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0 Share Newsweek is a Trust Project member See more of our trusted coverage when you search. Prefer Newsweek on Google to see more of our trusted coverage when you search. Ladies and gentlemen of the American towns now being measured for server farms, transmission lines and windowless buildings full of humming machines: the cavalry is not coming. The data centers are.
The data-center boom is already pushing into communities that did not ask to become the plumbing of the artificial-intelligence economy. But towns facing new demands on their land, power grid and water systems also have leverage: if they negotiate hard enough, the facility that residents fear could actually help lower property taxes, fund teacher bonuses, protect electric ratepayers and cover infrastructure costs before households are asked to pick up the tab.
"Property taxes are an extremely large expense for most homeowners," Yair Klyman, founder of Klyman Financial , told Newsweek . "What data centers do is bring commercial tax revenue and significant tax revenue from equipment into areas that might otherwise rely much more heavily on residential property taxes."
He points to Loudoun County, Virginia, where the concentration of data centers has helped fund schools, roads and other public services while allowing the county to maintain comparatively low property-tax rates. This helped propel it to second place overall on Newsweek 's American Dream Index.
That is all to say: data centers are certainly not automatically good for communities…but they are good when communities make them pay their own way.
Data centers are unusual taxpayers because they bring billions of dollars’ worth of equipment and infrastructure without new students, commuters or families who need local services. Although that can be a windfall for homeowners in theory, the result may be very different unless residents and officials negotiate carefully.
If local officials are serious about making a deal, they should be able to answer three simple questions: How much will homeowners save? When will they save it? And what happens if the company scales back or never builds what it promised?
Simply put: no residential tax relief, no victory lap.
Neighbors should ask for something concrete instead, like teacher retention bonuses, classroom grants, HVAC upgrades, special education funding, a permanent stream of money that parents and teachers can actually point to. Teacher bonuses are especially useful politically because they turn a remote industrial project into something residents can see.
Klyman argues that when communities capture that new commercial tax base instead of giving it away through incentives, the benefits can become visible quickly. More revenue can mean better-funded schools without asking homeowners to shoulder another tax increase.
If a company wants access to your land, your power grid and your community's goodwill, it should help pay for the institutions that make that community worth living in.
Electricity is where the deal can either protect residents or betray them.
A data center may require new substations, transmission lines and other expensive grid upgrades that someone must pay for…but who is that someone? One thing is for sure: it should not be homeowners.
If the project creates new costs, the project itself should bear them and not families and small businesses who never asked for a giant server farm next door. Regulators have tools to make that happen, but communities have to demand those protections before construction begins, not after the bills arrive.
A data center may require water-system upgrades, road improvements during construction, new emergency-response planning, noise mitigation, stormwater controls and backup-power oversight. Those costs should be priced before approval, not discovered after the ribbon-cutting.
The cleanest version is an upfront impact payment or escrow account tied to measurable burdens: megawatts, gallons, truck trips, acreage, backup generators and public-safety needs.
This is where "community benefit" has to mean more than a scholarship check or a ceremonial donation: the company should pay for the strain it creates and the public should be able to audit the math.
Taxes aren't the only thing communities should negotiate for.
Data centers also create technical, high-paying jobs—from electrical and mechanical technicians to network specialists and facility operators. While they won't employ thousands of people like a factory might, the jobs they do create tend to pay well and require specialized skills.
"These jobs are very technical," said Klyman. "They can provide an area that doesn't necessarily have the infrastructure for good-paying jobs with better employment."
That doesn't mean officials should accept vague promises about economic development. It means workforce training, local hiring commitments and apprenticeship programs should be part of the deal from the beginning.
The one thing to keep in mind is that data centers aren’t doing towns a favor. If anything, the opposite is true: they are there because they are the ones who need the land, the electricity and the permits—which means that communities may have leverage because these facilities cannot be built just anywhere. Towns should negotiate with that truth in mind.
A good agreement leaves residents better off: lower taxes, protected electric rates, stronger schools and infrastructure paid for by the project that created the need. A bad agreement leaves everyone else subsidizing one of the richest industries in the world.
The only question worth asking, then, is: after everything is built and the bills come due, are families in the area better off than they were before? If not, the town isn’t really hosting the future but actually paying for it.
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