Powering Progress? Data Centers & Community Development
As data centers reshape the digital economy, they're also reshaping the communities that host them. This webinar explores the intersection of data center growth and community development, including job creation, infrastructure investment, energy demands, land use, and local economic impact. The three panelists discussed how data centers affect local economies, how communities can balance energy and water demands with local needs, and what questions residents should consider when evaluating data center development.
Alison Davis, University of Kentucky – Data Centers, Just the Facts!
Alison Davis provided an overview of the current data center landscape, describing five types of data centers: enterprise, co-location, cloud, hyperscale, and edge. She noted that while approximately 87% of data centers have historically been located in urban areas, about two-thirds of planned data centers are expected to be located in rural communities. Davis highlighted the growing concentration of data centers in states including Virginia, Texas, California, and Georgia, and identified reliable power and infrastructure, stable climate, internet connectivity, and policies and incentives as important factors influencing where data centers are developed.
Davis outlined several potential community impacts, distinguishing between areas where there is evidence and those where more research is needed. Data centers have the potential to create significant construction employment, a smaller number of higher-wage permanent jobs, and positive impacts on local tax bases, depending on incentives and tax agreements. At the same time, they require substantial land, electricity, and water and can generate noise and waste heat. Davis emphasized that the broader effects on housing affordability, property values, and wildlife populations remain uncertain, with research not yet conclusive on these community outcomes.
Mark White, University of Illinois Urbana-Champaign – Public Concerns about AI/Data Centers: Survey Findings
Mark White presented findings from the Gardner Food and Agricultural Policy Survey examining public perceptions of AI and data center development. Survey questions conducted in February and August 2026 focused on concerns related to electricity costs, water use, and agricultural land. White reported that concern increased across all three issues during this period, with rising electricity costs remaining the greatest concern. Respondents in rural communities reported the highest levels of concern across the issues, while concerns also increased substantially in other community types.
The August survey also examined perceived benefits, including increased local tax revenue, job creation, business opportunities, and infrastructure improvements. White noted that optimism about these benefits was more limited than concern about potential challenges, with local tax revenue viewed as the greatest potential benefit across community types. He emphasized that public perceptions can be shaped by a lack of transparency and context, particularly when development moves quickly. White also highlighted the importance of community capacity, noting that smaller communities may have fewer resources and less technical expertise when negotiating with developers, and encouraged communities to understand proposed projects and ask the right questions.
Tom Beresnyak, Penn State Extension Energy Team – The Rural Shift: The Future of U.S. Data Centers
Tom Beresnyak discussed the shift toward data center development in rural communities and the infrastructure requirements that make certain locations attractive. He emphasized that while many existing data centers serve nearby users and require proximity to population centers, approximately 67% of planned facilities are expected to be located in rural areas. Beresnyak highlighted land availability, reliable power, natural gas resources, transmission infrastructure, and connectivity as factors influencing development, and described how Penn State Extension has developed a community guide to help residents understand data center terminology, infrastructure requirements, economic impacts, and environmental considerations.
Beresnyak also discussed community engagement and community benefit agreements as tools for addressing local priorities. He explained that legally binding agreements can establish measurable requirements related to issues such as noise, energy use, water systems, roads, and community investments. He highlighted research underway to address data center energy and cooling challenges, including the potential use of abandoned mine water for heat exchange and digital-twin technology aimed at reducing cooling costs and energy use.
This program is supported in part by the Agricultural and Applied Economics Association.