Today's data center boom has lawmakers and property owners alike raising warnings about risks constructions have on the cost of homeownership, but some argue current opposition doesn't fully address nuances or current needs.
Demand for water and electricity tops the list of concerns, and not just due to the fears of spikes in utility and energy rates. Concerns about how stress to electrical grids and energy supply will strain affordability and increase exposure to environmental risk have policymakers and homeowners calling for laws that put the financial onus of usage costs and elevated threats on the data centers themselves.
Unlike other past efforts to curb development and corporate influence, opposition has come from a wide range of public interests, cutting across the usual political divides.
"Nearby data centers affect everyone, no matter whether they're in your backyard or not, but a lot of them are being proposed in people's backyards. That is really what gets people engaged at this point." said Ben Murray, senior researcher at environmental advocacy nonprofit Food and Water Watch.
A point of contention brought up by critics
"This isn't really bringing jobs back in a meaningful way to areas. It's not investing in the infrastructure that benefits the community as a whole."
Requiring data centers to take on the costs themselves, though, may be a long-term misstep that fails to fully address where consumption and risk come from, both currently and in the future, industry groups warn.
"There's other different manufacturing processes, other types of customers — whether they're currently online or coming in the future — that may have similar electricity demands. You almost end up boxing yourself in if you're only going to be addressing those cost allocations for that one customer," said Khara Boender, senior manager, state policy at the Data Center Coalition.
What lawmakers have proposed
As AI growth brings surging demand for data center capacity, pushback is appearing noticeably among state lawmakers hoping to put on the brakes and keep residents from bearing financial burdens that come with the current boom.
While Virginia is acknowledged as the hub of new data center growth, backlash is emerging nationwide, stretching across political divides and in communities of all sizes.
A 2025 analysis of public statements made by elected officials in political districts with more than 50 megawatts of data center construction under consideration showed a bipartisan split in opposition. Fifty-five percent of the lawmakers labeled themselves Republicans, while the remaining 45% identified as Democrats, according to Data Center Watch.
In Texas, one of the states seeing the greatest influx of data center developments, Republican
Such an approach is also coming from Pennsylvania, where utility commission leaders issued regulation this year that introduced a new electricity rate schedule based on usage in an effort to mitigate risk, and Democratic-led California. A separate California bill would also require them to contribute to clean energy initiatives.
If such proposals pass, they would be following the lead of other states in who added new laws in the books, including South Dakota, whose Data Center Bill of Rights took effect in July.
While supporting the intent behind some of the bills, the data center industry questions why their developments are targeted for their massive consumption when other sectors are also large consumers.
"It's contrary to sound rate-making principles to single out one end user of electricity. We've seen other ways of tackling this more focused on large-load customers above a certain megawatt threshold," Boender said.
At the same time, detractors point out that large-scale business users already receive economic incentives that allow them to set up in local communities in the first place, justifying such rates.
"These projects are subsidized at many different levels. They're subsidized at the state level, whether it's through a sales tax exemption. There's a lot of grants that are being awarded for economic development," Murray said. "At the local level, these projects often receive very, very large property tax exemptions."
Calls grow for moratoria, end of tax breaks
Policymakers in 15 states have either proposed or are currently considering suspension or outright bans on new data centers, although efforts so far have not led to passage. However, calls for moratoria on new developments have borne fruit in scores of cities and counties nationwide.
Another recent focus among critics at state and local levels is the pause or permanent rescission of the many sales and property tax exemptions data center developers enjoy. Such policies have already been enacted in Oregon, Arizona and Washington.
Tax exemption removal is also currently under consideration in Virginia and Pennsylvania, with Texas Gov. Abbott also publicly voicing his support for the elimination of tax incentives in his current gubernatorial campaign.
In June, a bill to eliminate data centers sales and use tax exemptions sailed through the Pennsylvania House of Representatives by a vote of 197 to 5, with support coming from both Republicans and Democrats.
The already high number of existing data centers means little value is gained in continuing to provide such benefits to large technology companies, according to the legislation's sponsor.
"We have moved from discussing the benefits of data centers to moratoriums on data centers. It's really become very clear when you're talking moratoriums that incentives are no longer required," explained Rep. Greg Vitali, D-Pa., regarding the widespread appeal of his proposal.
From a political and economic perspective, tax exemptions also no longer make sense, he noted.
"Why would you give a tax incentive to something that we are trying to slow down?" Vitali asked. "The idea of having to incentivize these with tax breaks when they are becoming an increasing problem just becomes more and more untenable."
While data centers have been cast as villains in political conversations, the ever-increasing need for them is coming primarily from public use, and not primarily from large businesses pivoting toward artificial intelligence, data center advocates pointed out. Data centers would not be expanding at such a large scale if there was not a need to be fulfilled, Boender said.
"The bulk of what is being supported by data centers is driven by consumer demand of those 21 connected devices that exist in the average US household and what we're using on a daily basis: our Zoom calls, our online learning, our telehealth appointments."
What contributes to current backlash, especially when it concerns homeownership and local affordability, is a lack of clear answers from data centers about the amount of resources they are using and their potential community impact, Murray claimed.
"There's a big transparency element that plays into it with how broad a coalition of people fighting against this. People see this lack of transparency and the secrecy that's going on. That rubs people the wrong way," Murray said.
"This isn't an argument of 'is AI good or bad?' What we're talking about is a data center in a community good for the people that live near it, not only in terms of environmental costs, but the financial, the infrastructure costs. Who's shouldering that burden?"
