Yes—data centers can bring valuable property-tax revenue and construction spending, especially to a town seeking a stronger tax base. But residents may still oppose them because the benefits are often narrow or uncertain, while the burdens—noise, land use, heavy electricity demand, water use, diesel backup generators, and major utility construction—are experienced locally and immediately.wri+1
A modern, very large data center can use an extraordinary amount of electricity, and it needs continuous, highly reliable power. U.S. data centers used about 4.4% of national electricity in 2023, and demand is projected to rise substantially; that can mean new substations, transmission lines, generators, and pressure to add generation capacity.energy+1
Common local concerns include:
Higher or less reliable utility service: Residents fear that grid upgrades or scarce power will ultimately raise rates or crowd out housing and ordinary businesses.
Water: Some facilities use substantial water for cooling, which matters greatly in areas with drought risk or constrained municipal supplies. National estimates put direct U.S. data-center water consumption at roughly 17 billion gallons in 2023.pewresearch
Noise and air pollution: Cooling equipment runs continually, and diesel generators may be tested regularly or run during outages.
Land and community character: A large, windowless industrial building, plus electrical infrastructure, may conflict with a residential, rural, historic, or downtown development plan.
Few permanent jobs: Construction employment can be significant, but once operating, a highly automated center generally employs far fewer people than a factory, hospital, office campus, or mixed-use project of similar tax value.
Distrust of the deal: Tax abatements, nondisclosure agreements, or vague claims about power and water use can make people feel that officials have committed the town before residents received clear information.brookings
It can—sometimes very substantially. Data centers can add taxable real estate, create construction work, purchase local services, and diversify a town’s revenue base through property, sales, and use taxes.wri
The key issue is net benefit, not gross revenue. A project may look lucrative on paper but be a weak deal if the town gives a long tax exemption, bears road or public-safety costs, loses developable land that could host more job-rich businesses, or absorbs infrastructure risks without enforceable developer payments.
A town should ask for a transparent fiscal analysis:
Usually, yes—principally through its land-use and zoning powers—but the answer depends on state law, existing zoning, and whether the applicant has already gained legal rights. Some states are moving to limit local control, so the precise authority must be checked locally.tandfonline
In Connecticut, local zoning remains particularly important; towns have used special-permit rules, size limits, and moratoria while they develop regulations. Recent Connecticut reporting described municipalities restricting facilities above 12,500 square feet, while Bristol created routes for approval only in specified business and industrial zones.ctinsider+2
A town can generally:
Prohibit the use in certain zones or allow it only in carefully selected industrial areas.
Require a special permit or site-plan approval, with public hearings and findings that the proposal meets stated standards.
Adopt a temporary moratorium to study impacts and write rules before applications proceed.
Set performance standards: maximum noise, setbacks, landscaping and visual screening, limits on generator testing, truck routes, lighting rules, and decommissioning requirements.
Require disclosure and independent review of projected power, water, wastewater, traffic, emissions, and noise.
Condition approval on enforceable agreements: developer-funded infrastructure, tax-payment agreements, water restrictions, emergency plans, monitoring, and financial security for cleanup or removal.
A town generally cannot reject a proposal simply because residents dislike it. If the use is already permitted and the developer complies with the applicable rules, an arbitrary denial can invite a lawsuit. The strongest approach is to adopt clear, evidence-based rules before a particular application is decided.
The choice need not be “welcome anything” or “ban everything.” A town can permit data centers only where infrastructure is adequate, make the developer pay full marginal upgrade costs, require public reporting of water and electricity use, limit noise and generator emissions, and insist on a tax agreement that produces a real net gain.
That approach recognizes the genuine fiscal opportunity while ensuring that a private company—not local households—carries the costs created by an unusually resource-intensive facility.brookings+1