Data Center Development and Local Governance Guidelines for Community-Centered Outcomes

Timeline

Status: In-progress

Description

Executive Summary

The surge in data center development presents local governments with a once-in-a-generation opportunity to modernize infrastructure, strengthen fiscal capacity, and shape the physical backbone of the AI economy. At the same time, the same projects are producing unusually intense backlash over water use, energy demand, noise, land use, tax incentives, and the basic question of whether communities are receiving a fair return for the burdens they carry. What used to be treated as industrial, or office use has become a visible and politically charged form of infrastructure.

That shift matters. Data Center Watch estimates that over the last two years, there have been upwards of $60 billion data center projects blocked or delayed (Data Center Watch 2025). Those figures should be read as indicators of the scale of political friction rather than as a complete causal accounting of every delay. Even so, they capture something real: social license to operate data centers is low in many communities, and local governments are often the arena where that conflict becomes actionable.

This report argues that local governments are the gatekeepers and mediators between data center developers and communities. They are not passive recipients of proposals. They can smartly navigate bringing community concerns to the table using tools already at their disposal. The most important insight is that local government leverage is not constant across the development process. It is highest during planning and design, before capital is fully committed and before developers lose flexibility. Once a project is deep into construction or operation, the government's role becomes more supervisory and less strategic.

From that premise, the paper makes four central claims. First, zoning determines whether meaningful negotiation is possible at all. Jurisdictions that continue to treat data centers as by-right uses often give away their strongest opportunity to shape outcomes. Second, the planning phase is the best moment to require studies, disclosures, and commitments on water, energy, noise, land use compatibility, and public benefits. Third, Community Benefit Agreements and similar public benefit frameworks can be effective if they are negotiated early, made specific, and backed by monitoring and enforcement. Fourth, local governments should think in terms of a menu of benefits rather than one-off concessions: fiscal contributions, environmental protections, infrastructure upgrades, workforce commitments, and public transparency should be treated as part of a structured package rather than ad hoc bargaining chips.

The practical implication is straightforward. The question is not whether data centers are inherently good or bad for communities. The better question is who has the power to shape the terms of development, who reaps the benefits, and who gets left carrying the costs. This report is intended to help local governments and communities increase their capacity and organizing potential by identifying two things: (1) the moments in development when governments have leverage to engage in meaningful conversation with data center developers, and (2) how to best use those moments of leverage to make meaningful requests that better serve the community.

Team

Members

AJ Meyer is pursuing a master’s of environmental management at Duke University, concentrating in energy, community engagement and environmental justice. Inspired by working for a global technology company during the initial AI boom, they have spent much of their time at Duke dedicated to understanding the environmental impacts of data centers as well as empowerment opportunities for communities. You can connect with AJ Meyer here.

Leaders

Ian Hitchcock