Data Centers Are Moving In Next to American Homes—Here’s How Neighborhoods Are Changing

Data centers are increasingly popping up next to American homes, and they're changing neighborhoods in the process.

The number of large data centers over 50 megawatts has increased sevenfold from 2018, and now U.S. communities host over 350 of them. Not surprisingly, the share of home sales near them has doubled, now accounting for 1.5% of all sales, new Realtor.com® research shows.

Data centers have emerged as the hot-button issue of 2026. Many cities and states have paused data center developments or incentives amid growing public controversy over their heavy power consumption, noise, and environmental pollution. And more lawsuits are pitting the hesitant neighbors against each other.

By the end of this year, almost 2% of home sales will be near a big data center. Not because there is more sales activity around data centers, but because there are more data centers in more U.S. communities than ever.

And while data centers are pushing into increasingly rural areas and lower-income regions, their impact on home values remains unclear.

In a statement to Realtor.com, the Data Center Coalition, which represents many major developers and users in the industry, said companies operate how they are authorized to do so.

They also follow local ordinances and rules, said Nicole Riley, director of Virginia Government Affairs for the group. They provided 5.5 million jobs, $204 billion in taxes, and $1.7 trillion in gross domestic product.

"Data centers are committed to being responsible actors in the localities where they operate," Riley said. "The data center industry takes compliance and accountability seriously and works closely with the many local, state, regional, and federal bodies responsible for permitting and project approvals, environmental regulation, and oversight."

New neighbors

Data centers are also moving out to more rural areas. Pulling housing data from Aterio, Realtor.com looked at the communities where these new centers are coming.

But overall, the nation's data center output is exploding. In 2015, 50-megawatt-plus centers operated in 21 states drawing a combined 9,600 MWs. As of last year, they're in 26 states and drawing 43,000 MWs. At least 200 more large data centers are under construction now.

The typical large data centers that opened in 2017 were about 23 miles from the nearest city center. Those that open this year will be about 27 miles from major metro centers, and those planned to open next year will be 34 miles away.

That means more large centers in less housing-dense places. Those 2017 openings were in areas with about 116 housing units per square mile. That's down to 32 homes per square mile this year.

It also means more data centers in lower-income communities. The median income in ZIP codes hosting new data centers was 25% above the national median income in 2023. This year, it will be just below the national median, and will further decline next year.

There are consequences for such a shift. Data centers in rural areas can expect thinner tax bases, smaller housing markets, and less experience with big infrastructure.

Still, several Fed papers suggest they've boosted sluggish regional economies.

Brian Kassalen, an attorney who leads Baker Tilly's construction practice, noted they've brought wage growth. But data centers have also siphoned skilled labor away from the residential construction market.

While a data center can demand a different kind of electrician compared to a house, the building boom encourages up-skilling that pulls from the homebuilding labor force.

"Hyperscale projects are absorbing labor in an already short labor pool," Kassalen said. "That could translate to higher labor costs and more expensive new builds."

Data center impact on home prices

The oft-cited fear that data centers could lower nearby home values remains tricky to prove. But the Realtor.com economic research team concluded that—so far—home prices near data centers move in line with those that don't have them.

After analyzing 43 ZIP codes, some with new centers and some without, Realtor.com found no statistically significant difference.

There are some caveats. Realtor.com could only track data centers in two years after they opened. In that time, the economic boost from the construction jobs hasn't worn off. And some long-term impacts, like electricity prices and noise, could take longer to bear out.

And the data looks only at states that publicly disclose home sale prices. Texas, one of the nation's most prolific data center developers, isn't in that group.

The other big caveat: The data centers that are coming are much larger than those from before. Some of the major data centers are coming to more rural areas that aren't experienced in dealing with developments of this type. And new strains on water supply could create additional problems.

The data center communities Realtor.com studied have lower residential property tax rates, but those lower tax rates predate the actual data center. The property tax rate eased slightly in the studied areas after the center opened but then rose again later. Why this is the case is difficult to discern.

Growing attention from elected officials

For politicians, one key to the coming midterms is calming residents' anxiety about data center development.

In Virginia, Gov. Abigail Spanberger pushed for data center developers in the state to be responsible for their own infrastructure costs.

Texas Gov. Greg Abbott called for a pause in data center development so the state could conduct an audit of the projects in development. He called for them to offset water and power impacts. Meta, OpenAI, and QTS are among those that have already signed on to comply.

"We welcome Governor Abbott’s leadership and look forward to working with him to establish clear guardrails for the industry and help ensure all providers operate with a commitment to transparency, accountability and responsible growth," QTS co-CEOs Tag Greason and David Robey said in a statement.

For data center developers and technology companies, the mission has been to present a willingness to respond. The data center boom is connected to broader anxieties about the advent of artificial intelligence and its other market impacts.

Meta CEO Mark Zuckerberg acknowledged the linked anxieties in a 6,500-word open letter he called "The Future is for Everyone: The Path to a Positive AI Future."

He likened the data center development boom to the development of the railroads, broadband, and other innovations that turned communities into "centers of research, business, and industry, with population and economic growth that follow.

"We believe AI infrastructure can play a similar role if it is built with strong Community Compacts that build durable assets and reasons for the next generation to build and grow their lives there," Zuckerberg said.