Demand for data centers continues to accelerate alongside the rapid adoption of artificial intelligence, making the sector one of the most active development pipelines in commercial real estate.
Vacancy rates in primary U.S. markets have plunged to historically tight levels as hyperscale and AI tenants compete for space and capital markets increasingly focus on digital infrastructure as a core asset class. Powered land and access to energy infrastructure have become decisive factors in site selection and pricing as developers and investors chase capacity in a sector expected to rapidly expand in the coming years.
But local resistance has already stalled or reshaped multiple projects, according to reporting from The Associated Press. In the Charlotte suburb of Matthews, North Carolina, developers pulled a proposed data center from an October agenda after city officials signaled it faced unanimous defeat, despite promises of environmentally friendly features and revenue that would have covered roughly half the city’s budget. In Hermantown, a suburb of Duluth, Minnesota, a proposed data center campus several times larger than the Mall of America remains on hold amid challenges to the adequacy of the city’s environmental review, underscoring how organized resident opposition is increasingly influencing outcomes.
While the flashpoints vary by market, opposition tends to center on a familiar set of concerns. In communities already grappling with rising electric bills, residents are wary that power‑hungry data centers could place additional strain on local grids and drive costs even higher. Others point to the loss of open space, farmland and rural character, as well as potential impacts on quality of life, property values and health from on‑site diesel generators and the constant hum of servers. Water use is also a growing point of tension, with critics warning that wells and aquifers could be depleted in water‑stressed regions.
In many jurisdictions, municipal boards are grappling with whether energy and water‑intensive facilities fit within existing zoning frameworks, prompting debates over waivers, new ordinances, or, in some cases, regulations that do not yet exist.
Industry players acknowledge that community pushback is increasingly shaping how data center projects advance. While major technology firms, including Microsoft, Google, Amazon and Meta did not respond to Associated Press questions, Microsoft cited “community opposition, local moratoriums, and hyper‑local dissent” as operational risks in an October securities filing, noting such challenges could delay infrastructure development even amid state and federal support.
The growing resistance is beginning to register as a systemic risk across the data center ecosystem, from big tech firms and developers to utilities and labor groups. Andy Cvengros, who helps lead the data center practice at JLL, said he has worked on seven or eight deals in recent months where opponents organized door‑to‑door campaigns, distributed signs and mobilized neighborhoods against proposed projects.
“It’s becoming a huge problem,” Cvengros said.
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