Reports Find Data Centers Don't Lower Nearby Home Prices, Despite Widespread Concern

As communities across the U.S. push back on data center projects, warnings that they will slash the value of nearby homes have been a prominent rallying cry.

But two studies this year have found more often than not, this isn't the case — surprising one researcher who dug into the data. 

The specter of data centers industrializing residential areas, making nearby homes uninhabitable and cratering local property values has become a recurring theme at government hearings, community meetings and on social media in towns weighing proposed projects.

Critics worry that pollution from generators, noise from power and cooling systems, pressure on local water supplies and the transformation of open land into industrial campuses will turn once-desirable neighborhoods into places few would choose to live. Beyond impacting quality of life, opponents frequently warn that the presence of a data center will erode the value of properties that are often residents’ most valuable financial assets. 

Breena William, a resident of Box Elder County, Utah — where developers are hoping to build the 40,000-acre Stratos Project data center campus — told Kiplinger last month she is considering relocating and selling her home before its value declines.

"I think after this goes into effect, people won't be able to sell their homes, and people will be stuck," she said. 

While it might seem intuitive that the introduction of a data center would depress nearby property values, a pair of recent studies from George Mason University and consultancy Integra Realty Resources have challenged that assumption.

The reports, which analyzed the impact of data centers on home prices in a small number of counties in Virginia and Indiana, both found that data centers don't appear to have a negative effect on nearby housing values in those areas. 

With evidence of data centers’ quality-of-life impacts being amplified on social media and in national headlines, these findings came as a surprise even to one of the report’s authors. 

“It's not necessarily what we expected,” said Keith Waters, assistant director of the Center for Regional Analysis at George Mason University. “It's not necessarily what most people expect.”

The George Mason study looked at 2023 home sales in Northern Virginia, the world’s largest data center market, analyzing the relationship between a home’s distance from a data center and its sale price. The researchers weighted each property to account for other variables that could also negatively impact home prices, such as proximity to other existing industrial infrastructure or Dulles airport. 

Waters and his coauthor had hypothesized that being close to a data center would result in lower sale prices. But that’s not what they found. 

“The analysis fails to demonstrate statistical evidence that proximity to a data center negatively impacts housing values,” the report concluded. “This suggests that any negative externalities associated with data centers, such as noise, do not have a systemic effect on housing values.“

In part, the findings suggest that the environmental stress data centers place on their surrounding communities through noise and emissions may be less severe than many critics contend, Waters said. 

He points to Loudoun County, one of the areas analyzed in the report, which is home to the densest concentration of data centers in the world yet remains one of the most expensive and in-demand housing markets in the region. If data centers were broadly depressing home values, Waters said, that impact would likely be visible there.  

At the same, the findings also reflect the reality that most data centers are built close to existing industrial buildings and infrastructure that already produce noise or pollutants, according to Waters. In Northern Virginia, data centers abound next to Dulles airport in its flight path and along highways — locations where home prices are already suppressed and where emissions and noise from data centers are less noticeable. 

“If you think through locations where people are putting these things, you're probably not going to notice, and it's probably not going to have the worst of the negative impacts that everybody's fearing,” Waters said.

Although the George Mason study looked only at data from a single year in just a handful of counties, other researchers came to a similar conclusion in their analysis of data centers’ impact in Indiana.

The IRR study, published in January, was conducted at the behest of Sabey Data Centers as it sought approval for a 250-megawatt campus on 130 acres in  Decatur Township near Indianapolis. The report evaluated the potential impact of the proposed project, which has since been approved by local officials, on the value of nearby residential properties.

Using Zillow data, researchers looked at single-family homes within 1.5 miles of four large data centers in four different Indiana counties to see how their values changed over time compared to other homes in the surrounding market. The study looked at home values between 2021 and 2026 to account for values before, during and after the four data centers were built. 

Like the George Mason report, the study found no significant difference in home value or home appreciation between homes close to data centers and other residential properties in the market. Properties near data centers grew in value by an average of 42%, slightly more than their surrounding areas, which grew by 41%.

The report also found no significant difference in how long homes sat on the market.

Overall, the authors concluded that “the values of the residential properties surrounding the proposed Sabey Data Center will not be affected in a substantially adverse manner.”

However, when Integra’s data is broken down by county, a more complicated picture emerges. 

Of the four counties in which homes were analyzed, only one saw homes near data centers gain more value than the local market average: St. Joseph County, where home prices near Amazon’s New Carlisle campus rose 49% compared to an average 32% increase countywide. Properties within a mile and a half of large-scale data centers in Allen, LaPorte and Clark counties gained less value than the county average by 1%, 6% and 9%, respectively. 

George Mason’s Waters acknowledges that data on how these facilities impact home prices in a specific area may not translate to every region or to every data center project. While he said his findings are “probably more generalizable than people might imagine” across different markets, Waters and his coauthors are considering carrying out a similar analysis in other U.S. regions. 

One variable he suspects helps determine whether data centers depress home prices in an area is housing demand. Northern Virginia is facing a significant housing shortage, with demand far exceeding supply. Potentially, Waters said, this means homebuyers are forced to be less selective than they would be if there was more available housing inventory.

“If you're in an area where maybe there's not such constrained housing, would the impacts be different? Potentially,” Waters said. “In other parts of the country, if consumers have more choice about where they want to live, maybe it starts to have a more material impact on housing values.”