Atlanta’s data center market is experiencing unprecedented growth as it recently surpassed Northern Virginia for the first time in modern internet history in terms of leasing activity for 2024.
According to a report by the real estate services firm CBRE, Metro Atlanta now ranks second in the U.S. data center market, primarily due to Northern Virginia reaching its physical limits.
This shift comes as more than 500 data centers currently operate in Northern Virginia, with about 200 clustered in Ashburn and Sterling in eastern Loudoun County.
In the face of a rapid influx of data centers, the residents and leaders in Virginia are grappling with the ramifications of continued development.
Some, like resident Schlossberg, express concern over the potential deterioration of the scenic and historic landscapes, saying, “Virginia is a beautiful state with a lot of natural and historic resources, and we are going to ruin that.”
On the flip side, officials in Loudoun County celebrate the substantial tax revenue provided by data centers, which significantly bolster the local economy and help lower residential tax rates.
Indeed, data centers now account for 38% of Loudoun’s general fund revenue, with county officials noting that the industry brings in a much higher taxable value per square foot compared to other types of development.
Michelle Thomas, an Atlanta native and pastor, asserts that data centers ultimately benefit communities, citing a successful partnership with Microsoft to create workforce development programs which may also expand into Atlanta as its data center market booms.
The Atlanta Regional Commission is keen to capitalize on this momentum and will take over 100 delegates to a D.C. networking summit, recognizing that the region needs to prepare for the future of data center development.
Historically, Northern Virginia’s dominance in the data center market stems from its connection to the origins of the internet, when the Defense Advanced Research Projects Agency developed foundational internet technology in the 1960s.
Today, about 70% of the world’s internet traffic passes through this area, marking it as a vital hub for internet infrastructure.
In response to local economic challenges revealed during the 2008 housing crisis, Louden County leaders quickly shifted to embrace data centers as a means to diversify revenue streams, moving away from dependency on residential real estate.
The county’s favorable zoning policies streamlined the construction of data centers, which allowed local governments to tax both the improved land value and the valuable equipment housed within them.
Such lucrative developments have allowed Loudoun County to lower residential tax rates substantially, even as they increase social services.
Underlining the financial boon, Rizer, Loudoun’s economic development director, detailed how data centers made it possible for the county to maintain substantial reserves, totaling approximately $1.4 billion, far exceeding Atlanta’s rainy day fund.
However, this reliance on data center revenue has also raised concerns.
Loudoun resident Julie Bolthouse, who works for an environmental nonprofit, fears that the area is morphing into a “company town” dependent on data centers and risks exhausting natural resources.
She pointed out the issues of data center proximity to vulnerable areas, such as Tippet’s Hill Cemetery, a historic site now encircled by construction.
Industry executives, like Equinix’s Christopher Kimm, recognize that residential proximity to data centers has been problematic, creating community pushback against such developments.
In response, Loudoun County’s Board of Supervisors recently amended zoning laws, eliminating by-right zoning for data centers.
New proposals for data centers will now require special permitting and undergo public scrutiny, similar to changes made by the Atlanta City Council.
While some local leaders contend that restricting data center development sends negative signals to potential investors, others urge caution against unbridled expansion.
As demand for data centers continues to grow, operators are expanding in locations like Prince William County, which has faced its own challenges with the sprawl of data centers into previously untouched rural areas.
Bill Wright, a resident of Prince William and a former retiree, expressed frustration over the rapid growth of data centers encroaching on nature and community aesthetics.
Projects are not just isolated; they are becoming massive complexes characterized by sprawling campuses that can take years to fully develop—substantially impacting local resources.
One proposed campus near the historic Manassas National Battlefield Park has drawn widespread criticism and legal challenges, reflecting the tensions between development and community interests.
Even as local businesses benefit from the influx of investment, residents like Mike Phillips lament the environmental and communal loss as educational settings and serene spaces are replaced by construction noise and industry.
This contrasts with the current moment in metro Atlanta, which, propelled by its own burgeoning data center industry, stands ready to attract even more players in an evolving ecosystem.
image source from：ajc
