The World’s Data Center Capital Has Residents Surrounded
- Think Big
- Jul 28
- 8 min read
Updated: Aug 8
Northern Virginia housing developments that will soon be walled in by data centers exemplify the tensions over unfettered growth, as calls increase for regulation.
When Bala Thumma moved into the Briarfield Estates in 2013, he was excited for its prospects. The new development in rural Northern Virginia was surrounded by seemingly endless farmland, and he was told it would eventually flourish into a vibrant residential community.
Loudoun County, where Briarfield is located, was one of the fastest-growing counties in the US at the time. Its economy was thriving on the expansion of the internet thanks to an abundance of cheap, flat land close to Washington, DC. Generous tax breaks helped propel Loudoun as a top destination for tech firms looking to build data storage and processing facilities — and within a decade, it would be crowned the data center capital of the world.
But the industry’s sprawling and largely unchecked footprint hasn’t just gobbled up farmland. New hulking warehouse-like buildings and the power facilities needed to run them increasingly butt up against schools, playgrounds and people’s backyards.
Today, the land within a 1-mile radius of Briarfield and the adjacent neighborhood of Hiddenwood has become construction zones, but not for new housing. Instead, the two communities will soon be boxed in by massive commercial data centers set to be erected just steps from homeowners’ property lines.
Seeking an escape, homeowners in Hiddenwood have pleaded with the county for more than a year to rezone their land for industrial use so they could collectively sell their plots and move away for good. The group’s efforts, however, have drawn swift opposition from Briarfield residents, who argue the application — which initially called for the land to be rezoned for even more data centers — would only shift Hiddenwood’s problem onto them.
Once allies in the fight against the encroachment of data centers, the two communities have appeared on opposing sides at emotional public hearings that drag late into the night. And despite admissions of poor county planning from some officials, no relief is in sight for either party.
“Our life is meant to be lived peacefully and not fighting every rezoning application that goes on in this community,” Thumma told Bloomberg CityLab. “This is the fifth application that we’ve been opposing and [which has fallen] on deaf ears.”
The tensions are raising questions about whether Loudoun County — the wealthiest county in the US — has now had too much of a good thing. Data centers have long been a financial boon, but their explosive growth has exacerbated their literal and metaphorical shadow over Northern Virginia. On top of energy and environmental strains, data centers don’t always make the best neighbors. And attempts to pass more stringent regulations offer lessons for places whose future might soon look like the region.
‘The Backbone of the Modern Economy’
For every $1 invested into data centers, Loudoun County says it receives $26 in tax revenue, which helps fund services like schools and parks while also lowering the tax burden on residents. This fiscal year alone, they’re expected to add $895 million to the county’s coffers, enough to cover most of its estimated $940 million operating budget.
Currently, there are nearly 200 completed facilities hosting computer servers and other equipment in Loudoun, taking up some 49 million square feet in what’s been nicknamed Data Center Alley. That makes the Northern Virginia region, by far, the largest market on the planet, through which more than two-thirds of the global internet traffic passes.
And more are coming thanks to a surge in capital spending on artificial intelligence among Big Tech companies. “Northern Virginia still remains in a league of its own,” said John Dinsdale, chief analyst and research director at Synergy Research Group. “Its data center footprint has continued to grow at a very healthy pace.”
The region has long attracted large-scale data centers with its fiber-rich environment and a generous statewide policy that allows operators to purchase computers and other equipment without paying a sales tax. Between fiscal years 2014 and 2023, Virginia spent $1.7 billion on data center tax exemptions, roughly 42% of the state’s spending on all incentives.
In return, the industry contributes $9.1 billion in GDP each year, according to estimates in a 2024 economic impact report from Virginia’s Joint Legislative Audit and Review Commission. It also brings in 74,000 jobs and $5.5 billion in labor income annually — though those benefits are mostly from the construction of data centers, rather than operations.
“The data center industry is the backbone of the modern economy and it’s vital to Virginia’s economic development program,” said Vince Barnett, industry leader overseeing data centers at the Virginia Economic Development Partnership. “Our rise to that number one position [in the market] was no accident.”
‘We Can’t Be a Human Buffer’
While some residents support continued growth of the industry for its economic benefits, others point to mounting tradeoffs.
A third of data centers are currently located near residential areas, thanks in large part to “inadequate local planning and zoning,” according to the impact report. From construction sending tremors through homes to the incessant humming of generators once the data centers come online, residents say it’s all taking a toll on their quality of life.
“The reality of our situation has become impossible to ignore; the circumstances have pushed many of us beyond our breaking point, with each day more difficult than the last,” Hiddenwood resident Patricia Cave told the County Board of Supervisors in the summer of 2024 during an emotionally charged public hearing over her group’s rezoning application, which would have essentially allowed Hiddenwood homeowners to pool their land and sell it to a developer. Nearly 80 people turned out that evening, including Thumma and his neighbors from Briarfield, in a meeting that lasted nearly six hours.
“This application is our last hope,” Cave said in her testimony. “Living on Hiddenwood Lane is no longer an option, and we can’t be victim again to political wins that are bigger than us — and we can’t be a human buffer.”
Hiddenwood residents contacted by Bloomberg CityLab declined to speak for this story, as did the group’s lawyer, Mike Romeo.
Local activist groups, meanwhile, point to Loudoun as a cautionary tale for other Virginia counties like Prince William and Fairfax, which are vying to be the next hot spot for the fast-growing market. Echoing findings from the state’s own impact study, a new report from the Virginia Chapter of the Sierra Club warned that the industry’s insatiable hunger for energy and water is overwhelming the region’s resources, and stands to drive up bills for residents.
They argue that the costs outweigh the benefits. “People feel like they’ve been steamrolled into getting into a deal where it seems like we’re giving these tax subsidies to data centers,” said Tim Cywinski, communications director at the Sierra Club’s Virginia Chapter. “We’re giving all this energy to data centers, we’re giving all this water to data centers, and it doesn’t seem like we’re getting much back.”
In addition, projects have not only cropped up on vacant land, but they’re also overtaking spaces once belonging to offices, churches and historic sites. “Things that are part of our daily lives are now getting gobbled up,” says Ann Bennett, Sierra Club Virginia Chapter’s data center issue chair. “Where are we going to play soccer? Where are we going to go to church? Just questions about what the landscape of the community will be going forward.”
Data centers are “powerful economic engines for local communities,” said Josh Levi, president of the Data Center Coalition, a trade association for the industry. “They not only create job opportunities in and around the data center, but also they fuel small businesses that are supporting the data center operations and development.” He added that companies work with residents and officials to limit the industry’s impacts and ultimately “strive to be good neighbors.”
A Push for Regulation
Residents say a lack of transparency in the way projects are approved not only catches them off guard, but often strips them of the opportunity to voice their opposition to proposals. In several Virginia counties, data centers are permitted to be developed “by right,” which streamlines approvals without the need for impact studies or public input if they meet certain standards. That’s allowed data centers to expand exponentially in the Northern Virginia region with few constraints.
But growing community resistance has prompted some localities to tighten regulations, making Virginia a leading indicator of attempts to rein in the industry. So far, advocates say the government still imposes too few constraints.
In March, Loudoun’s board of supervisors removed by-right permitting for data center developments, though Bennett says the move appears more symbolic, as it exempts many of the more than 40 data center projects that were proposed before the change.
Henrico County also removed by-right permitting, but unlike Loudoun, officials there are retroactively applying new rules to projects that have already been approved.
Other parts of Virginia have also limited where and how data centers can be built: Fauquier County limits projects only to areas zoned as business parks. And Fairfax County tightened restrictions on the size, location and design of new developments, while also requiring companies to submit noise studies. But officials there stopped short of requiring public reviews for each proposal.
What residents really need, advocates like Bennett say, is statewide legislation. But any blanket mandates are sure to face pushback from business leaders and officials who want to hold on to the dominance in the industry as companies begin looking elsewhere in the US and abroad for cheap land and better incentives.
In May, Virginia Governor Glenn Youngkin vetoed one of the state legislature’s first attempts to regulate data centers: a bipartisan bill that would have required applicants to assess and disclose to local governments the impacts of their projects, including on noise, water usage, parks and historic sites. Youngkin said in his veto explanation that the legislation “imposes a one-size-fits-all approach” on communities. Citing economic benefits laid out in the state’s impact study, he added that data centers are “an immense opportunity” for localities that don't already have them.
“In Virginia, we still want to recruit more data centers,” said Barnett from the state’s economic development group. “It needs to be done intentionally, both at the state and local level.”
‘We Could Have Seen This Coming’
Nationwide, the US has more than 5,400 data centers, more than ten times the number in the next closest market in Germany, according to Cloudscene. And the numbers are expected to increase, particularly in rural areas, as the AI race heats up — even as some tech companies like Microsoft are pulling back on data center construction. (Amazon, the world’s largest seller of rented computing power and data storage, meanwhile, is planning to aggressively expand its portfolio.)
The industry is also getting a boost from US President Donald Trump, who is seeking to loosen regulations that impede AI infrastructure development.
Outside of Northern Virginia, resistance has also been growing at the local level — often with dozens of residents showing up to local town meetings to voice their opposition to new proposals. But results have been mixed.
In Virginia’s rural Pittsylvania County, a grassroots opposition movement successfully fended off a 2,200-acre gas-powered data campus after months of organizing, involving hundreds of community members, attorneys from the Southern Environmental Law Center and air pollution researchers at Harvard University. Meanwhile in Hays County, Texas, a 96-acre facility slated to break ground in July is likely to move forward despite public outcry over the lack of information from developers and, more urgently, the data center’s water demands amid an ongoing drought.
Back in Loudoun County, the board of supervisors made its final decision on a proposed rezoning of the Hiddenwood neighborhood on July 15, more than a year after that initial public hearing and after several revised proposals. They denied their request 5-4.
“I really can’t support converting countryside residential to industrial,” Supervisor Laura TeKrony said during the vote. “I’m concerned about the precedent that this would set for other existing residential communities.”
Still, the board expressed sympathy toward Hiddenwood residents, many who bought their homes decades ago. Supervisor Juli Briskman said she foresaw this predicament when she initially voted against the other data centers currently under construction. “I believe we could have seen this coming down the pike a million miles away,” she said.
— With assistance from Immanual John Milton and Leonardo Nicoletti
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