Investment in AI data centers is surging at an unprecedented pace, particularly in rural areas, as demand for the infrastructure powering the latest AI technologies continues to grow. The new Opportunity Zones program could further accelerate data center development in rural communities, making it critical that these projects are community-led and designed to address their growing financial and resource demands, according to a new report from the National Community Reinvestment Coalition (NCRC).
“We’ve seen a lot of recent coverage around communities fighting back against data center development on their lands, and that’s not surprising to those of us who work in community development,” said NCRC’s President and CEO Jesse Van Tol. “People talk. They hear about neighboring communities dealing with a whole swath of problems, including increased utility prices, after a new data center comes online. The tech companies would be wise to take a page from financial institutions and work with communities, not against them.”
The report found that the current AI data centers being developed are larger and more resource-intensive than other traditional data centers, making them more expensive to build and operate while also introducing numerous costs on community life, the environment and natural resources.
However, rural policymakers are facing years of disinvestment and population declines that have diminished local tax revenue. Without alternative economic development initiatives, the report found that local leaders have accepted AI data centers to maintain financial stability despite their various negative effects and widely-held opposition within the community.
To ensure the Opportunity Zones program doesn’t become a creator of rural AI data center hotspots, the report calls for place-based economic development incentives that ban or condition data center permitting in rural areas on developers’ alignment with community planning goals and the provision of additional development incentives.
“The placement of a data center should be something that happens with, and not to, the community,” said report coauthor and NCRC’s Principal Research Dr. Bruce Mitchell. “We hope that the report and map enable low- and moderate-income communities to get a better sense of their vulnerability to data center placement under the Opportunity Zone 2.0 program.”
The full report is available here.
