Data Centers Spark Homeowner Fears Over Rising Electric Bills

Real estate professionals and their clients are expressing significant concerns regarding the proliferation of data centers, particularly their potential to drive up electricity costs and impact property values. A survey released on Wednesday by the National Association of Realtors (NAR) found that approximately 61% of NAR members reported their clients were worried about data centers leading to higher energy expenses. Furthermore, 56% of agents noted concerns related to water usage by these facilities. Additional anxieties cited by respondents included fears of environmental contamination (43%) and the aesthetic impact on the immediate landscape (32%).

Despite these widespread worries about utility costs and environmental factors, opinions among real estate agents on the direct impact of data centers on home values remain divided. The NAR survey indicated that about 25% of agents surveyed anticipated a positive effect on residential property values, while 22% perceived a negative impact. NAR Chief Economist Lawrence Yun emphasized that the effect is not uniform, stating, “There is no single data center effect. Instead, the story varies significantly depending on the local market.” Yun further elaborated that the sheer number of data centers does not definitively predict outcomes for home values, job creation, or utility expenses.

This sentiment aligns with recent research from Realtor.com, which has also investigated the influence of data centers. That research observed a trend of data centers increasingly being established in rural areas. While data centers do influence property taxes, their effect on the average homeowner's tax burden is complex and not always straightforward. The Realtor.com study, which specifically examined large facilities in the two years following their opening, found no discernible impact on property values. However, this specific finding is limited by its focus on a short timeframe and large-scale installations.

The growing presence and impact of data centers have become a notable issue, even emerging as a point of contention in political discourse, with surveys indicating public disapproval. Lawmakers are actively considering regulatory measures to address the industry's effects on energy prices, the environment, and the real estate market. Interestingly, NAR's findings also suggest a correlation between the concentration of data centers and higher home values. Counties with ten or more data centers exhibited a median home value of $431,750, substantially higher than the $174,500 median in counties without any data centers. Over a decade, from 2014 to 2024, counties with significant data center presence saw their home values increase by 95%, compared to a 64% increase in counties without data centers. This correlation, however, does not definitively establish causation.