Vietnam sentences real estate tycoon Truong My Lan to death in its largest-ever fraud case
Aniruddha Ghosal – April 11, 2024
HANOI, Vietnam (AP) — Real estate tycoon Truong My Lan was sentenced Thursday to death by a court in Ho Chi Minh City in southern Vietnam in the country’s largest financial fraud case ever, state media Vietnam Net said.
Lan illegally controlled Saigon Joint Stock Commercial Bank between 2012 and 2022 and allowed 2,500 loans that resulted in losses of $27 billion to the bank, reported state media VnExpress. The court asked her to compensate the bank $26.9 million.
Despite mitigating circumstances — this was a first-time offense and Lan participated in charity activities — the court attributed its harsh sentence to the seriousness of the case, saying Lan was at the helm of an orchestrated and sophisticated criminal enterprise that had serious consequences with no possibility of the money being recovered, VnExpress said.
Her actions “not only violate the property management rights of individuals and organizations but also push SCB (Saigon Joint Stock Commercial Bank) into a state of special control; eroding people’s trust in the leadership of the Party and State,” VnExpress quoted the judgement as saying.
Her niece, Truong Hue Van, the chief executive of Van Thinh Phat, was sentenced to 17 years in prison for aiding her aunt.
Lan and her family established the Van Thing Phat company in 1992 after Vietnam shed its state-run economy in favor of a more market-oriented approach that was open to foreigners. She had started out helping her mother, a Chinese businesswoman, to sell cosmetics in Ho Chi Minh City’s oldest market, according to state media Tien Phong.
Van Thinh Phat would grow to become one of Vietnam’s richest real estate firms, with projects including luxury residential buildings, offices, hotels and shopping centers. This made her a key player in the country’s financial industry. She orchestrated the 2011 merger of the beleaguered SCB bank with two other lenders in coordination with Vietnam’s central bank.
The court found that she used this approach to tap SCB for cash. She indirectly owned more than 90% of the bank — a charge she denied — and approved thousands of loans to “ghost companies,” according to government documents. These loans then found their way back to her, state media VNExpress reported, citing the court’s findings.
She then bribed officials to cover her tracks, it added.
Former central bank official Do Thi Nhan was also sentenced Thursday to life in prison for accepting $5.2 million in bribes.
Lan’s arrest in October 2022 was among the most high-profile in an ongoing anti-corruption drive in Vietnam that has intensified since 2022. The so-called Blazing Furnace campaign has touched the highest echelons of Vietnamese politics. Former President Vo Van Thuong resigned in March after being implicated in the campaign.
But Lan’s trial shocked the nation. Analysts said the scale of the scam raised questions about whether other banks or businesses had similarly erred, dampening Vietnam’s economic outlook and making foreign investors jittery at a time when Vietnam has been trying to position itself as the ideal home for businesses trying to pivot their supply chains away from China.
The real estate sector in Vietnam has been hit particularly hard. An estimated 1,300 property firms withdrew from the market in 2023, developers have been offering discounts and gold as gifts to attract buyers, and despite rents for mixed-use properties known in Southeast Asia as shophouses falling by a third in Ho Chi Minh City, many in the city center are still empty, according to state media.
In November, Communist Party General Secretary Nguyen Phu Trong, Vietnam’s top politician, said that the anti-corruption fight would “continue for the long term.”
US consumer prices came in hotter than expected in March, according to the latest data from the Bureau of Labor Statistics released Wednesday morning.
The Consumer Price Index (CPI) rose 0.4% over the previous month and 3.5% over the prior year in March, an acceleration from February’s 3.2% annual gain in prices. The data matched February’s month-over-month increase.
Both measures came in ahead of economist forecasts of a 0.3% monthly increase and a 3.4% annual increase, according to data from Bloomberg.
The hot print complicates the Federal Reserve’s next move on interest rates as the central bank works to bring inflation back down to its 2% target. Fed officials have categorized the path down to 2% as “bumpy.”
Investors now anticipate two 25 basis point cuts this year, down from the six cuts expected at the start of the year, according to updated Bloomberg data.
On a “core” basis, which strips out the more volatile costs of food and gas, prices in March climbed 0.4% over the prior month and 3.8% over last year — matching February’s data. Both measures were higher than economist expectations of a 0.3% monthly increase and a 3.7% annual gain.
Markets sank following the data’s release, with the 10-year Treasury yield (^TNX) jumping more than 14 basis points to touch above 4.5% for the first time in 2024.
“Today’s crucial CPI print has likely sealed the fate for the June FOMC meeting with a cut now very unlikely,” Seema Shah, chief global strategist at Principal Asset Management, said in reaction to the print. “This marks the third consecutive strong reading and means that the stalled disinflationary narrative can no longer be called a blip.”
“In fact, even if inflation were to cool next month to a more comfortable reading, there is likely sufficient caution within the Fed now to mean that a July cut may also be a stretch, by which point the US election will begin to intrude with Fed decision making,” Shah added.
Ryan Sweet, chief US economist at Oxford Economics, agreed, adding the hotter data may push more policymakers “into the two-rate cut camp.”
“The Fed has a bias toward cutting interest rates this year, but the strength of the labor market and recent gains in inflation are giving the central bank the wiggle room to be patient,” Sweet said. “If the Fed does not cut interest rates in June, then the window could be closed until September because there is little data released between the June and July meetings that could alter the Fed’s calculus.”
“The odds are rising that the Fed cuts rates less than 75 basis points this year,” he predicted.
But Greg Daco, chief economist at EY, cautioned investors to be patient: “I think we have to be very careful with this idea that it’s a play-by-play process.”
In an interview with Yahoo Finance, he noted that “these types of readings do still point to disinflationary pressures. It’s still moving in the right direction, and it will take time.”
Following the data’s release, markets were pricing in an 80% chance the Federal Reserve holds rates steady at its June meeting, according to data from the CME FedWatch Tool. That’s up from a roughly 40% chance the day prior.
Investors are also putting the probability that the central bank won’t cut rates in July at higher than 50%, with markets now largely anticipating the first cut will come in September.
Shelter, gas prices remain sticky
Notable call-outs from the inflation print include the shelter index, which rose 5.7% on an unadjusted, annual basis and 0.4% month over month, matching February. The shelter index accounted for over 60% of the total 12-month increase in core prices.
Sticky shelter inflation is largely to blame for higher core inflation readings, according to economists.
The index for rent and owners’ equivalent rent (OER) each rose 0.4% on a monthly basis. Owners’ equivalent rent is the hypothetical rent a homeowner would pay for the same property. In February, the index for rent rose 0.5% while OER increased 0.4%.
Energy prices — largely to blame for the increase in headline inflation — continued to rise in March, buoyed by higher gas prices. The index jumped another 1.1% last month after rising 2.3% in February. On a yearly basis, the index climbed 2.1%.
The BLS noted the motor vehicle insurance index rose 2.6% in March, following a 0.9% increase in February. The index for apparel increased 0.7% over the month. Other indexes that rose in March included personal care, education, and household furnishings and operations.
The food index increased 2.2% in March over the last year, with food prices rising 0.1% from February to March. The index for food at home held steady over the month.
However, food away from home ticked up 0.3% month over month after rising 0.1% in February.
EPA’s New Rule Aims to Cut Toxic Emissions, But Cancer Alley Air Pollution Could Worsen
Legal challenges could delay the EPA’s ability to enact the measures, which coincide with Louisiana activists’ fight against projects poised to increase air pollution.
By Julie Dermansky – April 10, 2024
Leaders in the fight for clean air from Louisiana’s Cancer Alley joined the Environmental Protection Agency’s Administrator Michael Regan on April 9 in Washington, D.C., for the announcement of a new rule governing air toxics-spewing chemical plants. The rule is intended to prevent cancer in surrounding low-income and minority communities.
The announcement represents a milestone for environmental justice in communities historically overburdened by air-toxics pollution. But a growing number of proposed industrial projects threaten to further pollute the mostly low-income Black neighborhoods along the Mississippi River between Baton Rouge and New Orleans — already home to a large number of petrochemical plants and refineries.
Robert Taylor, leader of the Concerned Citizens of St. John the Baptist Parish, and Sharon Lavigne, head of RISE St. James, expressed gratitude to Regan for setting the new rules. They praised him for following through with his promise to help their communities, though both activists are painfully aware that the fight for environmental justice is far from over.
The EPA stressed that the regulations, which pertain to synthetic organic chemical plants and polymer- and resin-producing facilities, will dramatically reduce the risk of elevated air toxics-related cancer in communities surrounding plants that emit ethylene oxide (EtO), chloroprene, and other dangerous chemicals, officials said. Rules pertaining to EtO and chloroprene have been years in the making.
The new regulations for EtO, chloroprene, benzene, vinyl chloride, 1,3 butadiene, and ethylene dichloride emissions pertains to over 200 manufacturing facilities across the nation that emit one or more of the hazardous chemicals.
On April 8, RISE St. James and Inclusive Louisiana, another Cancer Alley community advocacy group in St. James, held back-to-back press conferences before meeting in court to challenge St. James Parish officials for permitting Koch Industries’ planned expansion of its looming methanol plant in St. James, which is already underway.
Community members argue that the parish council didn’t weigh the potential damage from the plant’s pollution against its economic benefits. “We have had enough of them telling us about jobs and the economy when our health is suffering,” Barbara Washington, one of the founders of Inclusive Louisiana, said before the hearing began. Gail LeBoeuf, another founding member of Inclusive Louisiana, concurred, adding that the economic gains to the community from the plant expansion are negligible.
The “parish and Koch attorneys say the groups have misread and misapplied the parish’s land-use laws and engaged in ‘hyperbole’ over the expansion’s pollution levels and its possible health impacts on its neighbors,” according to the Advocate, a Louisiana newspaper.
The fact that Koch Industries’ administrative office is located in a former high school, which Yuhuang Chemical Industries bought from the parish’s school board a few years ago before selling it to Koch, shows how the parish favors industry over community concerns, according to members of RISE St. James and Inclusive Louisiana. They allege that the sale of the facility, which had been renovated shortly before its sale to a chemical company, was part of the parish’s plan to depopulate the Fifth District, where Formosa Plastics plans to build its massive petrochemical complex.
Members of the Descendants Project, another Cancer Alley community group, attended the St. John the Baptist Parish’s council meeting held on April 9, to voice opposition to a vote the council held to weaken environmental protections already in place. The council voted 7 to 2 to alter its zoning rules — which in turn granted a waiver to Greenfield LA to exempt them from a 2,000-foot setback, bringing the company one step closer to building a proposed grain elevator project. The controversial facility, if realized, will subject the community to additional air pollution. The Descendants Project asserts the grain elevator will destroy its community’s way of life by further industrializing the once pastoral region. Greenfield, like Koch, contends that its project will be an asset to the community and will not harm it.
At the announcement of the new EPA rule, Regan reflected on his first visit to Robert Taylor’s community in November 2021 on his “Journey to Justice” tour. He said the Black students at the Fifth Ward Elementary School who were exposed to chloroprene emissions from the nearby Dupont/Denka manufacturing facility, reminded him of his son. Regan said that listening to Cancer Alley community members and others exposed to toxic chemicals across the Gulf south during that trip inspired him to use his “bully pulpit” to protect them as much as he could, and praised the Biden administration for directing him to do so.
Before the new rule was announced, Taylor, whose community has the dubious distinction of being the only one in the U.S. exposed to EtO and chloroprene, expressed concern to me that despite the new EPA regulations, the children that go to the Fifth Ward Elementary School will continue to be bombarded with toxic emissions until the rule is enacted. He is outraged that students still attend the school, and he can not understand why, even after the EPA sent a highly critical letter to the Louisiana Department of Environmental Quality (LDEQ) and the state’s Board of Health that encouraged the state regulators to direct the St. John the Baptist School Board to relocate the children.
The EPA does arguably have the power to shut down the plant, though it would not give me a yes or a no when I asked the agency if it does. When the EPA had the Department of Justice file a complaint against Denka in 2023, it cited an emergency power granted in Section 303 of the Clean Air Act that not only empowers the agency to take legal action, but also to use its authority to address risks before they cause harm. This includes the ability to stop a facility from operating for at least 60 days while other measures are being considered if the EPA deems its emissions to be an imminent and substantial endangerment to the public health or welfare of the environment.
Lavigne, who won the Goldman Environmental Prize for her efforts fighting against petrochemical plants in 2021, had to walk back her claims of victory against Formosa Plastic’s proposed multi-billion-dollar plastic manufacturing complex earlier this year. Louisiana’s First Circuit Court of Appeals affirmed the LDEQ’s decision to issue air pollution permits for the project, which a lower court had revoked in 2022.
RISE St. James continues to call on the Biden administration to protect its community by directing the the U.S. Army Corps. of Engineers to deny Formosa Plastics a permit to build in designated wetlands. In November 2020, the Corp. revoked a permit it issued to the company after acknowledging errors in its original analysis.
Environmental scientist and community advocate Wilma Subra, who was part of a team of environmental justice advocates that advised the EPA on the finalized rule on chemical plants, was hesitant to hail the new regulation as a major victory. “While there is a lot to cheer about,” she told me on a call after the rule was announced, “only time will tell if they will ever be enacted.”
Subra noted that legal challenges and/or a change in who is running the White House could derail the rule from being enacted. And even if the new rule is put in place, the companies impacted by it have a grace period between 90 days and up to two years to comply with different requirements included in it. Meanwhile, Louisiana is poised to welcome more polluting facilities to Cancer Alley and to allow existing ones to expand.
Like Taylor, Subra is dismayed that students still attend the Fifth Ward Elementary School. She warned school board members in 2023 about the cumulative health impacts that exposure to nearby toxic emssions can have, especially on children.
Subra also pointed out that with more extreme weather events predicted by climate scientists due to climate change, like the cold snaps in south Louisiana this winter when temperatures dipped below freezing for a few days in a row, chemical plants often release toxic emissions well beyond their permitted levels. While the new rule could lead to a decrease in some toxic emissions when these types of pollution incidents occur, it is unclear how much impact the new rule could have during these events.
Julie Dermansky is a multimedia reporter and artist based in New Orleans. She is an affiliate scholar at Rutgers University’s Center for the Study of Genocide and Human Rights. Visit her website at www.jsdart.com.
US foreign-born population grew 15 percent in 12 years
Filip Timotija – April 9, 2024
The U.S. foreign-born population has grown by 15 percent in 12 years, per a new report from the U.S. Census Bureau released Tuesday.
The foreign-born population in the country was around 40 million in 2010, making up 12.9 percent of the total population. The number jumped to 46.2 million in 12 years, with now making up 13.9 percent of the total population.
People who are part of the foreign-born population are those living in the country who are not U.S. citizens at birth, lawful permanent residents, foreign students, refugees and unauthorized migrants.
The median age of the foreign-born population went up more than the native population from 2010 to 2022.
The foreign-born population went up by five years, going from a median age of 41.4 to 46.7 years old, while the native population increased slightly, from 35.9 to 36.9 years old.
North Dakota, South Dakota, West Virginia and Delaware saw their foreign-born populace increase by over 40 percent.
The percentage of foreign-born individuals went up by close to five points, going from 68.3 percent in 2010 to 75.1 percent in 2022, according to the report.
Half of the country’s foreign-born populace was from South America.
New Jersey, California, Florida and New York are four states where immigrants make up more than one-fifth of the state’s population. California led the way with 26.5 percent, New Jersey was second with 23.2 percent, New York had 22.6 percent and Florida was fourth with 21.1 percent.
Close to 50 percent of all immigrants came into the country before 2000.
The data was based on one-year estimates and came from The American Community Survey (ACS).
More than half of foreign-born people in US live in just 4 states and half are naturalized citizens
Mike Schneider – April 9, 2024
ORLANDO, Fla. (AP) — More than half of the foreign-born population in the United States lives in just four states — California, Texas, Florida and New York — and their numbers grew older and more educated over the past dozen years, according to a new report released Tuesday by the U.S. Census Bureau.
In 2022, the foreign-born population was estimated to be 46.2 million people, or almost 14% of the U.S. population, with most states seeing double-digit percentage increases in the last dozen years, according to the figures from the bureau’s American Community Survey.
In California, New Jersey, New York and Florida, foreign-born individuals comprised more than 20% of each state’s population. They constituted 1.8% of West Virginia’s population, the smallest rate in the U.S.
Half of the foreign-born residents in the U.S. were from Latin America, although their composition has shifted in the past dozen years, with those from Mexico dropping by about 1 million people and those from South America and Central America increasing by 2.1 million people.
The share of the foreign population from Asia went from more than a quarter to under a third during that time, while the share of African-born went from 4% to 6%.
The report was released as immigration has become a top issue during the 2024 presidential race, with the Biden administration struggling to manage an unprecedented influx of migrants at the Southwest border. Immigration is shaping the elections in a way that could determine control of Congress as Democrats try to outflank Republicans and convince voters they can address problems at the U.S. border with Mexico.
The Census Bureau report didn’t provide estimates on the number of people in the U.S. illegally.
However, the figures show that more than half of the foreign-born are naturalized citizens, with European-born and Asian-born people leading the way with naturalization rates at around two-thirds of their numbers. Around two-thirds of the foreign-born population came to the U.S. before 2010.
The foreign-born population has grown older in the past dozen years, a reflection of some members’ longevity in the U.S., with the median age increasing five years to 46.7 years. They also became more educated from 2010 to 2022, with the rate of foreign-born people holding at least a high school degree going from more than two-thirds to three-quarters of the population.
Amid explosive demand, America is running out of power
Evan Halper – April 6, 2024
Correction: A previous version of this article incorrectly said the revised forecast for power needs in Georgia showed power use in the state increasing 17 times. New demand, not total demand, is projected to increase 17 times. The article also misspelled the name of the agency that advocates for Maryland ratepayers. It is the Maryland Office of People’s Counsel. The article has been corrected.
Vast swaths of the United States are at risk of running short of power as electricity-hungry data centers and clean-technology factories proliferate around the country, leaving utilities and regulators grasping for credible plans to expand the nation’s creaking power grid.
In Georgia, demand for industrial power is surging to record highs, with the projection of new electricity use for the next decade now 17 times what it was only recently. Arizona Public Service, the largest utility in that state, is also struggling to keep up, projecting it will be out of transmission capacity before the end of the decade absent major upgrades.
Northern Virginia needs the equivalent of several large nuclear power plants to serve all the new data centers planned and under construction. Texas, where electricity shortages are already routine on hot summer days, faces the same dilemma.
The soaring demand is touching off a scramble to try to squeeze more juice out of an aging power grid while pushing commercial customers to go to extraordinary lengths to lock down energy sources, such as building their own power plants.
“When you look at the numbers, it is staggering,” said Jason Shaw, chairman of the Georgia Public Service Commission, which regulates electricity. “It makes you scratch your head and wonder how we ended up in this situation. How were the projections that far off? This has created a challenge like we have never seen before.”
A major factor behind the skyrocketing demand is the rapid innovation in artificial intelligence, which is driving the construction of large warehouses of computing infrastructure that require exponentially more power than traditional data centers. AI is also part of a huge scale-up of cloud computing. Tech firms like Amazon, Apple, Google, Meta and Microsoft are scouring the nation for sites for new data centers, and many lesser-known firms are also on the hunt.
The proliferation of crypto-mining, in which currencies like bitcoin are transacted and minted, is also driving data center growth. It is all putting new pressures on an overtaxed grid – the network of transmission lines and power stations that move electricity around the country. Bottlenecks are mounting, leaving both new generators of energy, particularly clean energy, and large consumers facing growing wait times for hookups.
The situation is sparking battles across the nation over who will pay for new power supplies, with regulators worrying that residential ratepayers could be stuck with the bill for costly upgrades. It also threatens to stifle the transition to cleaner energy, as utility executives lobby to delay the retirement of fossil fuel plants and bring more online. The power crunch imperils their ability to supply the energy that will be needed to charge the millions of electric cars and household appliances required to meet state and federal climate goals.
The nation’s 2,700 data centers sapped more than 4 percent of the country’s total electricity in 2022, according to the International Energy Agency. Its projections show that by 2026, they will consume 6 percent. Industry forecasts show the centers eating up a larger share of U.S. electricity in the years that follow, as demand from residential and smaller commercial facilities stays relatively flat thanks to steadily increasing efficiencies in appliances and heating and cooling systems.
Data center operators are clamoring to hook up to regional electricity grids at the same time the Biden administration’s industrial policy is luring companies to build factories in the United States at a pace not seen in decades. That includes manufacturers of “clean tech,” such as solar panels andelectric car batteries, which are being enticed by lucrative federal incentives. Companies announced plans to build or expand more than 155 factories in this country during the first half of the Biden administration, according to the Electric Power Research Institute, a research and development organization. Not since the early 1990s has factory-buildingaccounted for such a large share of U.S. construction spending, according to the group.
Utility projections for the amount of power they will need over the next five years have nearly doubled and are expected to grow,according to a review of regulatory filings by the research firm Grid Strategies.
Chasing power
In the past, companies tried to site their data centers in areas with major internet infrastructure, a large pool of tech talent, and attractive government incentives. But these locations aregetting tapped out.
Communities that had little connection to the computing industry now find themselves in the middle of a land rush, with data center developers flooding their markets with requests for grid hookups. Officials in Columbus, Ohio; Altoona, Iowa; and Fort Wayne, Ind. are being aggressively courted by data center developers. But power supply in some of these second-choice markets is already running low, pushing developers ever farther out, in some cases into cornfields, according to JLL, a commercial real estate firm that serves the tech industry.
Grid Strategies warns in its report that “there are real risks some regions may miss out on economic development opportunities because the grid can’t keep up.”
“Across the board, we are seeing power companies say, ‘We don’t know if we can handle this; we have to audit our system; we’ve never dealt with this kind of influx before,’” said Andy Cvengros, managing director of data center markets at JLL. “Everyone is now chasing power. They are willing to look everywhere for it.”
“We saw a quadrupling of land values in some parts of Columbus, and a tripling in areas of Chicago,” he said. “It’s not about the land. It is about access to power.” Some developers, he said, have had to sell the property they bought at inflated prices at a loss, after utilities became overwhelmed by the rush for grid hookups.
Rethinking incentives
It is all happening at the same time the energy transition is steering large numbers of Americans to rely on the power grid to fuel vehicles, heat pumps, induction stoves and all manner of other household appliances that previously ran on fossil fuels. A huge amount of clean energy is also needed to create the green hydrogen championed by the White House, as developers rush to build plants that can produce the powerful zero-emissions fuel, lured by generous federal subsidies.
Planners are increasingly concerned that the grid won’t be green enough or powerful enough to meet these demands.
Already, soaring power consumption is delaying coal plant closures in Kansas, Nebraska, Wisconsin and South Carolina.
In Georgia, the state’s major power company, Georgia Power, stunned regulators when it revealed recently how wildly off its projections were, pointing to data centers as the main culprit.
The demand has Georgia officials rethinking the state’s policy of offering incentives to lure computing operations, which generate few jobs but can boost community budgets through the hefty property taxes they pay. The top leaders of Georgia’s House and Senate, both Republicans, are championing a pause in data center incentives.
Georgia regulators, meanwhile, are exploring how to protect ratepayers while ensuring there is enough power to meet the needs of the state’s most-prized new tenants: clean-technology companies. Factories supplying the electric vehicle and green-energy markets have been rushing to locate in Georgia in large part on promises of cheap, reliable electricity.
When the data center industry began looking for new hubs, “Atlanta was like, ‘Bring it on,’” said Pat Lynch, who leads the Data Center Solutions team at real estate giant CBRE. “Now Georgia Power is warning of limitations. … Utility shortages in the face of these data center demands are happening in almost every market.”
A similar dynamic is playing out in a very different region: the Pacific Northwest. In Oregon, Portland General Electric recently doubled its forecast for new electricity demand over the next five years, citing data centers and “rapid industrial growth” as the drivers.
That power crunch threw a wrench into the plans of Michael Halaburda and Arman Khalili, longtime data center developers whose latest project involves converting a mothballed tile factory in the Portland area. The two were under the impression only a couple of months ago that they would have no problem getting the electricity they needed to run the place. Then the power company alerted them that it would need to do a “line and load study” to assess whether it could supply the facility with 60 megawatts of electricity – roughly the amount needed to power 45,000 homes.
Going off the grid
The Portland project Halaburda and Khalili are developing will now be powered in large part by off-the-grid, high-tech fuel cells that convert natural gas into low-emissions electricity. The technology will be supplemented by whatever power can be secured from the grid. The partners decided that on their next project, in South Texas, they’re not going to take their chances with the grid at all. Instead, they will drill thousands of feet into the ground to draw geothermal energy.
Halaburda sees the growth as good for the country and the economy. “But no one took into consideration where this is all going,” he said. “In the next couple of years, unless there is a real focus on expanding the grid and making it more robust, we are going to see opportunities fall by the wayside because we can’t get power to where it is needed.”
Companies are increasingly turning to such off-the-grid experiments as their frustration with the logjam in the nation’s traditional electricity network mounts. Microsoft and Google are among the firmshoping that energy-intensive industrial operations can ultimately be powered by small nuclear plants on-site, with Microsoft even putting AI to work trying to streamline the burdensome process of getting plants approved. Microsoft has also inked a deal to buy power from a company trying to develop zero-emissions fusion power. But going off the grid brings its own big regulatory and land acquisition challenges. The type of nuclear plants envisioned, for example, are not yet even operational in the United States. Fusion power does not yet exist.
The big tech companies are also exploring ways AI can help make the grid operate more efficiently. And they are developing platforms that during times of peak power demand “can shift compute tasks and their associated energy consumption to the times and places where carbon-free energy is available on the grid,” according to Google. But meeting both their zero-emissions pledges and their AI innovation ambitions is becoming increasingly complicated as the energy needs of their data centers grow.
“These problems are not going to go away,” said Michael Ortiz, CEO of Layer 9 Data Centers, a U.S. company that is looking to avoid the logjam here by building in Mexico. “Data centers are going to have to become more efficient, and we need to be using more clean sources of efficient energy, like nuclear.”
Officials at Equinix, one of the world’s largest data center companies, said they have been experimenting with fuel cells as backup power, but they remain hopeful they can keep the power grid as their main source of electricity for new projects.
The logjam is already pushing officials overseeing the clean-energy transition at some of the nation’s largest airports to look beyond the grid. The amount of energy they will need to charge fleets of electric rental vehicles and ground maintenance trucks alone is immense. An analysis shows electricity demand doubling by 2030 at both the Denver and Minneapolis airports. By 2040, they will need more than triple the electricity they are using now, according to the study, commissioned by car rental giant Enterprise, Xcel Energy and Jacobs, a consulting firm.
“Utilities are not going to be able to move quickly enough to provide all this capacity,” said Christine Weydig, vice president of transportation at AlphaStruxure, which designs and operates clean-energy projects. “The infrastructure is not there. Different solutions will be needed.” Airports, she said, are looking into dramatically expanding the use of clean-power “microgrids” they can build on-site.
The Biden administration has made easing the grid bottleneck a priority, but it is a politically fraught process, and federal powers are limited. Building the transmission lines and transfer stations needed involves huge land acquisitions, exhaustive environmental reviews and negotiations to determine who should pay what costs.
The process runs through state regulatory agencies, and fights between states over who gets stuck with the bill and where power lines should go routinely sink and delay proposed projects. The amount of new transmission line installed in the United States has dropped sharply since 2013, when 4,000 miles were added. Now, the nation struggles to bring online even 1,000 new miles a year. The slowdown has real consequences not just for companies but for the climate. A group of scientists led by Princeton University professor Jesse Jenkins warned in a report that by 2030 the United States risks losing out on 80 percent of the potential emission reductions from President Biden’s signature climate law, the Inflation Reduction Act, if the pace of transmission construction does not pick up dramatically now.
While the proliferation of data centers puts more pressure on states to approve new transmission lines, it also complicates the task. Officials in Maryland, for example, are protesting a plan for $5.2 billion in infrastructure that would transmit power to huge data centers in Loudoun County, Va. The Maryland Office of People’s Counsel, a government agency that advocates for ratepayers, called grid operator PJM’s plan “fundamentally unfair,” arguing it could leave Maryland utility customers paying for power transmission to data centers that Virginia aggressively courted and is leveraging for a windfall in tax revenue.
Tensions over who gets power from the grid and how it gets to them are only going to intensify as the supply becomes scarcer.
In Texas, a dramatic increase in data centers for crypto mining is touching off a debate over whether they are a costly drain on an overtaxed grid. An analysis by the consulting firm Wood Mackenzie found that the energy needed by crypto operations aiming to link to the grid would equal a quarter of the electricity used in the state at peak demand. Unlike data centers operated by big tech companies such as Google and Meta, crypto miners generally don’t build renewable-energy projects with the aim of supplying enough zero-emissions energy to the grid to cover their operations.
The result, said Ben Hertz-Shargel, who authored the Wood Mackenzie analysis, is that crypto’s drain on the grid threatens to inhibit the ability of Texas to power other energy-hungry operations that could drive innovation and economic growth, such as factories that produce zero-emissions green hydrogen fuel or industrial charging depots that enable electrification of truck and bus fleets.
But after decades in which power was readily available, regulators and utility executives across the country generally are not empowered to prioritize which projects get connected. It is first come, first served. And the line is growing longer. To answer the call, some states have passed laws to protect crypto mining’s access to huge amounts of power.
“Lawmakers need to think about this,” Hertz-Shargel said of allocating an increasingly limited supply of power. “There is a risk that strategic industries they want in their states are going to have a challenging time setting up in those places.
1.7 million Texas households are set to lose monthly internet subsidy
Pooja Salhotra – April 2, 2024
The $30 per month Daisy Solis has saved off of her internet bill for the past two years stretched a long way.
Those dollars covered new shoes for her three, growing children, dinners out at the Chick-fil-A that popped up in her town of Peñitas in South Texas, and part of a higher-than-usual electricity bill.
Now, Solis worries she might have to sacrifice on her internet speed because a federal subsidy that has helped her pay for her internet plan is set to expire at the end of April.
The Affordable Connectivity Program provides a $30 monthly subsidy to help low-income households pay for internet service, and up to $75 per month for households on tribal lands. The $14.2 billion program was part of the 2021 Bipartisan Infrastructure Law and has helped 23 million households in the U.S — including 1.7 million in Texas — save money on their internet bills. The program’s funding is slated to dwindle at the end of April, though, potentially cutting millions off from the internet. In May, limited remaining funding in the program will allow eligible households to receive a partial discount; there won’t be any benefits after May.
“It has really helped me in that I don’t have to stress out about the bill,” said Solis, 27. “Even though it’s $30, $30 goes a long way.”
The program’s termination will disproportionately impact South Texas, where counties along the Texas-Mexico border had higher than average rates of participation. Overall, 1 in 7 Texans used the program. But in some border counties, including Hidalgo County, about half of its residents used the subsidy, according to data from the Federal Communications Commission.
“Some people have told me they might not get internet if [the subsidy] goes away,” said Marco Lopez, a community organizer at La Unión del Pueblo Entero, a nonprofit organization that supports low-income neighborhoods in the Valley. “I don’t know what to tell them because it’s not just cutting off their internet; it’s cutting off their opportunities for jobs, for school, for telehealth.”
A bipartisan group of lawmakers has introduced a bill that would extend funding for the Affordable Connectivity Program through the end of 2024. But the bill has not moved and faces considerable pushback from Republican lawmakers who claim the Biden administration has spent “recklessly.”
In a December letter to the chair of the FCC, a group of lawmakers, including U.S. Sen. Ted Cruz, disputed that the broadband program was necessary. The lawmakers said that most households using the subsidy already had broadband subscriptions. But that’s likely untrue. According to an FCC survey, 47% of respondents reported having either zero connectivity or relying on mobile service before enrolling in the federal program.
On Tuesday, FCC Chair Jessica Rosenworcel sent a letter to Congress urging them to fund the program until the end of the year. She said the funding has been particularly critical for vulnerable populations, including veterans, seniors, and students.
“We know that nearly half of ACP households are led by someone over the age of 50,” she wrote. “The ACP and the broadband service it supports is ‘need to have’ for many seniors, who depend on the program for managing their health and maintaining access to their medical teams.”
The program’s termination comes as the state and federal government pump historic sums of money to expand broadband infrastructure and close the so-called digital divide. Texas is poised to receive more than $3.3 billion federal dollars to help connect the roughly 7 million Texans who lack access to affordable internet. The state will bolster those funds with an additional $1.5 billion that voters approved in November.
Some advocates worry that terminating the Affordable Connectivity Program at this juncture could jeopardize the success of future broadband investments.
“If we build the infrastructure but then all these people lose internet access, we are going to be taking one step forward and two steps back,” said Kelty Garbee, executive director of Texas Rural Funders, a nonprofit focused on rural philanthropy. “It is important to take a long view.”
Rural areas lag behind their urban counterparts when it comes to broadband access. The combination of low population density and remoteness make such areas unattractive to internet service providers, who are hesitant to invest in expensive infrastructure without a guaranteed pool of customers. Garbee worries that ending the government subsidies could shrink the rural customer base and make those areas even less attractive to internet companies.
Jordana Barton-Garcia, who focuses on broadband investments for nonprofit organization Connect Humanity, said that while the termination of ACP will be a significant loss for high poverty areas, the program is a “Band-Aid” solution. She said the subsidy doesn’t address the root of the problem: that the economics of broadband do not work in rural, low-income areas.
“Instead of being ruled by profit-maximizing major corporations, we need other models to serve low and moderate income communities,” she said. “We need to be able to serve without maximizing profits and instead serve for the public good.”
Some communities have found innovative ways to provide broadband to their rural constituents at a low cost. The city of Pharr in Hidalgo County, for example, created a municipal internet service program that offers plans for as low as $25 per month, the price residents in the border community said they could afford. Barton-Garcia said Pharr won’t be affected by the termination of government subsidies because the city has already secured its own funding. Pharr used grant money, a municipal bond as well as American Rescue Plan dollars to create a municipally-run internet service.
Large internet providers such as Comcast said they will continue to support low-income customers with an affordable plan. Comcast offers eligible customers a plan called internet essentials for $9.95 and a slightly higher-speed plan for $29.95.
For smaller providers in rural Texas, though, a low-cost plan is not financially feasible without government support. Charlie Cano, CEO of ETex Telephone Cooperative, said his lowest cost option is $62 per month.
“Anything lower than that is going to jeopardize our business model,” Cano said. “I’m nervous about what we are going to do about that low-cost option.”
In order to qualify as a grantee for the Broadband Equity Access and Deployment Program — the main broadband program created by the bipartisan infrastructure law — providers must offer a low-cost option to low-income customers. Providers like Cano worry this requirement may make it difficult for companies like his to win federal grant dollars.
Disclosure: Comcast has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.
Biden administration points finger at Republicans for internet bill hikes
Brian Fung, CNN – April 2, 2024
Tens of millions of Americans could see skyrocketing internet bills this spring or may be abruptly kicked off their plans — and it will be congressional Republicans who are to blame, the Biden administration said Tuesday.
The accusation reflects a last-ditch pressure campaign to save a federal program that has helped connect more than 23 million US households to the internet, many for the first time. Without it, those households will be forced to pay hundreds of dollars more per year to stay online.
By the end of the month, funding for the Affordable Connectivity Program (ACP) will run out, jeopardizing the monthly discounts on internet service benefiting an estimated 59 million low-income people, including veterans, students and older Americans.
Many ACP subscribers would be forced to choose between paying for groceries and paying for internet service if the program is shut down, CNN has previously reported.
Although popular with users from across the ideological spectrum, the ACP’s future is in doubt as legislation to extend the program has stalled. Now, as the Federal Communications Commission has begun winding it down, the Biden administration is ramping up pressure on the GOP for standing in the way of a critical lifeline for accessing health care, jobs and education.
“President [Joe] Biden has been calling on Congress to pass legislation that would extend the benefit through 2024. And we know Democratic members and senators have joined him in that effort,” a senior administration official told reporters. “But unfortunately, Republicans in Congress have failed to act.”
Biden has called on Congress to approve $6 billion to continue the ACP. A bill introduced in January by a bipartisan group of lawmakers in the House and Senate would authorize $7 billion. That legislation has 216 co-sponsors in the House, including 21 Republicans, and three in the Senate, including two Republicans.
But policy experts have said it is unlikely Republican House Speaker Mike Johnson will let the bill onto the House floor as GOP leaders have decried government spending, despite the program being used in virtually every congressional district nationwide.
“It is clear the program would be extended if the speaker would allow a vote,” said Blair Levin, an analyst at the market research firm New Street Research. “So far, he has not said anything about it, but it appears he will not allow the House to vote on the legislation. He has not, to my knowledge, said anything substantive about the legislation or the program.”
Levin added that support by Republican Sens. J.D. Vance of Ohio and Kevin Cramer of North Dakota also suggest the bill would pass the Senate, making the House “the biggest obstacle.”
Spokespeople for Johnson and for Senate Majority Leader Chuck Schumer didn’t immediately respond to a request for comment.
The result is a stalemate that, if left unresolved, will lead to the collapse of the ACP by early May.
Administration officials declined to say whether Biden or Vice President Kamala Harris have personally discussed the ACP with congressional Republicans. But the officials told reporters there is currently no Plan B if Congress fails to extend the program.
“There are really no good options in a world in which Congress leaves us without any funding,” said another senior administration official. “There are certainly no easy answers for us to move forward if this program ends. So we want to work as hard as possible to make sure we avoid that possibility.”
Some lawmakers had hoped that money for the ACP could have been included in the recent bipartisan spending deal intended to keep the government open, but those hopes were ultimately left unfulfilled.
On Tuesday, FCC Chairwoman Jessica Rosenworcel sent a letter to Congress outlining the impact that the ACP’s disruption would cause.
“The end of the ACP will have broad impact,” Rosenworcel wrote. “But it is worth noting that they will have special impact on certain vulnerable populations, including senior citizens. We know that nearly half of ACP households are led by someone over the age of 50.”
More than 4 million military households are signed up for the ACP, Rosenworcel added, while 3.4 million households within the ACP program reported using school lunch or breakfast programs, indicating that many program subscribers are parents of children whose ability to do homework assignments may be interrupted by the loss of the ACP. To qualify for the ACP, users are required to meet certain income limits or be a participant in one of a number of other federal aid programs, such as the National School Lunch Program.
Rosenworcel called on Sen. Maria Cantwell and the panel she chairs, the Senate Committee on Commerce, Science, and Transportation, to quickly advance legislation to extend the ACP. But the bill’s future remains foggy.
Feds Want to Seize This $7 Million Condo in a Luxe Trump Building
Justin Rohrlich – April 1, 2024
U.S. authorities have targeted an apartment in a Donald Trump-branded luxury Manhattan tower, where they are looking to seize a $7 million unit prosecutors say was illicitly obtained by one of Congolese President Denis Sassou-Nguesso’s children.
A forfeiture complaint filed Friday in Manhattan federal court and obtained by The Daily Beast says the action “concerns the misappropriation, theft, or embezzlement of hundreds of millions of dollars from the Congolese treasury, some of which was used for the purchase of a luxury apartment in the Southern District of New York for the use of President Nguesso’s daughter.”
“That property is Unit 32G in the Trump International Hotel & Tower at 1 Central Park West, New York, NY 10023,” the complaint states.
The United States is seeking to repossess the property “because the funds used to acquire it are traceable to violations of specified unlawful activities and U.S. law,” according to the complaint.
Sassou-Nguesso, who has been described as a breathtakingly corrupt kleptocrat, has held power in Congo, almost uninterrupted, since 1979.
A past listing for the apartment says it is a corner space “overlooking Central Park and the Hudson River [and] captures the essence of the most sought after Columbus Circle neighborhood. Special features include: floor to-ceiling windows, 10′ ceilings, a gracious entrance gallery, living/dining room, a windowed eat-in-kitchen with washer/dryer, two bedrooms with spectacular views and luxurious baths ensuite, plus a powder room, capacious closets and a separate bar, ideal for entertaining. Sorry no pets allowed.”
Ownership of the Trump International Hotel & Tower is complicated, with the Trump Organization managing the building and owning some units and hundreds of individual owners holding the rest. On Monday, a Trump Org spokeswoman, Kimberly Benza, told The Daily Beast, “If this sale did occur, it would be by a 3rd party unit owner unrelated to our Organization.”
The apartment was procured via a byzantine array of shell companies and intermediaries who routed funds stolen from Congo’s public coffers through entities in Portugal, Cyprus, the British Virgin Islands, and Brazil, the forfeiture complaint states. The money finally ended up in the U.S., where Sassou-Nguesso and her enablers hired law firm K&L Gates to purchase apartment 32G “for the benefit of Sassou-Nguesso, using a portion of the laundered funds and embezzlement proceeds,” according to the complaint.
The complaint says Sassou-Nguesso was aware she could be rejected by Trump International as “a politically-exposed person,” and considered listing her cousin as the unit’s beneficial owner to avoid trouble. However, Trump International officials told Sassou-Nguesso’s team that “it was ‘not a problem’ and that the information was ‘only for the condominium building,’” the complaint goes on. On June 24, 2014, a Portuguese businessman representing Sassou-Nguesso in the deal wired a $710,000 deposit to the condo’s seller, sending the $6,525,000 balance a month later, according to the complaint.
“In sum, the money used to purchase the Defendant Asset was a portion of the approximately USD 19.5 million of Congolese state funds embezzled through… sham contracts… and these embezzled funds were used to purchase the Defendant Asset for Sassou Nguesso’s apparent personal enrichment,” the complaint states.
After the Global Witness report was released in 2019, the Trump Organization said that monthly common charges paid by condo owners did not go directly to Trump himself “for profit.”
According to the forfeiture complaint, Sassou-Nguesso paid some $250,000 in common charges between 2018 and 2022. It says they were paid “out of bank accounts in Luxembourg, Portugal, and the United Arab Emirates” in the name of another Portuguese national fronting for Sassou-Nguesso.
Although the apartment has apparently remained unoccupied since it was purchased, prosecutors say they have reviewed emails from Sassou-Nguesso about interior design work to be conducted at the property, transferring, via her worldwide network, more than $400,000 to a Portuguese firm to carry out the job.
The apartment, according to the forfeiture complaint, “is traceable to… a conspiracy to launder the proceeds of specified unlawful activities.”
“The Court, for the reasons set forth herein, adjudge and decree that the Defendant Asset be forfeited to the United States of America and disposed of in accordance with existing laws, together with costs, and for such other relief as this Court deems proper and just,” the complaint states.
Trump’s properties, as The New York Times once said, “have a long history of serving as home to people with checkered pasts.”
Former federal prosecutor Kenneth McCallion, a onetime member of an organized crime strike force that investigated potential criminal activities during the construction of Trump Tower, told The Daily Beast that dirty money has long been attracted to Trump buildings.
“They’d pay cash for condos, held them for a few years, sold them, and the proceeds of the sale would then be clean money,” McCallion said.
Haitian dictator Jean-Claude “Baby Doc” Duvalier owned a unit in Trump Tower on Manhattan’s 5th Avenue; alleged Russian gangster David Bogatin—one of at least 13 Russian organized crime figures who have resided in the building—owned five.
A Trump development in Panama was “riddled with brokers, customers and investors who have been linked to drug trafficking and international crime,” according to a 2017 NBC News investigation.
They came for Florida’s sun and sand. They got soaring costs and a culture war.
Shannon Pettypiece – March 31, 2024
One of the first signs Barb Carter’s move to Florida wasn’t the postcard life she’d envisioned was the armadillo infestation in her home that caused $9,000 in damages. Then came a hurricane, ever present feuding over politics, and an inability to find a doctor to remove a tumor from her liver.
After a year in the Sunshine State, Carter packed her car with whatever belongings she could fit and headed back to her home state of Kansas — selling her Florida home at a $40,000 loss and leaving behind the children and grandchildren she’d moved to be closer to.
“So many people ask, ‘Why would you move back to Kansas?’ I tell them all the same thing — you’ve got to take your vacation goggles off,” Carter said. “For me, it was very falsely promoted. Once living there, I thought, you know, this isn’t all you guys have cracked this up to be, at all.”
Florida has had a population boom over the past several years, with more than 700,000 people moving there in 2022, and it was the second-fastest-growing state as of July 2023, according to Census Bureau data. While there are some indications that migration to the state has slowed from its pandemic highs, only Texas saw more one-way U-Haul moves into the state than Florida last year. Mortgage application data indicated there were nearly two homebuyers moving to Florida in 2023 for every one leaving, according to data analytics firm CoreLogic.
But while hundreds of thousands of new residents have flocked to the state on the promise of beautiful weather, no income tax and lower costs, nearly 500,000 left in 2022, according to the most recent census data. Contributing to their move was a perfect storm of soaring insurance costs, a hostile political environment, worsening traffic and extreme weather, according to interviews with more than a dozen recent transplants and longtime residents who left the state in the past two years.
“It wasn’t the utopia on any level that I thought it would be,” said Jodi Cummings, who moved to Florida from Connecticut in 2021. “I thought Florida would be an easier lifestyle, I thought the pace would be a little bit quieter, I thought it would be warmer. I didn’t expect it to be literally 100 degrees at night. It was incredibly difficult to make friends, and it was expensive, very expensive.”
Cummings expected she’d have extra money in her paycheck working as a private chef in the Palm Beach area since the state doesn’t have an income tax. But the high costs of car insurance, rent and food cut into that additional take-home pay. After six months of dealing with South Florida’s heat and traffic, she began planning a move back to the Northeast.
“I had been so disenchanted with Florida so quickly,” Cummings said. “There was this feeling of confusion and guilt about wanting to leave, of moving there then realizing this is not anything like I thought it would be.”
While costs have been rising across the country, some areas of Florida have been hit particularly hard. In the South Florida region, which includes Miami, Fort Lauderdale and Palm Beach, consumer prices in February were up nearly 5% over the prior year, compared to 3.2% nationally, according to the most recent data from the Bureau of Labor Statistics.
Homeowners insurance rates in Florida rose 42% last year to an average of $6,000 annually, driven by hurricanes and climate change, and car insurance in Florida is more than 50% higher than the national average, according to the Insurance Information Institute. While once seen as an affordable housing market, Florida is now among the more expensive states to buy a home in, with prices up 60% since 2020 to an average of $388,500, according to Zillow.
For Carter, who made the move in 2022 from Kansas to a suburb of Orlando for the weather, beaches and to be closer to her grandchildren, the costs began to quickly pile up. She purchased a manufactured home and initially expected the lot rent in her community to be $580 a month. But when she arrived she learned her monthly bill was actually $750, and by the time she left it had jumped to $875 a month. Along with the $9,000 in repairs from the armadillos, her car insurance doubled and Hurricane Ian destroyed her home’s roof on her 62nd birthday.
There were also the ever-present conversations and disagreements over politics that started to wear on her. Carter, who describes herself as a “middle of the road” Republican, said she learned to keep her opinions to herself.
“You cannot engage in a conversation there without politics coming up, it is just crazy. We’re retired, we’re supposed to be in our fun time of life,” she said. “I learned quickly, just keep your mouth shut, because I saw people in my own community break up their friendships over it. I don’t like losing friends, and especially over politics.”
But she said the final straw was when she couldn’t find a surgeon to remove a 6-inch tumor from her liver that doctors warned could burst at any moment and lead to life-threatening sepsis. After being passed among doctors, she finally found one willing to remove the tumor. But when she called to schedule the surgery, her calls went unanswered and her messages weren’t returned. After months of trying and fearing for her life, she returned to Kansas to have the procedure done.
“It just seemed like one challenge after another, but I kept with it until there was literally a lifesaving event that I needed to get handled and I wasn’t able to do it there,” she said. “I think it was the most difficult year of my life.”
No state has had more residents relocate to Florida in recent years than New York, with 90,000 New Yorkers moving there in 2022, according to census data. Among all out-of-state mortgage applicants, nearly 9% were from New York in 2023, slightly lower than the previous two years but similar to 2019, according to CoreLogic. One of those New York transplants was Louis Rotkowitz. He lasted less than two years in Florida.
“Like every good New Yorker, this is where you want to go,” he said by phone while driving the last of his belongings out of the state to his new home in Charlotte, North Carolina. “It’s a complete fallacy.”
After years working in emergency medicine, and nearly dying from a Covid-19 infection he contracted at work, Rotkowitz said he and his wife were looking for a more pleasant, affordable lifestyle and warmer weather when they decided to buy a house in the West Palm Beach area in 2022. He got a job there as a primary care physician and his wife took a teaching position.
But he said he quickly found the Florida he’d moved to wasn’t the one he’d experienced on regular visits there over the years. His commute to work often took more than an hour each way, he struggled to get basic services like a dishwasher repair, and the cost of his homeowners association fees doubled.
“I had a good salary, but we were barely making ends meet. We had zero quality of life,” said Rotkowitz.
Along with the rising costs, Rotkowitz said he generally felt unsafe in the state between the erratic traffic — which resulted in a number of his patients being injured by vehicles — and a state law passed in 2023 that allowed people to carry a concealed weapon without a license.
“Everyone is walking around with guns there,” he said. “I consider myself a conservative guy, but if you want to carry a gun you should be licensed, there should be some sort of process.”
Veronica Blaski, who moved to Florida from Connecticut, said rising costs drove her out of the state after less than three years. When at the start of the pandemic her husband was offered a job in Florida making more money as a manager for a landscaping company, Blaski envisioned warm weather and a more comfortable lifestyle.
The couple, both in their 40s, sold their home in Connecticut and were starting to settle into their new community when Blaski said they were hit with a “bulldozer” of costs at the start of 2023.
Her homeowners insurance company threatened to drop her coverage if she didn’t replace her home’s 9-year-old roof, a $16,000 to $30,000 project, and even with a new roof, she was expecting her home insurance rates to double — one neighbor saw their insurance go from $600 a month to $1,200 a month.
She was also facing rising property taxes as the value of her home increased, her homeowners association fees went from $326 a month to $480, and her insurance agent warned that her car insurance would likely double when it was time to renew her policy. Her husband had to get a second job on weekends to cover the higher costs.
While Florida has an unemployment rate below the national average, Blaski and others said wages weren’t enough to keep up with their expenses. The median salary in Florida is among the lowest in the country, according to payroll processor ADP. To afford a home in one of Florida’s more affordable metro areas, like Jacksonville, a homebuyer would need to earn $109,000 a year, around twice as much income as a buyer would have needed just four years ago, according to an analysis by Zillow.
“My little part-time job making $600, $700 a month went to paying either car insurance or homeowners insurance, and forget about groceries,” said Blaski, who was working in retail. “There are all these hidden things that people don’t know about. Make sure you have extra money saved somewhere because you will need it.”
When her husband’s former boss in Connecticut reached out to see if he’d be willing to return, the couple leaped at the chance.
The reverse migration out of Florida isn’t just among newcomers, but also among longtime residents who said they can no longer afford to live there and are uncomfortable with the state’s increasingly conservative policies, which in recent years have included a crackdown on undocumented immigrants, a ban on transgender care for minors, state interventions in how race, slavery and sexuality are taught in schools, and a six-week ban on abortions.
After more than three decades in the Tampa Bay area, Donna Smith left the state for Pennsylvania in December, with politics and rising insurance costs playing a major role in her decision to leave.
“It breaks my heart, it really does, because Florida was really a pretty great place when I first moved there,” Smith said.
Having grown up in Oklahoma, Smith considered herself a Republican, but as Florida’s politics shifted to the right, she said she began to consider herself a Democrat. It wasn’t until the past several years, though, that politics started to encroach on her daily life — from feuds between neighbors and friends to neo-Nazis showing up at a Black Lives Matter rally in her small town.
“When I first moved to Florida, it was a live-and-let-live sort of beach feel. You met people from all over, everybody was relaxed. That’s just gone now, and it’s shocking. It’s just gone,” said Smith, 61, who works as a graphic designer and illustrator. “Instead, it’s just a constant stressful atmosphere. I feel as though it could ignite at any point, and I’m not a fearmonger. It’s just the atmosphere, the feeling there.”
She was already considering a move out of the state when she was told by her homeowners insurance company that she would need to replace her home’s roof because it was older than four years or her insurance premium would be going up to $12,000 a year from $3,600, which was already double what she had been paying. Even with a new roof, she was told her premium would be $6,900 a year. Before she could make a decision about what to do, her insurance policy was canceled.
Shortly after, Smith ended up moving to the Lancaster, Pennsylvania, area, where she is closer to her adult children. While the majority of voters in her new county chose Donald Trump in the last election, she said politics is no longer such a heavy presence in her everyday life.
“I don’t feel it is as oppressive. People don’t wear it on their sleeve like they did in Florida,” she said. “When you walk in a room, you don’t overhear a conversation all the time where people are saying ‘Trump is the best’ or ‘I went to that last rally,’ and they’re telling total strangers while you’re just waiting for your car or something. It was just everywhere.”
Costs and politics were also enough to cause Noelle Schmitz to leave the state after more than 30 years, despite her son having a year left in high school, and relocate to Winchester, Virginia. She said the politics became ever-present in her daily life — one former neighbor had a massive Trump banner in front of their house for years, and another had Trump written in big letters across their yard. When she put out a Hillary Clinton sign in 2016, it was stolen and her house was egged.
“I saw my neighbors and co-workers become more radicalized, more aggressive and more angry about politics. I’m thinking, where is this coming from? These are not the people I remember,” Schmitz said. “I was finally like, we need to get the hell out of here, things are not going well.”
For some Florida newcomers though, politics is the main draw to the state, said John Desautels, who has sold real estate in Florida for decades. While politics never used to be a topic for homebuyers, Desautels said it is now a regular subject his clients bring up. Rather than asking about schools or amenities in a community, prospective buyers are asking him about the political affiliations of a certain neighborhood.
“One of the first things they say is, ‘I don’t want to be in one of them X or Y political party neighborhoods,’” Desautels said. “I spend hours listening to people vent to me about fleeing the communist government of XYZ and they want to come to freedom or whatever. So the politics have been the biggest issue when we get the call.”
Even home showings have become a politically sensitive issue. He recalled showing an elderly woman one property where there were Confederate flags at the gate and swastikas on the fish tank.
But while politics are a lure to people arriving in the state, he said they’re also among the reasons sellers tell him they’re leaving, and the state’s politics have deterred some of his gay or nonwhite clients from moving there.
“The problem is, when we alienate protected classes, it sounds like a good sound bite, but you’ve got to remember those are people who spend money in our community,” he said. “For this pro-business, free state, I’m feeling it in the wallet, bad.”
In Kansas, Carter says it’s good to be home. She moved into a 55-plus community in a small town about 10 miles from Wichita. While in Florida she was paying nearly $900 in lot rent for her manufactured home, she now pays just $520 in rent for a cottage-style apartment — a place she estimates would have cost her $1,800 a month in Florida.
With the money she’s saving in Kansas, she can afford to visit Florida.
“People call me the modern-day Dorothy,” she said. “There’s no place like home.”