People Power vs. Streaming Power: Why The Data Center Backlash Is Becoming A Legal Risk Developers Cannot Ignore

On June 2, 2026, the residents of Monterey Park, California, used their ballots to overwhelmingly oppose the prospect of a data center project ever being constructed in their city. Measure NDC (Community Act Prohibiting Data Centers) was endorsed by 88.1% of the City’s eligible voters as of the date of this article. The Measure requires the adoption of an ordinance amending the City’s Land Use and Urban Design Element of its general plan to prohibit data center construction within the City limits. In advocating for the passage of Measure NDC, the Monterey Park City Council urged residents to protect their water, air quality, neighborhoods, quality of life, and future generations by voting to support the first-in-the-nation ban.

Community Opposition is Growing

What is interesting, though, is that the Monterey Park ordinance is not unique: Across California and indeed across the United States, people, politicians, and environmental activists are all aligning with one voice to oppose the prospect of a data center being built in their area. Multiple bills (Senate Bills 886 and 887, Assembly Bills 2619 and 1577) are making their way through the California legislature that would address concerns about rising costs and environmental impacts associated with data center construction and operation. Following the Monterey Park vote, the City Council of the City of Perris, California, unanimously voted to move forward with a city-wide ban on data centers, and after previously approving a large data center project, on June 16, 2026, the Board of Supervisors in Imperial County approved an interim urgency ordinance that effectively pauses the previously approved development.

The nationwide groundswell of citizens pushing back against data centers, with many people emphatically saying “not in my backyard,” is only getting louder. Colorado, Illinois, North Carolina, Michigan, Oklahoma, Utah, Ohio, New Jersey, and Mississippi are just some of the states where people and politicians are actively opposing the prospect of data centers being located in their region, or, in the case of Mississippi, suing a data center for environmental impacts. Data from recent Gallup polling shows that 7 in 10 Americans oppose the construction of data centers in their local area, with approximately 48% of those polled saying they are “strongly opposed.”

Why the Controversy?

You may be wondering what data centers are and why they are so polarizing. Anyone who uses Google, streaming services, cloud storage, an artificial intelligence application, or plays any one of a multitude of online games has likely benefited from a data center. Data centers are facilities that house hardware for building, running, and delivering computer applications and services, along with storing and managing the data associated with those applications and services. These facilities are essential for the rapid processing and long-term storage of the incredible amount of data required for applications to run quickly and efficiently. While data centers can be compact, the development of numerous hyperscale data centers has prompted scrutiny and attention to the issues this land use creates. Currently, there are over 4,000 data centers throughout the United States, with Virginia and Texas leading the way in location counts.

Key factors feeding into opposition forces include the demands that data centers place on electrical infrastructure and water supply. As of 2023, data centers consumed approximately 4.4% of the nation’s electric power, and that number continues to grow. In terms of the water impact, some larger data centers can require up to 5 million gallons of water per day, most of which goes to cooling the buildings and the hardware inside. Other concerns include noise impacts (noise generated from the cooling equipment, servers, and generators can combine to reach levels of 85-100 dBA) and general site selection issues, which create additional challenges for developers looking for siting options.

Incentives are Receiving Greater Scrutiny and are Disappearing

Another factor fanning the data center opposition is the amount of tax breaks and incentives being offered to developers. Ohio recently suspended a tax break that had been instrumental in attracting new developments. Joining Ohio, Illinois has also suspended tax breaks for data centers. Arizona politicians have reached a budget compromise that includes no new tax exemptions for the next three years. Other states have tried but not succeeded (so far) in passing bills to completely repeal existing data center tax incentives.

Land Use Regulations are Appearing

In response to the continued proliferation of data center proposals, many cities, counties, and even states are working to catch up to the building boom by creating and implementing zoning and development standards (see, for example, The National Association of Development Organizations resource page) for future data center projects. In the meantime, those same jurisdictions are imposing moratoriums on new applications or permits for data centers until the land use regulations can catch up to demand.

What Should Data Center Developers Do?

So what can data center developers do? As community opposition grows, developers and landowners should take a proactive approach to planning and stakeholder engagement:

• Engage Early and Often. Land use control remains fundamentally local. Early and often contact and communication with local decision-makers is essential.
• Expand Due Diligence. Developers should evaluate more than existing general plan and zoning designations. Reliance on general plan land use or zoning designations must be tempered by changing attitudes and the risk of moratoriums. Due diligence must include a full evaluation of available resources, including electric and water infrastructure, transmission facilities, and redundancy planning.

Projects like the proposed West Texas data center, which is partnering with Chevron to make provisions for all needed power for the data center use are going to be preferred. The more developers can early identify, plan for and mitigate project-needs and impacts, the better.

• Design and Aesthetics Are Important. Designs for any proposed data center need to account for height restrictions, mechanical screening for rooftop equipment, noise attenuation and abatement measures, and efficient cooling infrastructure. The building’s appearance needs to be aesthetically planned to include façade variation and landscaped screening.
• Design With Community Concerns In Mind. Project design should proactively address concerns raised during due diligence and community meetings (which should be started early in the planning process). Incorporating mitigation measures early in the process can strengthen community support and improve prospects for a successful hearing process.

Another factor to consider is the future: what happens as the need for data centers shrinks, both in terms of size and number of facilities. How will data centers evolve with technology improvements, and what will the future use of these large-scale projects be when so much space and so many resources are no longer required? Reuse planning is essential.

• Demonstrate Local Benefits. Any proposed development (and this is universally advisable) must include a robust and real community benefits analysis: Maybe the data center can upgrade infrastructure for the wider area; perhaps a renewable energy source or battery storage can be used to supplement and add to the local grid; are water demands being mitigated to the fullest extent feasible and possible (is there an alternative to using water as a coolant); will jobs be offered to locals first; and what kinds of disclosures and updates will the facility provide to residents on an annual basis.

Data centers are fundamentally seen as beneficial for areas far beyond where they are sited, so making benefits local and making those local benefits commensurate with the burdens these projects impose is important.

Looking Ahead

The conversation around data centers and development impacts is not going away anytime soon. As demand for artificial intelligence improvements, cloud computing, digital infrastructure, and streaming speed increases, so too does the need for more data centers.

There is little question that data centers provide regional, national, and global benefits, but at what local costs? The bottom line is that data centers are becoming a stress test for local land use authority and control. When all the community can see is the burden, then the benefits, regardless of significance, will not be acknowledged.

Developers who anticipate those concerns early and incorporate them into project planning will be better positioned to navigate the evolving regulatory, political, and local community landscapes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.