How Local Communities Can Get The Most Out Of The Data Center Boom

Start with What Residents Actually Want

Gallup did something unusual in a follow-up to its March 2026 poll. Instead of having opponents pick options from a preset list, they were allowed to explain the reasons for their opposition in their own words.

These responses form a “list of demands” ranked by priority. Half of respondents mentioned resource consumption, mostly impacts on water and energy use, along with broader environmental effects. In addition, 22% raised quality-of-life issues, everything from property values to traffic. About 16% mentioned pollution, mainly noise. Only 15% pointed to rising water and electricity bills, and one of industry’s biggest selling points, jobs, barely appeared in the responses at all.

Residents’ complaints are mostly about what they can see and hear. That tells a community what to ask for. Moreover, some of these items are cheaper for a developer to address than a headline-grabbing check.

The conventional benefits package gets this wrong. Recent examples include a proposal to pay every household $10,000 in Hazle Township, Pennsylvania, and a $15 million animal shelter in Ellis County, Texas. These are substantial sums, but a new animal shelter will not quiet the cooling equipment or lower water bills, and to residents the offers can feel like an attempt to buy them off. A community that negotiates from the grievance list gets the mitigation and the amenities it wants, and gets them without the resentment.

The jobs sales pitch can be set aside entirely. The Federation of American Scientists notes in a report that a fully operational data center employs on average only 157 people long term. The city of Lancaster’s two campuses in Pennsylvania are expected to produce only about 300 permanent jobs, even though the announced investments run to $6 billion.

Demand Heat

The most creative item on the menu is something American projects have almost never offered, and it follows directly from the number-one complaint. A data center is a massive source of heat that never switches off. More than 98% of the electricity a facility consumes is ultimately released as low-grade heat, and conventional facilities spend enormous sums to get rid of it. If this heat is treated as a product rather than a waste stream, it becomes the main thing a data center produces that ordinary residents can directly consume.

Europe shows what this looks like in practice. Google’s project in Hamina, Finland aims to cover about 80% of the local district heating network’s annual heat demand, delivering heat to homes, schools, and public buildings. Meta’s facility in Odense, Denmark is estimated to deliver about 100,000 megawatt-hours of recovered heat annually, enough for the needs of roughly 6,900 households.

The model can also be scaled down. In Exmouth, England, Deep Green’s small immersion-cooled server installation heats a public swimming pool and has cut the pool’s heating costs by more than 60%. In addition, Octopus Energy has pledged a £200 million investment to spread this technology to swimming pools and district heating networks across Britain. A single adjacent customer, a school, say, or a hospital, is enough to sustain a heat distribution loop.

One problem relates to timing. The heat produced by an air-cooled facility is too low-temperature for most uses, but the heat produced by liquid cooling, which is becoming increasingly popular for AI workloads, is hot enough to sell. The customer, however, must be located next to the facility or along a short heat distribution loop. Both of these choices are locked in at the design stage. A community that presents a “heat-ready” design clause at the very first meeting preserves this option at almost no cost. This is the main item on the menu that cannot be added later, and that is exactly why it should be raised first.

Defend Tax Revenues

The financial side of the negotiations has its own success story worth studying. A data center’s property tax revenues come from the land and buildings, and above all from the servers inside. Revenues grow as valuations rise, and because servers are replaced every three to five years, the personal-property portion of the tax bill renews itself with every upgrade cycle.

Loudoun County, Virginia shows what defending this source of revenue can buy. In 2025, the county’s data centers paid about $894.5 million in real estate and personal property taxes, up from about $733 million in 2024. Thanks to these revenues, the county has been able to lower the residential property tax rate every year for ten years. The rate fell from its 2016 level of $1.145 per $100 of assessed value to $0.805 in 2026. According to an estimate in an analysis by Mangum Economics for the Northern Virginia Technology Council, without data center revenues the residential property tax rate would have to be about $1.537, or roughly 91% higher, which for a typical homeowner household would mean about $5,900 per year.

Good Jobs First has recorded how governments across the country have granted decades-long property tax abatements, often on top of state-level sales tax exemptions, and received in return one-time gifts. An encouraging detail buried in the evidence is that tax breaks do not necessarily even decide where a project lands. Power availability, fiber, water, and land have usually already narrowed the set of viable sites before tax treatment is even considered, and for developers a state-level equipment tax exemption appears to matter more than a local property tax abatement.

It is entirely possible for a community to protect its own tax base and still get the facility. And if some abatement is ultimately granted, leaving the servers outside the abatement protects the fastest-growing part of the revenue stream.

Move Fast

A community’s bargaining power is real but fleeting, and it is concentrated at a few choke points. Developers compete on how fast a new facility can be switched on. Rezonings, conditional use permits, and connections to public infrastructure are the decisive choke points where local governments can offer speed for binding commitments. Once those permits have been granted, the negotiations are effectively over.

Lancaster proves both sides of this lesson. The city achieved what is considered the country’s first publicized data center community benefits agreement, and its terms show how much there is to win. The agreement includes a cap on city water use of 20,000 gallons per day per campus, closed-loop cooling, noise limits tied to pre-construction ambient noise levels, and a guaranteed community contribution of $20.25 million.

The city, however, did not begin negotiating until after the rezoning opinion had already been published and demolition work had begun. Legal analysts faulted the agreement’s vague, hard-to-enforce language, and local critics noted the absence of a decommissioning plan, gaps the Federation of American Scientists attributes directly to bargaining chips already lost. Even a well-advised city gets a weaker deal if it moves too late.

The natural worry is that a community that bargains hard will lose the project to a neighboring county. Columbia County, Georgia is the strongest counterexample to this worry. The county negotiated a comprehensive package for Google’s $17 billion project. It includes a 65-decibel noise limit, a 500-foot buffer zone from residential buildings, a promise that Google will cover 100% of the project-related electricity costs, and a fixed annual payment of about $40 million for seven years—plus a referendum in November 2026 on whether to use those revenues for property tax relief on residential lots.

County commission chairman Doug Duncan has said the agreement created some of the strictest data center contract terms in the country. Yet Google is investing. For a developer concerned about speed, resident-backed approval is worth paying for, and a project enjoying genuine local support carries lower litigation risk than one rammed through over opposition. Hard bargaining in this case produced an agreement both sides were happy with.

The Playbook

The ideal strategy for a community looks something like this. Negotiate before the rezoning, while the bargaining chips are still in your hands. Diagnose the local complaints first and resolve them with mitigation measures, because removing the nuisances changes people’s minds in a way that amenities cannot. Bring a heat recovery feasibility study to the table at the very first meeting, because this option is lost once the design of the facility is decided upon. And defend the ongoing tax revenue stream, and if some abatement is granted, leave the servers outside of it.

Every county with cheap land near a transmission line has something developers need. That is a strong negotiating position. Communities that use that leverage can turn the most contested form of construction in America into things residents actually want. That outcome is within reach of every community that speaks up in time, and the localities that have already achieved it are the proof.