Communities Are at Risk If We Don’t Slow the Roll on Data Center Development

The data center boom is barreling full steam ahead. Unless we slow the pace of development enough to understand and mitigate the burdens on local communities, the U.S. will face mounting social, economic, and environmental consequences.

In many ways, the scale of the data center issue is the issue. Recent reports and analyses have reached an astonishing conclusion: investments in data center infrastructure are propping up U.S. GDP growth in 2025, likely surpassing the influence of consumer spending for the first time on record.

This surge has yielded development timelines that far outpace traditional safeguards such as environmental reviews, permitting, and public consultation. In short, the speed of industrial expansion exceeds the speed of local democratic process, as well as our general understanding of the potential environmental and socioeconomic impacts of data center developments.

Here are four reasons why the expansion of data centers at turbo-speed is a red flag for local communities:

1. New data centers are often sited in communities already burdened with other sources of pollution or existing data centers.
   
   The data center market is expanding in both current and new hotspots. Accordingly, the burdens associated with the wave of new data centers are shouldered unevenly, as hyperscale operators pinpoint areas offering cheap land and power, available infrastructure and water, and major tax incentives. For example, two-thirds of data centers are going up in water-stressed regions and tapping into municipal water supplies.
2. With the rushed demand for additional power, companies are choosing fossil fuel resources to power new data centers. This will reinforce pollution hotspots and raise electricity prices in the near and long term.
   
   Despite climate and environmental goals to transition to cleaner and renewable energy sources, data centers are being built with agreements to fund additional fossil fuel-based generation capacity to meet their surging demand for power. The buildout threatens to send electricity bills skyrocketing nationwide and could exacerbate the already daunting distributive and procedural justice challenges of the energy transition.
3. Communities may not understand the cumulative extent of these burdens and the tradeoffs they are making, if included in the decision at all.
   
   When residents receive clear and transparent information about potential benefits and risks, they are best positioned to make informed decisions about what happens in their cities and towns. Yet, the current lack of basic information on data centers, which even scientists and researchers struggle to keep up with, risks creating another frontline of extraction and exploitation.
4. These big-dollar development proposals are inherently risky, and many may not come to fruition, leaving local communities to foot the bills and pollution from a dirty energy buildout with little to show for their sacrifices.
   
   Despite the transience and uncertainty of their associated economic benefits, data centers are ceding millions of dollars in tax incentives annually and promising local investments that may not materialize. This is a familiar playbook: industries can steamroll communities in the name of “public benefit” and jobs—even when data centers don’t actually promise significant long-term job benefits—while, in reality, the profit margins of shareholders and executives take precedence, leaving communities empty-handed when industry leaves town.
   

Grassroots groups are garnering attention for organizing and opposing new data center proposals at town councils, zoning boards, and planning commission meetings. Yet, concerns remain. Are community groups actually being consulted and included in the decision-making process leading up to key decision points? Do local communities that may soon host data centers understand the full long-term implications of these developments?

Already, the rapid expansion of the AI industry has unknown consequences on the future of life as we know it. These changes threaten to alter the foundations of our communities—from the development of our children’s brains to their future employment prospects. In the near term, the rapid construction of data centers risks further hard-wiring inequities into the energy and land-use systems that support American life. If we have learned anything from our past, we should proceed with an abundance of caution for local communities and human lives. To do so, we must understand and communicate the risks to communities that will host these new data centers.

Naomi Cohen-Shields

Kleinman Center Research Assistant

Naomi Cohen-Shields is a Master of City Planning student in the Weitzman School of Design and a research assistant with the Kleinman Center.

Arwen Kozak

Senior Research Coordinator

Arwen Kozak is senior research coordinator at the Kleinman Center. She assists with research and programming initiatives at Kleinman, working to support visiting scholars, students, and grant recipients.

Sanya Carley

Mark Alan Hughes Faculty Director

Sanya Carley is the Faculty Director of the Kleinman Center. She is also Vice Provost for Climate Science, Policy, and Action at Penn and Presidential Distinguished Professor of Energy Policy and City Planning at the Stuart Weitzman School of Design.