Originally Posted by BaddieB

Something I find interesting looking into the polls is a seemingly huge over-correction for age in the polls.

Unless we assume the pollsters are completely incompetent at their jobs, this is probably a statistical adjustment to account for any (self) selection biases. Perhaps 18-34 year olds who are likely to answer a web poll are much more likely to vote than a typical 18-34 year old, and 55+ doesn't see as much of a difference? There could be any number of reasons why they weighted the way they do.

[Changing City]

Originally Posted by djmk

Quotes from that article

" "This is a loan," Eby said. "This is not a grant. The homeowner pays interest on it just like they would on any kind of financing." "

"When the buyer sells their unit, the NDP said the province's contribution must be repaid, plus 40 per cent of the appreciation value of the home."

"Eby said if units under the plan are not sold the provincial contribution would need to be repaid 25 years after the date of purchase."

WOW!

I wonder what the banks think about this. The debt of the purchaser does not go down.

Did the banks have any issues with the previous federal program?

Obviously the debt doesn't go down if the purchaser isn't paying any of the loan back. It's like a low interest passive investment by the BC government, secured by a second mortgage. Some potential first time buyers might not want that sort of arrangement.

Others will find the household income threshold prevents them from accessing the program, but it's intended to help a specific group of potential buyers, not all of them. First time buyers who are looking to buy an older home won't be eligible either, but those homes are generally priced at less (per square foot) than the equivalent new home.

It's only expected to have up to 5,000 buyers a year using the program, which I think is around 20% of first time buyers in a typical year, so it's potentially a help to some, but not by any means to all. It might help get some projects built that otherwise wouldn't.

[BaddieB]

One benefit of a Conservative government is the privatization of ICBC and a scrapping of the no fault system. Correct me if I'm wrong current system is a huge subsidy for motorists at the expense of everyone else.

[WarrenC12]

Originally Posted by BaddieB

One benefit of a Conservative government is the privatization of ICBC and a scrapping of the no fault system. Correct me if I'm wrong current system is a huge subsidy for motorists at the expense of everyone else.

I don't know, there are pros and cons to both. The previous system was unsustainable and lawyers were the only ones getting rich.

As for privatization, you should check insurance rates in provinces with private systems.

[BaddieB]

BC is on the lower end of the spectrum when it comes to monthly payments.

On the topic of subsidizing motorists, Rustad before was pro bridge tolls but is now against them, presumably to win favor the South of Fraser electorate. I do wonder what would come of it should he be Premier. They're promising a lot of tax cuts that would mean either running a big deficit or cutting funding. Their platform seems to be on how they can outspend the NPD. Unlike in Ontario or Alberta where their conservative governments have good polls and can basically do whatever they want, Rustad would be on thin ice as premier, winning by a small margin. This makes me think he will spend like a Liberal on infrastructure, new schools, justice, potentially on healthcare, etc to garner support, and run a deficit because no one cares about those when it's a Conservative government. He wouldn't have much of a choice, as Poilievre is close to becoming PM and wouldn't have Trudeau to blame.

Or he can just not do any of those things can cut like he wants to and find out.

[CanSpice]

Originally Posted by BaddieB

BC is on the lower end of the spectrum when it comes to monthly payments.

On the topic of subsidizing motorists, Rustad before was pro bridge tolls but is now against them, presumably to win favor the South of Fraser electorate. I do wonder what would come of it should he be Premier. They're promising a lot of tax cuts that would mean either running a big deficit or cutting funding. Their platform seems to be on how they can outspend the NPD. Unlike in Ontario or Alberta where their conservative governments have good polls and can basically do whatever they want, Rustad would be on thin ice as premier, winning by a small margin. This makes me think he will spend like a Liberal on infrastructure, new schools, justice, potentially on healthcare, etc to garner support, and run a deficit because no one cares about those when it's a Conservative government. He wouldn't have much of a choice, as Poilievre is close to becoming PM and wouldn't have Trudeau to blame.

Or he can just not do any of those things can cut like he wants to and find out.

Well, he's already stated he's going to cut the health budget from a planned operational budget of $33.75B in 2025/2026 to $30.6B in 2025/2026, so there's over $3B in cuts for one ministry alone, even though he says that's an increase in funding. I guess in his strange anti-science world cutting $3B is actually increasing funding?

[BaddieB]

The NDP should run on that then. Old people, surprisingly, like public healthcare.

I found this line from an older article very interesting.

At more than $2.2 million raised between April and the end of June, the NDP is far and away the big-money party in British Columbia politics today. It broke its own record for quarterly fundraising (outside of during an actual election campaign period), as well as its single-day record of $670,000 on June 27.

The US Presidential debate that Biden bombed was on June 27. It seems like, as I suspected, that the election in the US will play a big role on how this election turns out. I imagine that as the election ramps up, Trump(ism) will scare a lot of voters who would have otherwise voted conservative and definitely benefit the NDP. The question is if it will be enough.

https://www.theorca.ca/commentary/ro...-highs-9169954

[CanSpice]

Originally Posted by BaddieB

The NDP should run on that then. Old people, surprisingly, like public healthcare.

They are, but I didn't want to link to their press release but instead to the actual budget numbers.

[whatnext]

Originally Posted by BaddieB

The NDP should run on that then. Old people, surprisingly, like public healthcare….

https://www.theorca.ca/commentary/ro...-highs-9169954

Maybe not as many as you think:

….Similar to the last two years, half of Canadians (52%) would like increased access to healthcare provided by independent health entrepreneurs. Residents of Quebec (65%) are the most likely to want increased access to private healthcare. Aligned with those numbers, over six in ten Canadians (65%) agree that Canada should emulate the French or Swedish healthcare system that allow private entrepreneurs to manage publicly funded hospitals – a similar proportion to the last two years.
More than three-quarters of Canadians (78%) believe their provincial healthcare system is too bureaucratic, a steady increase since 2020. Quebec residents (87%) once again sand out as the most likely to agree with this statement. In addition, more than half (58%) of Canadians agree that the rate of spending in their provincial healthcare system is unsustainable, a 4-point increase since last year. Only 19% think that levels of spending are sustainable. …

https://www.ipsos.com/en-ca/less-hal...lthcare-system

[djmk]

Originally Posted by Changing City

Did the banks have any issues with the previous federal program?

Obviously the debt doesn't go down if the purchaser isn't paying any of the loan back. It's like a low interest passive investment by the BC government, secured by a second mortgage. Some potential first time buyers might not want that sort of arrangement.

The average detached home in Vancouver was 814K in 2020. Today the average detached home is 2.09M which means that that house appreciated $1,276,000

If you sell before 25 years (which I assume happens most times), you have to pay back that initial loan, all of it's interest plus $510,400.

That's crazy

[BaddieB]

The average home price in Greater Vancouver was $1.05M in 2020 and $1.25M today. That's basically the same rate as inflation.

https://creastats.crea.ca/board/vanc

[chowhou]

Originally Posted by djmk

The average detached home in Vancouver was 814K in 2020. Today the average detached home is 2.09M which means that that house appreciated $1,276,000

If you sell before 25 years (which I assume happens most times), you have to pay back that initial loan, all of it's interest plus $510,400.

That's crazy

I have no clue where you're getting these average detached home numbers from, but even if we grant these numbers your math and interpretation of the policy are both off.

The homeowner would have to pay the government back $510,400 yes, but that would be the initial loan plus the gains combined (40% of 814k plus 2.09M minus 814k, which is really just 40% of 2.09M, 40% of the original cost + 40% of the gains = 40% of the final).

The interest portion is apparently also a flat 1.5% yearly amount... are they joking?

So basically, the homeowner buys a home for 60% of 814k (488.4k) and only gets 60% of the final sale value of 2.09M (1.254M). So instead of tripling their money, they... triple their money (with a lower barrier of entry) (minus 1.5% compounding on the principal of the loan)).

[Changing City]

Originally Posted by djmk

The average detached home in Vancouver was 814K in 2020. Today the average detached home is 2.09M which means that that house appreciated $1,276,000

If you sell before 25 years (which I assume happens most times), you have to pay back that initial loan, all of it's interest plus $510,400.

That's crazy

Why would any first-time buyer household expect to buy a detached home in Vancouver? It's unlikely that any household earning $135,000 or less, (the limit for the scheme) would be eligible for a mortgage to cover the 60% they have to finance. It's just a bit easier to buy a new apartment with the government covering 40% of the price with a second mortgage.

Your home prices aren't correct. The August 2024 price for a detached home in the Greater Vancouver area is $2,048,000. In August 2020 it was $1,491,300.

[djmk]

Originally Posted by chowhou

I have no clue where you're getting these average detached home numbers from, but even if we grant these numbers your math and interpretation of the policy are both off.

The homeowner would have to pay the government back $510,400 yes, but that would be the initial loan plus the gains combined (40% of 814k plus 2.09M minus 814k, which is really just 40% of 2.09M, 40% of the original cost + 40% of the gains = 40% of the final).

The interest portion is apparently also a flat 1.5% yearly amount... are they joking?

So basically, the homeowner buys a home for 60% of 814k (488.4k) and only gets 60% of the final sale value of 2.09M (1.254M). So instead of tripling their money, they... triple their money (with a lower barrier of entry) (minus 1.5% compounding on the principal of the loan)).

my google skills are sometimes lacking

however, who in their right mind would ever sell a house and only get 60% of the value back. That unit would only go back on the market if it was a forced sell.

THis is being sold as a loan and not co-ownership.