Tech companies and developers looking to plunge billions of dollars into ever-bigger data centers to power artificial intelligence and cloud computing are increasingly losing fights in communities where people don’t want to live next to them, or even near them.
Communities across the United States are reading about – and learning from – each other’s battles against data center proposals that are fast multiplying in number and size to meet steep demand as developers branch out in search of faster connections to power sources.
In many cases, municipal boards are trying to figure out whether energy- and water-hungry data centers fit into their zoning framework. Some have entertained waivers or tried to write new ordinances. Some don’t have zoning.
In Rhode Island, some state lawmakers have taken a different tack.
Last legislative session, bills were introduced in both chambers that would have offered long-term tax breaks to developers looking to construct data centers in Rhode Island.
More than 30 states, including neighboring Massachusetts and Connecticut, already have tax incentives on the books for AI-scale data center development.
But the measures in Rhode Island were tabled after Tax Administrator Neena S. Savage warned that the legislation lacked clear job creation requirements with taxation ties to Rhode Island, risks granting tax breaks to out-of-state firms with few local benefits and uses overly broad or outdated definitions that don’t reflect modern data center operations.
Alan Krinsky, director of research and fiscal policy at the Providence-based nonprofit Economic Progress Institute, opposed the bills, raising concerns about light pollution, increased electricity costs and a lack of jobs.
It’s unclear whether another version of the legislation will be resubmitted this year.
But nationwide, as more people hear about a data center coming to their community, once-sleepy municipal board meetings in farming towns and growing suburbs now feature crowded rooms of angry residents pressuring local officials to reject the requests.
“Would you want this built in your backyard?” Larry Shank asked supervisors last month in Pennsylvania’s East Vincent Township. “Because that’s where it’s literally going, is in my backyard.”
A growing number of proposals are going down in defeat, sounding alarms across the data center constellation of Big Tech firms, real estate developers, electric utilities, labor unions and more.
Andy Cvengros, who helps lead the data center practice at commercial real estate giant Jones Lang LaSalle Inc., counted seven or eight deals he’d worked on in recent months that saw opponents going door to door, handing out shirts or putting signs in people’s yards.
“It’s becoming a huge problem,” Cvengros said.
Data Center Watch, a project of 10a Labs, an AI security consultancy, said it is seeing a sharp escalation in community, political and regulatory disruptions to data center development.
Between April and June alone, its latest reporting period, it counted 20 proposals valued at $98 billion in 11 states that were blocked or delayed amid local opposition and state-level pushback. That amounts to two-thirds of the projects it was tracking.
Some environmental and consumer advocacy groups say they’re fielding calls every day, and are working to educate communities on how to protect themselves.
“I’ve been doing this work for 16 years, worked on hundreds of campaigns I’d guess, and this, by far, is the biggest kind of local pushback I’ve ever seen here in Indiana,” said Bryce Gustafson of the Indianapolis-based Citizens Action Coalition.
For some people angry over steep increases in electric bills, their patience is thin for data centers that could bring still-higher increases.
Losing open space, forest, or rural character is a big concern. So is the damage to quality of life, property values, or health by on-site diesel generators kicking on or the constant hum of servers. Others worry that wells and aquifers could run dry.
Lawsuits are flying – both ways – over whether local governments violated their own rules.
Big Tech firms Microsoft, Google, Amazon and Facebook – which are collectively spending hundreds of billions of dollars on data centers across the globe – didn’t answer Associated Press questions about the effect of community pushback.
Microsoft, however, has acknowledged the difficulties. In an October securities filing, it listed its operational risks as including “community opposition, local moratoriums, and hyper-local dissent that may impede or delay infrastructure development.”
Even with high-level support from state and federal governments, the pushback is having an impact.
Maxx Kossof, vice president of investment at Chicago-based developer The Missner Group, said developers worried about losing a zoning fight are considering selling properties once they secure a power source – a highly sought-after commodity that makes a proposal far more viable and valuable.
“You might as well take chips off the table,” Kossof said. “The thing is you could have power to a site and it’s futile because you might not get the zoning. You might not get the community support.”
Some in the industry are frustrated, saying opponents are spreading falsehoods about data centers – such as polluting water and air – and are difficult to overcome.
Still, data center allies say they are urging developers to engage with the public earlier in the process, emphasize economic benefits, sow good will by supporting community initiatives and talk up efforts to conserve water and power, and protect ratepayers.
“It’s definitely a discussion that the industry is having internally about, ‘Hey, how do we do a better job of community engagement?’ ” said Dan Diorio of the Data Center Coalition, a trade association that includes Big Tech firms and developers.
With PBN reports.
