Data Farms To Power AI Are A New ‘Not In My Back Yard’ Flashpoint

Data centers to power the fast-growing artificial intelligence sector are often pitched to local communities as economic windfalls, but the surge in new construction has been met with strong local opposition.

These massive facilities draw pushback for their heavy energy and water demands and sprawling land use, even as developers promise jobs and tax revenue that critics say frequently fail to materialize locally.

Here’s the dilemma:

Even as they remain skeptical, Americans have already woven AI into their lives to take care of mundane tasks and increase their productivity, but the growth of data centers has not kept pace with the explosive demand.

Data farms are the latest “NIMBY” — “not in my back yard” — flashpoint, according to Data Center Watch, a nonpartisan grassroots research group that tracks local opposition to such projects. Where to put them isn’t a question easily answered. Some tech companies have even proposed moving data centers to space.

About 1,500 data center projects are in the works nationwide, according to a Pew Research Center analysis of data from Data Center Map, a tool for the industry decision-makers. Investments in new projects are estimated at $88 billion in the United States, according to BloombergNEF. More than $64 billion in projects have been blocked or delayed, according to a 2025 Data Center Watch report.

This week, the city council in Oakley City, California, joined jurisdictions pausing data centers, giving officials time to study how these facilities affect electricity and water systems, gather public input, and draft zoning rules that define where — and if — facilities can be built, Patch reported.

City Councilwoman Shannon Shaw said she wants the 45-day moratorium to be permanent.

“I want this to be as strong as possible. I do not want data centers to come in. I don’t want anything to happen where we don’t end up with a quorum. I want to take every possibility of this slipping through the cracks,” Shaw said, according to the Contra Costa Times.

Opposition Cuts Across Party Lines

Similar debates are taking place in town halls across the country. And it’s not a typical red state-blue state schism that puts people on opposing sides.

Researchers with Data Center Watch said they were surprised by findings showing opposition cuts across party lines, with Republicans typically questioning tax incentives and energy grid strain, while Democrats focused more on environmental concerns and resource consumption.

Rich Janor pointed that out to city officials in Naperville, Illinois, at a meeting in January, Patch reported.

“Opposition is more widespread, more bipartisan and stronger than ever before,” said Janor, one of about 50 local residents who spoke against a data center that was strongly backed by trade unions. The city council voted it down.

In Joliet, Illinois, earlier this year, citizens opposed plans for one of the biggest data farms in the Midwest on a site bordering two mostly residential suburbs, Patch reported.

Andrea Baumhardt, whose home would be across the street from the proposed facility, told council members that she has seen social media advertisements and posts touting the benefits of the Joliet Technology Center proposal but hasn’t seen arguments against it.

“I kind of find them disturbing because they keep advertising about how great it is. And let's be clear, if it’s so great, why can’t we have three basic questions answered: What is the water source? What is the power source? And how much power is it going to be using?”

After hearing seven and one-half hours of debate, the Joliet City Council approved the data center last month. In an email to Patch, the company building the data center said it looked forward to “being a good neighbor and delivering lasting economic benefits and jobs for the Joliet community.”

In Aurora, Illinois, the city council last month approved regulations for a data center development after months of contentious discussions, Patch reported.

The Aurora City Council approved new regulations on data centers as a 180-day moratorium on such developments was set to expire. The city already has five data centers and five under development. City residents have complained about emissions, the noise from multiple regular and emergency operational sources, and the vibration from emergency operations.

They’re Water And Energy Hogs

Data centers are a huge draw on natural resources.

The largest data centers use about 5 million gallons of water a day, enough to supply the needs of 1,000 homes, according to a Tulane Institute study. Sustainability is a big concern, too. More than half (56 percent) of the energy used to power data centers comes from fossil fuels, according to the Environmental Protection Agency.

The rapid growth of AI data centers is driving a surge in electricity demand in New Jersey, which could lead to higher utility bills for residents, according to a report from the New Jersey Board of Public Utilities, Patch reported.

The energy-intensive facilities are expected to account for a large share of the state’s increased power usage in the coming years, putting added strain on the grid and requiring costly infrastructure upgrades. While utilities and policymakers weigh how to meet the rising demand, the report suggests consumers may ultimately bear some of the financial impact through increased rates.

“Families are being asked to pay more, while clean energy projects that could lower costs sit in a long line waiting for approval,” Alex Ambrose, a policy analyst with the New Jersey Policy Perspective, told Patch last year when the report came out.

Ambrose said PJM Interconnection — the nation’s largest regional transmission organization, which manages the power grid for more than 67 million people — “hasn’t adapted fast enough, and now regular people are stuck with the bill.”

Legislation that would have required greater transparency from data center developers, including quarterly disclosures of water and energy use, passed the New Jersey Legislature but was conditionally vetoed by at-the-time Gov. Phil Murphy.

Land Use Is A Big Concern

Most development is occurring in areas that don’t have them, with 67 percent occurring in rural areas, according to a new report from Pew Research Center. About 87 percent of existing data centers are in urban areas.

Pennsylvania has around 110 existing data centers, according to Data Center Map.

In Limerick, residents protested but ultimately were unsuccessful in stopping a controversial land swap to transfer about 55 acres of state game lands in the area to a private developer, a move they said could pave the way for a large data center project, Patch reported.

“Data centers, they’re just bad for wildlife in general. And people just don’t know it yet,” Limerick resident Theresa Guido told the Pennsylvania Game Commission, which approved the deal on a 6-3 vote earlier this year.

Science backs up Guido’s point, which was made repeatedly before game commissioners, whose primary responsibility is managing and protecting wild animals and birds and their habitats across the state.

The millions of gallons of water needed daily to cool data centers can reduce local supplies wildlife depend on, especially in dry regions, according to the nonprofit advocacy organization the National Wildlife Federation.

Other concerns among environmentalists include the harm to ecosystems by the emissions from powering data farms and constant light and noise pollution that disrupt animal behavior, including hunting and reproduction, threatening their survival.

The exchange in Limerick also includes additional land transfers in other counties, despite strong opposition from local residents and some state lawmakers. Under the deal, Limerick Town Center LLC gains access to land adjacent to an industrial site it already owns, near property widely viewed as a potential location for a hyperscale data center.

Residents and environmental advocates argued the swap could lead to increased energy use, water demand, noise, and habitat loss, while supporters of the project say it could bring economic development. Opponents warned the deal could contribute to what state Sen. Katie Muth, a Democrat, called “Data Center Alley 2.0” in southeastern Pennsylvania.

‘Black Carbon’ Proposal Withdrawn, For Now

Late last year, officials in East Vincent Township backed away from a proposed ordinance that would have provided a framework for data centers. At the time, developers planned to sell a data center to an undisclosed tech buyer.

The proposal before township officials called for five data center sites across 1.3 million square feet, along with a 5-acre electrical substation and a “black carbon” plant that would burn old tires.

The developers offered financial incentives for the township, but Muth discounted the actual benefit to the community.

“Let me be clear: a one-time payout to the Township or token ‘community fund’ won’t protect the veterans living next door or the families who would bear the noise, diesel fumes, traffic, massive power and water demands, and the health impacts that come with them for years to come,” Muth said in a statement at the time.

Developers use Community Benefits Agreements — binding contracts between developers and municipalities — “to dress up a bad project,” Muth continued, “but the real costs stay local and permanent, while the benefits are tiny and temporary.”

PA Debates Tightening Regulations

Critics in Plymouth Township, Pennsylvania, were successful in at least delaying a data center after raising questions about potential water waste, skyrocketing electrical costs and other concerns, Patch reported in November.

At the time, it was speculated that the developer pulled the project pending the outcome of a handful of bills moving through the Pennsylvania General Assembly.

Proposed legislation aimed at regulating data centers includes measures that would set standards for noise, water use, and siting and require operators to report their annual water and electricity consumption. Another measure would also direct the state Public Utility Commission to develop rules ensuring data centers pay for necessary grid upgrades, rather than passing those costs on to ratepayers.

Separately, Senate Bill 939, introduced in 2025, sought to streamline permitting for data center projects and drew concern from critics who said its land-use provisions could limit local zoning authority. The bill faced opposition and has not advanced. The related House Bill 502, which has similarly stalled in committee, would remove local authority from the data center permitting process and put it in the hands of an unelected state board.

Tax Breaks Cost States Billions

Data center expansion is largely driven by state-level economic development strategies that provide lucrative tax incentives, such as sales tax exemptions on equipment and property tax abatements, to attract tech companies.

That strategy can be risky.

A report last year warned that rapidly expanding tax breaks for data centers are costing states billions in lost revenue and undermining budget control as the industry grows alongside AI demand.

Of the 37 states that offer them, 10 states each lose more than $100 million annually to data tax breaks, according to the researchers from Good Jobs. First, a Washington, D.C.-based nonprofit that researches and tracks tax incentives and subsidies and analyzes their economic impact.

Texas alone was expected to lose about $1 billion in revenue in 2025. The state has 444 data centers, according to Data Center Map.

The researchers also said the open-ended structure of tax breaks makes it difficult for states to accurately forecast losses. The report also found transparency gaps, noting that 12 of 32 states offering incentives in 2025 did not disclose even total revenue losses tied to the programs.

Good Jobs First argues the incentives are not sustainable and recommends that states eliminate or cap them, or at a minimum, pause programs and improve disclosure of costs and benefits.

Some States Pull Back

As local communities push back, some states are reining in data center development by rescinding tax breaks or placing moratoriums on new data center development.

For example, the state senate in Virginia recently voted to accelerate the end of a massive tax exemption that costs the state $1.6 billion a year, potentially by Jan. 1, 2017. The money would instead be used to fund education and other programs.

Michigan legislators are also considering ending tax breaks for data centers under a proposal introduced by state Rep. Erin Byrnes, a Democrat, Stateline reported.

Byrnes questions, “Who is actually benefiting from these massive data centers that, in many cases, are the size of one or two shopping malls combined?”

“They have a large footprint in terms of land and energy usage. And by and large, it’s not going to be the average resident who lives near a data center who’s going to benefit.”

Georgia, Maryland, New York, Oklahoma and Vermont also are considering changes, according to the Stateline report.

Patch editors Angela Woodall in California; Emily Rosca, John Ferak and Lisa Marie Farver in Illinois; Eric Kiefer in New Jersey; and Justin Heinze in Pennsylvania contributed to this report.

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