For years, data center development followed a predictable formula. Secure land, ensure connectivity, negotiate power, then build. Community response was not a major concern. In fact, community response could almost invariably be counted on to be positive since these projects often brought impactful tax revenue without stress on public road and school infrastructure.

That era is over.

In 2026, data centers are no longer “plug and play” infrastructure projects. They are political, highly visible, and increasingly contested—requiring engagement once reserved for major industrial, energy, or transportation projects.

Growth Has Changed the Conversation

The hyperscale expansion cycle fueled by AI and other data-intensive industries has triggered a dramatic surge in U.S. data center construction, with nearly 3,000 facilities planned or underway as of late 2025. What was once concentrated in a limited number of established hubs has expanded into new regions, new utility territories, and, critically, closer proximity to population centers.

Public resistance to data centers is rarely driven by a single factor. Instead, opposition tends to cluster around a set of recurring themes that blend economic anxiety, quality-of-life considerations, and visual impact concerns:‍

Utility Rates and Grid Stress Considerations

‍Residents and local leaders increasingly question whether large-scale facilities will drive higher electricity costs or strain regional grid reliability, particularly in markets already facing capacity constraints. Often, these facilities do bring some level of disruption to local grids, and both the impact and solution need to be communicated. In some cases, however, data center loads can be beneficial to the stability of the local grid and even bring down rates. But these nuances are often not communicated early and clearly enough either.

Aesthetics and Land Use Concerns‍

Transmission infrastructure, massive buildings, and the transformation of pastoral or undeveloped land into highly technical facilities often become focal points of resistance. In many communities, concerns over visual impact –whether founded or unfounded -- can carry significant emotional weight.

Traffic and Construction Disruption Fears‍

While data centers are not traffic-intensive once operational, their construction phases often generate sustained heavy truck activity, road wear, and localized congestion. Additionally, because these facilities resemble high-traffic industrial buildings, public perception is frequently shaped more by appearance than by operational reality.

Questions Over Noise, Vibrations, and Perceived Nuisance Effects‍

Backup generators, cooling systems, and mechanical equipment frequently trigger concerns about persistent noise, low-frequency vibrations, and overall livability, regardless of whether those concerns are technically substantiated.

Potential Water Usage and Environmental Impact.

Not every data center uses the same cooling techniques. Some may have significant water usage where others might

resemble the usage of an average restaurant. However, in water-stressed or environmentally sensitive regions especially, water usage has become a flashpoint. Even where usage is modest relative to other industrial users, perception often drives the conversation.

While some objections are merited and not every location is the right place for a data center, it’s also fair to note that some objections are based simply on mistrust of corporations and/or community leaders, a lack of information, or misinformation.

Further, beyond project-specific factors, it’s not surprising that the rapid pace of growth and change would cause data center developments to become a lightning rod for opposition to AI and technology in general.

The Policy Environment Is Responding

As local resistance has intensified, policymakers are reacting.

Several states are considering legislation to slow or tighten oversight of data center and related energy infrastructure development. While no blanket statewide moratorium has taken effect, the volume of proposals reflects heightened political sensitivity.

New York has proposed a three-year moratorium on permits for data centers of 20 MW or greater, pending further environmental and regulatory review. Legislators in Georgia and Virginia have also introduced proposals aimed at temporarily halting or restricting certain categories of new data center and infrastructure projects. In addition to limiting the  construction of new facilities, Illinois Governor Pritzker’s recent call for a two-year suspension of data center incentives further underscores how dramatically sentiment around the sector is shifting. Every aspect of data centers, once considered the darlings of the economic development world, are now facing far greater scrutiny.

With 39 gubernatorial races on the 2026 calendar, data center growth and its broader implications will remain front of mind for voters and, consequently, for policymakers as the year progresses.

At the federal level, President Trump heralded a “Rate Payer Protection Pledge” during his State of the Union Address, a pledge to be made by the major tech firms that they will source their own power for their data centers to households from having to foot the bill for infrastructure improvements.  And while it’s unclear whether Congress will take a stand on the topic, Senators Josh Hawley (R-Mo.) and Richard Blumenthal(D-Conn.) have introduced the “Guaranteeing Rate Insulation from Data Centers (GRID) Act,” S. 3852[TH9] , which would require all new data centers to provide their own power without tapping the grid, and would further require all existing data centers to wean themselves off the grid within 10 years.

The Real Constraints Are Often Local

Despite the attention on statehouses and the White House, the most consequential restrictions continue to emerge at the county and municipal levels.

Across the country, local governments have enacted targeted moratoria, zoning revisions, and permitting changes designed to slow or reshape data center development. These actions are typically driven by immediate community pressures rather than long-term technology policy debates. In addition to formal regulatory responses, many projects now encounter reactive, seemingly organic, community opposition that can emerge quickly and unpredictably.

In major data center markets, entitlement pathways that once appeared routine increasingly require public hearings, discretionary approvals, and careful political navigation. Even where formal prohibitions are legally constrained, procedural hurdles and public opposition alone can materially affect project feasibility and timelines.

A Different Playbook: Community Alignment as Core Infrastructure

In the not-too-distant past, data centers were widely viewed as a rare win-win in economic development, generating significant property tax revenues while placing comparatively limited strain on schools, roads, and other public infrastructure. For utility operators, the data centers’ steady and predictable electrical demand offered a level of load stability that few manufacturing users could match.

That landscape has fundamentally changed.  While power availability remains the primary gating factor, the ability to find common ground with the community has become the critical path to a successful project.

Early stakeholder engagement is requisite in order to keep public dialogue focused on facts rather than speculation and to successfully address public concerns before opposition hardens into organized, politicized resistance. Projects that fail to earn community confidence early face potential delays, litigation, political friction, and even cancellation.

The site selection process has adapted to this shift.  

At BLS & Co., monitoring community sentiment – i.e., news headlines, city and county council minutes, legislative activity, and zoning actions -- is now as central to the location screening process as the assessment of the utility infrastructure.  We’re also assisting our clients in taking a more proactive approach to community engagement, seeking collaborative solutions around design, infrastructure, sustainability, and local economic participation.

Data centers are not speculative infrastructure; they are the backbone of everyday digital life, supporting everything from cloud storage of our favorite photos to financial systems to streaming platforms to telemedicine.

Ultimately, the challenge for communities is not a binary choice between acceptance and rejection -- the right answer isn’t to blindly accept unrestricted expansion, but neither is it blanket resistance.

Communities and the data center industry need, and are actively seeking, new ways to engage with each other, and site selection is at the forefront of the new conversation.  

In the coming weeks, we will be following this piece with a deeper examination of the economic and fiscal impacts of data centers.