Turning the Data Center Boom Into Longterm Local Prosperity
Nearly every region in America is being courted, or is courting, a data center. The pitch is familiar: construction jobs, new tax base, a foothold in the AI economy. The track record is more sobering. As Urban Impact Advisors Senior Consultant Daniel Goetzel writes with Brookings Metro's Mark Muro and Shriya Methkupally in *Turning the Data Center Boom into Long-Term, Local Prosperity*, long-term operational employment from data centers has historically been small relative to the construction phase, and local leaders are increasingly skeptical of promised spillover effects that rarely materialize.
What makes this moment different, the authors argue, is leverage. The scramble among hyperscalers for mega-sites, grid capacity, water, and permitting approvals has created real scarcity, and for the first time that scarcity favors the communities doing the approving. In the authors' words, "states and regions are beginning to remember that their land, approvals, infrastructure, water, and electricity are invaluable."
The article makes the case that regions should treat data center negotiations "not as isolated real estate transactions but as ecosystem-shaping moments," and offers four ways to do that. Trade expedited permitting for substantive commitments such as compute donations to universities, R&D partnerships, workforce programs, and startup support aligned with regional strengths. Pursue shared-prosperity structures like community equity endowments and university or state equity stakes in exchange for compute access. Co-finance regional testbeds where local startups validate technologies and hyperscalers stress-test their own. And use the enormous energy demand these facilities bring as a lever to pilot next-generation energy and grid technologies locally.
This thinking sits squarely in the work UIA does with universities, cities, and innovation districts. A data center on its own is a building. A data center negotiated well can be an anchor for research capacity, talent, and industry specialization that outlasts any single project.
Read the full article at Brookings →
https://www.brookings.edu/articles/turning-the-data-center-boom-into-long-term-local-prosperity/
