Benefits and Drawbacks of Data Centers

Every time you stream a video, process a payment, or ask an AI a question, that request travels to a physical building somewhere — humming with servers, drawing enormous amounts of power, and sitting squarely in someone's backyard. Data centers are the unglamorous backbone of the digital economy, and communities across the country are being asked to host them. The question isn't whether they matter; it's whether the trade-offs are worth it.

WSBT 22's month-long investigation into data centers and their impact on local communities put a spotlight on a debate that infrastructure developers, local governments, and residents are having everywhere from rural Indiana to suburban Virginia. The answer, as it turns out, is genuinely complicated.

What a Data Center Actually Is — and Why It's Everywhere Now

Strip away the jargon, and a data center is essentially a warehouse full of computers. Rows of servers store and process data, connected by high-speed networks, kept cool by industrial HVAC systems, and backed up by redundant power supplies. They range from small facilities serving a single company to hyperscale campuses spanning millions of square feet — the kind Amazon, Microsoft, and Google build.

What's driving the surge in new construction isn't just cloud computing; it's AI. Training and running large language models requires exponentially more compute than traditional workloads, and that demand is translating directly into data center development at a pace the industry hasn't seen before. By some estimates, global data center capacity needs to double within the next five years just to keep up.

That pressure to build fast and build big is landing on communities that may have never thought much about server infrastructure before.

The Economic Case: Real Money, Real Jobs — With Caveats

Local officials tend to greet data center announcements with enthusiasm, and there are legitimate reasons why. The tax revenue argument is straightforward: these facilities are capital-intensive, often representing hundreds of millions or even billions of dollars in assessed property value. For a county with a modest tax base, a single large data center can meaningfully shift budget math.

Job creation is trickier. Data centers do create employment — construction jobs during the build phase, and then permanent positions in operations, security, facilities management, and IT. But the ratio of square footage to headcount is stark. A facility that occupies 500,000 square feet might employ 50 to 200 permanent workers. Compare that to a manufacturing plant of similar size, which might employ thousands. The jobs are real, but communities banking on data centers to transform local employment markets are likely to be disappointed.

That said, the indirect economic effects deserve credit. Data centers attract fiber infrastructure, stabilize local power grids as anchor customers, and can make a region more attractive to tech-sector tenants who want to locate near reliable connectivity. Northern Virginia's dominance as a data center hub — it hosts roughly a third of the world's data center capacity — has reshaped the entire regional economy in ways that go well beyond the facilities themselves.

The smarter question for local governments isn't "will this create jobs?" It's "what are we giving up to get them?"

The Real Costs: Power, Water, and What the Brochure Doesn't Mention

Here's where the data center pros and cons calculus gets uncomfortable. These facilities consume enormous amounts of electricity — a hyperscale campus can draw 100 to 500 megawatts or more, equivalent to the power consumption of a small city. That load doesn't disappear into the ether; it has to come from somewhere, and in many regions, it's straining grids that weren't designed to handle it.

Water use is an underappreciated issue. Many data centers use evaporative cooling systems that consume millions of gallons annually. In water-stressed regions, that's not a trivial ask. When a community is weighing data center development, the conversation about resource consumption needs to happen before the ribbon-cutting, not after.

The environmental impact on communities isn't hypothetical; it's a function of where power comes from and how infrastructure is stressed. A data center powered by renewable energy on a robust grid in a water-rich region is a very different proposition than the same facility in a drought-prone area served by a coal-heavy utility. Location specifics matter enormously, and broad claims about "green data centers" deserve scrutiny.

Noise and land use are less dramatic but still real. Large generators, cooling towers, and 24/7 operations don't make for quiet neighbors. And once a parcel is committed to data center use, it's committed — these aren't facilities that pick up and move.

Finding the Middle Ground: Community Engagement Isn't Optional

The communities that have navigated data center development most successfully share a common thread: they treated the negotiation as exactly that — a negotiation, not a formality. Zoning approvals, tax abatements, and utility agreements all represent leverage points. Used well, they can translate corporate investment into genuine community benefit.

Concrete asks matter more than vague commitments. Workforce development agreements that prioritize local hiring. Infrastructure investments — road upgrades, grid improvements — that benefit the broader community. Binding sustainability requirements, not just stated intentions. Some municipalities have negotiated data-sharing agreements that give them visibility into actual power consumption and water use, creating accountability rather than relying on self-reporting.

What rarely works is rubber-stamping a project under political or economic pressure and hoping it turns out well. The communities with the most regret tend to be the ones that moved fastest and asked the fewest questions.

Community infrastructure planning also needs to account for the cumulative effect. One data center is manageable. Five in the same corridor — which is increasingly common as developers cluster near power and fiber — creates a different kind of burden on roads, emergency services, and utilities.

The Path Forward: Sustainable by Design, Not by Accident

The good news is that the industry is evolving, partly by necessity. Hyperscalers have committed to ambitious clean energy targets, and the economics of solar and battery storage are making on-site or directly contracted renewable power increasingly viable. Liquid cooling technology is improving efficiency and reducing water consumption. Some facilities are exploring waste heat recovery — using server exhaust to heat nearby buildings — though this remains more pilot program than standard practice.

The more important shift is happening in how local economies think about community infrastructure planning when data centers are involved. Forward-thinking jurisdictions are treating data center development not as a one-time transaction but as an ongoing relationship, with regular reporting requirements, built-in review periods, and genuine channels for resident input.

The facilities being built today will still be operating in 2045. The decisions being made in planning commissions right now will outlast every elected official in the room.

That's the frame that changes the conversation. Data centers aren't just economic development wins or environmental liabilities — they're long-duration infrastructure commitments that reshape what a community looks like for decades. Treating them with that level of seriousness, from initial proposal through ongoing operation, is what separates communities that capture real value from the ones that end up with buyer's remorse.

The data center boom isn't slowing down. If anything, AI-driven demand is accelerating it. The communities that get this right won't be the ones that said yes fastest; they'll be the ones that asked the best questions.

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