New York Large Data Centers Ban, by the Numbers

Gov. Kathy Hochul will sign an executive order on Tuesday pausing hyperscale data center development in New York, making it the first state to enact such a ban.

The order will bar the state from approving permits for projects that use 50 or more megawatts of power for one year while officials develop a regulatory framework for assessing their impact.

New York has “remained the economic center of the world by embracing change but also demanding that change uplift our people,” Hochul said at a press conference announcing the order. “And today the winds of change have blown in with the force of a hurricane.”

But her remarks were far more measured. The governor appeared to try to thread a fine needle, balancing the competing demands of local governments, taxpayers, utility ratepayers, and even the hyperscale developers themselves.

“I don’t just want New York to be first, I want New York to be first in the right way,” she said.

The moratorium will buy the state time to determine what, exactly, that means. It also gives Hochul, who is up for reelection in November, more time to consider a broader regulatory package passed by the state Legislature last month, which she has not yet signed into law.

Her balancing act casts new light on a conflict playing out in communities across the country. As residents push back against the effects of data center development, state and local governments are being forced to reconsider an industry they spent years courting.

New York’s moratorium is the clearest sign yet that the bargain that fueled the data center boom is beginning to fray. Five numbers help explain why governments embraced these projects in the first place—and why more are now reconsidering what that growth will cost.

This article is adapted from a story that first appeared in a Realtor.com® Substack series. Subscribe for more stories like it.

1. One county gets 45% of its revenue from data centers

To understand what governments hoped data centers would deliver, it helps to look at Virginia. The state is home to an estimated 637 data centers—the highest tally of any state.

And in Loudoun County, VA, data centers generate approximately $1.3 billion in annual tax revenue, or about 45% of the county’s total revenue.

The windfall is perhaps the clearest explanation of why local governments worked so hard to woo these facilities. Data centers can add billions of dollars in reliable, immovable tax revenue without bringing the added costs of expansion.

Few places have embraced that bargain as fully as Virginia. The Old Dominion now accounts for roughly 12% of global data-center capacity, with Loudoun at the center of the buildout. The county had about 20 million square feet of data centers in 2019. Today, it has closer to 50 million, with tens of millions more planned.

Local residents are seeing a clear benefit, too. The revenue from the data centers has kept property tax rates below those of some neighboring jurisdictions—an increasingly powerful political benefit as residential property taxes nationwide have risen 31% since 2019.

2. Developers rushed to claim 113 tax breaks in just 16 days

But that windfall is hardly free, as a recent drama in Arizona helps explain.

The Arizona Commerce Authority received 113 applications for data center tax incentives in the 16-day period ending June 30—nearly matching the 123 applications submitted over the program’s previous 13 years.

The rush came as developers tried to beat the clock before a new three-year moratorium on the incentives took effect. The pause is expected to save Arizona an estimated $57 million—money Gov. Katie Hobbs has promised to be redirected toward services like child care, healthcare, and food assistance.

It’s another example of a state that worked hard to court data centers, then reconsidered the price of doing so. In her 2026 State of the State address, Hobbs framed the issue bluntly:

“It’s time we make the booming data center industry work for the people of our state, rather than the other way around. … We must ask ourselves: Should taxpayers continue subsidizing the data center industry?

“I know my answer,” she continued. “My executive budget will eliminate the Data Center Tax Exemption, putting an end to a $38 million corporate handout.”

An independent analysis confirms Hobbs’ totals. In 2025, Arizona’s data center subsidy cost jumped 98%, rising from $19.4 million a year earlier to $38.5 million.

That complicates both the revenue story playing out in Virginia and the moratorium taking effect in New York. The Grand Canyon state seems to be testing whether data centers will still bring lucrative investments without taxpayers helping to foot the bill.

3. Data centers could consume 12% of U.S. electricity by 2028

But there’s already evidence that local residents are paying the price for data center expansion—and the price is about to go up.

Data centers could consume as much as 12% of all U.S. electricity by 2028, according to an analysis conducted by Lawrence Berkeley National Laboratory for the Department of Energy—a major jump from roughly 4.4% in 2023.

To catch up, utilities are expected to build new power plants, transmission lines, substations, and other infrastructure—all costs that are most often passed on to ratepayers.

In Northern Virginia’s data center corridor, that could mean electricity bills rise by more than 25%, according to recent modeling from Carnegie Mellon University. Nationally, costs are expected to surge 8%.

It’s a far more personal manifestation of the same pressures facing Arizona. But instead of playing out in state budgets, this is landing directly in ratepayers’ wallets.

Hochul put that risk at the center of her announcement.

“These hyperscale AI data centers consume enormous amounts of power, truly threatening to outpace our grid’s capacity, and they drive up costs for local ratepayers,” she said. “I refuse to let those costs be passed on to New Yorkers, who already pay too much for their utility bills.”

Nationwide, residential electricity customers had their service shut off 13.4 million times in 2024 because of unpaid bills, according to the U.S. Energy Information Administration. Texas—home to the second-highest total of data centers in the country—recorded the most shut-offs, with more than 3 million residential electricity disconnections.

4. Growth could require $58 billion in water infrastructure

U.S. data center growth could require as much as $58 billion in additional public water-system capacity by 2030, according to a recent UC Riverside study.

It’s another iteration of the same problem facing the electrical grid: The systems that deliver this precious resource today can’t keep up with the projected needs of tomorrow. But water presents a harder problem than power.

“Even if you have money, the water source is another challenge,” Shaolei Ren, the study’s lead researcher, said in a press release. “In many cases, the water is naturally replenished by snowpack and reservoirs. But reservoirs and snowpack are limited. You may have money to build treatment plants and pipes, but money can’t buy more snowpack.”

That warning is already playing out in Newton County, GA, where Meta’s $750 million data center uses about 500,000 gallons of water a day—roughly 10% of the county’s supply.

That’s left some residents like Jeff and Beverly Morris living with taps that spit out brown sediment, while their dishwasher, washing machine, and even toilets have failed repeatedly since construction on the data center began in 2019.

“It feels like we’re fighting an unwinnable battle that we didn’t sign up for,” Beverly told the New York Times, adding that they have spent $5,000 on repairs and cannot afford the $25,000 needed to replace their well.

The county is now projected to face a water deficit by 2030. Local officials have already had to weigh rationing and approve a 33% rate hike over the next two years—far above the county’s usual 2% annual increase.

5. A power line serving data center growth could cross 330 properties

Just 50 miles across county lines in the Peach State, the infrastructure needed to meet surging electricity demand could cut across at least 330 properties—and force up to 30 homes to be torn down entirely.

Georgia Power has plans for a 35-mile, 500-kilovolt transmission line connecting a Fayette County substation to a plant in Heard County. The utility provider says the line is part of a broader effort to strengthen and expand the electric grid as the state’s power needs grow, including at least one data center.

That puts the fight in a legally and politically complicated place. Transmission lines have long been treated as public infrastructure, and as a result, utility companies are sometimes granted eminent domain authority to build the lines needed to keep power moving.

But the data center boom is making that bargain harder for some homeowners to accept. When new grid capacity is being driven even in part by AI, landowners are left asking whether they’re giving up private property for the public good—or for the growth of private companies.

For Ansley Brown, the answer could determine the fate of the family home they’ve lived in for more than two decades. Brown’s home is among the properties being seized by eminent domain and expected to be torn down.

“This is a real David and Goliath story in my opinion,” she told 11Alive. “We’re going against a $2 billion power company for our home.”

Georgia Power has argued the project is needed to serve homes, businesses, and other power users (not just data centers), and the company says it’s working with affected property owners to determine just compensation.

But the conflict offers perhaps the most intimate version of the trade-off dividing communities across the country. When residents absorb higher bills, strained public resources, or even the loss of their property, what should they receive in return—and who gets to decide whether the bargain is worth it?

New York may be the first to offer an answer. Hochul has directed Empire State Development to deliver guidance that local governments can use to negotiate community benefits from large-scale data center projects within 60 days.