AI data centers are transforming rural land markets, fueling a backlash

At a data center protest in Lubbock, Texas, in July, state Agriculture Commissioner Sid Miller took to the microphone to share his concerns about data center land grabs in his home state. But what he said may apply to what’s happening in dozens of states across the country.

“When[data centers]first started coming up, nobody knew much about data centers,” he said at the protest. “We quickly learned that they were taking over our best farmland. … And (developers) sometimes give 10 times the value, so it’s hard for farmers to turn it down.”

Across the country, investment in computing power spurred by new technologies in artificial intelligence is triggering a commercial land rush, sending real estate values ​​soaring in unlikely and remote locations.

AI data centers house large computer servers packed with powerful chips and systems needed to run AI models and workloads. The centers require huge amounts of electricity and water to power and cool the servers, and their large footprints require vast amounts of land.

Companies are racing into rural America to build not just data centers, but facilities for the companies that build and service data centers. Across the country, entire secondary economies are springing up around technology construction sites, creating booming towns and transforming land use.

In many cases, this transformation pits some of America’s largest corporations and their Wall Street supporters against local residents and communities struggling with new competition for their space, infrastructure and natural resources.

U.S. land purchases for future data centers reached nearly $6 billion in the first half of 2026, up 79% from a year earlier, according to commercial real estate firm Avison Young.

This year, data centers account for 27% of the U.S. development footprint. The company says this is the second-highest category after apartment buildings and ahead of industrial buildings, office buildings, retail space and mixed-use developments.

It’s just the data center itself. Commercial development in directly related industries, such as water and power plants, and indirectly related sectors, such as construction of housing for workers, is likely to increase the total share of AI-driven land investment.

Comprehensive local real estate price data related to data center and related industry construction is difficult to obtain. However, several reports and analyzes show that commercial real estate values ​​are skyrocketing in major data center regions.

This is especially true for properties that have reliable access to the local electricity grid. Last year, land costs in Northern and Northeastern Virginia exceeded $8 million per acre, according to real estate firm CBRE.

Reports of developers quoting prices for electrified land far above the normal price are becoming almost common, despite the applicability of targeted locations.

In Loudoun County, Virginia, a data center developer reportedly offered $4.4 million per acre for land.

The National Association of Home Builders’ July briefing cited data showing that the median land value in Loudoun County was $125,000 per acre in 2025, and said, “The median land value in Northern Virginia is nowhere near those numbers.”

“Homebuilders cannot bid in that market because their land budgets are limited by what homebuyers are willing to pay,” NAHB said. “Data center operators don’t face any such constraints. As a result, there’s no more expensive housing built on that land. It’s not housing per se.”

Residents in many communities are concerned that data centers will waste water and energy infrastructure and that all customers’ electricity rates will increase to cover the data center’s power costs.

Bobby Thompson, a Pennsylvania farmer, said he is concerned about the pressure on local water resources.
As a cloud computing company coreweave She built a data center in Lancaster, less than 32 miles from her home in Mountjoy Township.

“Where does the water come from?” Thompson said. “What does that mean for our community?”

Concerns about rising electricity prices are not unfounded. A May report from Monitoring Analytics, a group that monitors the PJM market, a wholesale power transmission region that covers all or parts of 13 states in the Mid-Atlantic and Midwest, said increased existing and projected data center loads are the “primary reason” for “high prices” in power capacity markets.

“Increased data center loads increased total auctioned capacity market revenue by $23.1 billion through 2028,” the report said.

Many residents are also concerned about the general loss of vacant land to private commercial use.

“Seeing farmland physically disappear is a little depressing as far as prospects go,” said Lindsey Dodge of Boise, Idaho.

The land rush can be seen in the most vivid relief of rural America. There, large tracts of farmland with access to the electricity grid could be much more valuable in terms of computational potential rather than agricultural potential.

Thompson and his sister Michelle Kennedy said they received dozens of offers last year for their 45-acre family farm.

Their neighbors have applied to have their farmland rezoned into an industrial park to accommodate more than 1 million square feet of manufacturing and warehouse space. The development has room for a total of about 1,000 employees and hundreds of vehicles, which Thompson and Kennedy argue will negatively impact farm operations.

“Can you imagine having 1,000 cars parked there 24/7?” Kennedy told CNBC. “If a cow is not relaxed, it will not produce milk.”

Kennedy and Thompson placed a conservation easement (a type of restrictive legal agreement maintained by an outside party) on their land to prevent it from becoming industrial land in the future.

“Going forward, it will be our legal and fiduciary responsibility to monitor, manage and enforce conservation easements,” Jeff Swinehart, chief operating officer of Lancaster Farmland Trust, a group that works with Kennedy and Thompson, told CNBC.

Boise is one of the centers of the national computing boom. meta We are building a data center in the nearby town of Kuna. micron is building two semiconductor factories in the metropolitan area and pumping billions of dollars into the region.

Mike Adler, founder and CEO of Adler Industrial, one of the largest commercial development companies in Idaho’s Treasure Valley region, said he has seen the city transform before his eyes, from remote alfalfa farms to luxury real estate.

Adler took the opportunity to grow his business and participate in an economic boom that transformed the city.

“Suddenly… what felt like a remote place turned out to be the center of the valley,” he said. “We realized this is an area where people were building. People wanted to be here. And when you look at those projects today, they’re being built and they’re great. Now it’s an area that everyone is using.”

Many Idahoans participating in the boom are excited about the development, but they also feel the weight of change.

Harry Sawyer, a fifth-generation Idahoan and vice president of commercial real estate firm CBRE, said he has watched his family make many big decisions as real estate values ​​soar and opportunities present themselves.

“‘Are we going to continue farming? Are we going to sell and do something else?’ We see that everywhere, but especially here,” he said.

In other parts of the country, the battle over data centers is decidedly more adversarial.

In Saline Township, Michigan, local officials resigned after receiving death threats over a massive new data center known as “The Barn,” a multibillion-dollar construction project by developer Related Digital. oracle And OpenAI.

“There are a lot of recorded messages wishing us death,” town employee Kelly Marion told CNBC in May. “What they say is, ‘We want you to die.’ We get the whole board, too. Other officers got it themselves. ‘We hope you die slowly.’

One resident has started a recall effort to seek re-election of township board members, including Marion, who voted in favor of the proposal.

Marion declined to say who threatened her or why, but said she received threats both by phone and email.

“Some of these threats we’re getting, according to people’s phone numbers, aren’t even coming from the state,” she said.

Wall Street has noted the growing backlash from states and local communities.

Up to nine states have put moratoriums on new data center development on hold, investment bank Mizuho said in a Sept. 1 analysis.

This joins New York State, where Gov. Kathy Hochul issued an order in July halting construction of new hyperscale data centers for up to a year. Data center development “could increase utility costs, deplete natural resources, and create uncertainty for New Yorkers,” Hochul said.

Some investment banks see public mobilization as a risk to their investments and the capital investments of the companies they represent, and some believe it could be a factor in November’s midterm elections.

“Most of the local backlash is manageable,” Wells Fargo’s Shahriar Poreza said in a June 3 note. “However, if this reaches state-wide scale in major (data center) markets, we believe it could pose significant risks to future growth and stock prices.”

“For the time being, we still think this is a state and local policy risk, not a federal risk. Federal policy remains accommodative on data center construction,” Morgan Stanley’s Ariana Salvatore said on September 1. “It would be an oversimplification to say this spending will not be affected by political backlash.”

“Data center politics are the primary risk,” Wells Fargo analyst Ohsun Kwon said in an Aug. 10 note highlighting market volatility surrounding the midterm elections.