Data Centers: Do they help or destroy towns?

Data centers can have a complex impact on the towns they’re built in, offering economic benefits like increased tax revenue while also posing challenges such as environmental strain and noise pollution. Below are some examples of towns that have welcomed data centers, along with an analysis of their effects based on available information and trends.

Examples of Towns with Data Centers

1. Quincy, Washington
   • Context: Quincy, a small rural town, became home to Microsoft’s Columbia Data Center in 2006, one of the largest in the world at 470,000 square feet. Other tech giants like Yahoo and Dell followed, turning Quincy into a data center hub.
   • Tax Revenue Impact: Data centers have significantly boosted Quincy’s tax base. These capital-intensive facilities generate substantial property tax revenue despite employing relatively few people (often fewer than 30 per facility). For a small town, this influx can fund infrastructure and public services without the proportional strain of a large population increase. Studies suggest a $1 billion data center can yield over $200 million in economic and fiscal impact over a decade, far exceeding what traditional employers with hundreds of jobs might bring.
   • Environmental Impact: The environmental cost is notable. Data centers in Quincy consume vast amounts of electricity—drawn from the region’s hydroelectric dams—and water for cooling. While hydropower is cleaner than fossil fuels, the sheer scale of consumption strains local resources. Backup generators, often diesel-powered, add emissions during testing or outages.
   • Noise Levels: Residents have reported noise from cooling systems and generator tests, though Quincy’s rural setting means fewer people are directly affected compared to urban areas. The constant hum can reach 55-85 dBA near facilities, disruptive but below levels causing immediate hearing damage.
   • Overall Effect: Quincy has likely benefited more than it’s suffered. The tax revenue has supported local development, and the low population density mitigates some environmental and noise downsides.
2. Boardman, Oregon (Morrow County)
   • Context: Amazon Web Services (AWS) has built at least five data centers around Boardman, a town of about 4,200 people surrounded by farmland.
   • Tax Revenue Impact: In 2023, AWS paid roughly $34 million in property taxes and fees after receiving a $66 million tax break. This revenue has funded a new fire engine, a school resource officer, and homebuyer grants totaling $2.8 million, directly improving local infrastructure and services. However, some former county commissioners argued the tax breaks were too generous, suggesting the town could have negotiated more.
   • Environmental Impact: The data centers strain the local power grid and water supply, critical in an agricultural region. Diesel generators for backup power emit pollutants, and water usage for cooling competes with farming needs, raising sustainability concerns.
   • Noise Levels: Backup generator tests (typically under 100 hours annually) produce noise levels around 85-100 dBA, audible to nearby residents. While not constant, this has sparked complaints about quality of life in an otherwise quiet rural area.
   • Overall Effect: Boardman has seen tangible financial gains, but the environmental trade-offs and modest job creation (data centers often employ fewer than 100 people directly) leave some residents questioning the net benefit.
3. Loudoun County, Virginia (near Ashburn)
   • Context: Often called “Data Center Alley,” Loudoun County hosts over 100 data centers, including facilities by Google and others, due to its proximity to internet infrastructure and Washington, D.C.
   • Tax Revenue Impact: In 2024, Virginia’s governor highlighted that data centers brought in $1 billion in state tax revenue, with Loudoun reaping a significant share. Property taxes from these facilities fund schools and roads, though tax incentives often reduce the initial haul.
   • Environmental Impact: The region’s 25 million square feet of data center space consumes massive electricity—projected to double by 2030—often from a grid reliant on fossil fuels, increasing greenhouse gas emissions. Water usage for cooling further stresses local resources.
   • Noise Levels: Noise from cooling fans and generators (up to 96 dBA inside facilities, less outside but still noticeable) has led to community pushback, especially as facilities encroach on residential areas. Some residents near newer projects, like the proposed Plaza 500 in nearby Fairfax County, cite sleep disruption and stress.
   • Overall Effect: Economically, Loudoun thrives, but growing pains include environmental degradation and noise complaints, suggesting a mixed outcome as residential areas expand near data centers.

Do Data Centers Help or Worsen Towns?

• Helpful Aspects:
  • Tax Revenue: Data centers often provide a fiscal windfall disproportionate to their footprint. Unlike traditional industries, they don’t require large workforces, yet their high property values generate steady tax income. Quincy and Loudoun demonstrate how this can fund public goods without overwhelming local services.
  • Indirect Jobs: Construction phases and tech support roles create temporary and some ongoing employment, as seen with Google’s 2,730 indirect jobs in Loudoun.
  • Digital Hub Potential: A single data center can attract others, potentially transforming a town into a tech node, as in Quincy.
• Worsening Aspects:
  • Environmental Strain: High energy and water use, plus emissions from backup systems, challenge sustainability. In Boardman, this pits data centers against agriculture, a core local industry.
  • Noise Pollution: Levels from 55-100 dBA disrupt nearby residents, particularly during generator tests. In denser areas like Loudoun, this fuels opposition.
  • Limited Direct Jobs: With fewer than 100 jobs per facility (e.g., Google’s 150 in Loudoun), data centers don’t match the employment impact of traditional employers, disappointing towns expecting broader economic growth.

Conclusion

Data centers tend to help towns financially by boosting tax revenues, often outweighing their modest job creation. However, they can worsen environmental conditions and quality of life through resource consumption and noise, especially in denser or resource-scarce areas. Rural towns like Quincy and Boardman gain more relative to their size and lower population density, while places like Loudoun face trade-offs as growth nears residential zones. The net impact depends on how towns negotiate tax deals, manage environmental mitigation, and balance community concerns—data centers aren’t a universal boon or bane, but a double-edged sword shaped by local context.