As tech companies and real estate developers rush to create data centers, they’re finding new opposition in what would be those data centers’ neighbors: everyday residents.
Monterey Park residents voted by a wide markgin to ban data centers in their area in early June, becoming the first city in the U.S. to do so.
What started with a public hearing for a data center proposal in December quickly turned into a six-month-long legislative back-and-forth that ended with locals voting to deny any data centers in the surburban city.
“We’ve been getting contacted by not just representatives from other cities, but also residents from other cities who want to repeat what we did,” said Elizabeth Yang, who was the mayor of Monterey Park as the city was discussing the future of data centers.
The move comes at a time when data center development is at its highest. As generative artificial intelligence stakes its claim on every industry, data center developers are clamoring for unoccupied land to build fortresses of servers, processors and energy coolers. Data center vacancy remains under 1%, in the U.S. according to a 2026 report by Jones Lang LaSalle Inc. – in 2020, vacancy was at 5%.
In Southern California, the 2026 soccer World Cup and the 2028 Summer Olympics are driving increased demand for local AI infrastructure.
Neighboring Los Angeles cities like Vernon and El Segundo have built data centers in their city limits.
Residents push back
But across the country, residents are fighting their local councilmembers on bringing data centers to their neighborhoods.
Opponents typically cite the electricity and water needs for data centers and utilities that are frequently strained by grid limitations and droughts in California. That electricity usage can translate into significant carbon emissions, based on how the electricity is produced, and there have been reports of communities seeing more expensive electric bills on account of new data centers.
In December, investment firm StratCap proposed a roughly 250,000-square-foot data center in Monterey Park – located approximately 65 feet away from the suburb’s nearest home. In public hearings, locals argued that the data center would produce noise pollution, exacerbate climate disasters like wildfires and increase utility prices.
But the project was estimated to bring in around $6 million in tax revenue every year, according to Yang.
“Which, for a small city like ours – our budget is like $150 million – that’s a lot of money we could have used for infrastructure,” she said.
As the city was flooded with hundreds of emails from recalcitrant residents, the city first put a moratorium on data center development. It then issued a council ordinance to ban data centers – which could have been reversed by a future city council coalition.
Residents asked to put a measure on the ballot outright banning data centers, which passed in early June. That, Yang said, was the final nail in the coffin.
