Public backlash against data center development is reaching a fever pitch, and elected officials in Chicago and Illinois are firmly in the crosshairs.  

Local politicians are staring down the same Catch-22 facing their counterparts across the country: choosing between supporting publicly popular opposition to data centers or backing data center developers promising millions of dollars in investment to the area. 

Chicago Mayor Brandon Johnson’s August executive order seeking to further regulate data centers in the city may not have the sharpest teeth, industry experts told Bisnow. Instead, it adds fuel to the conflagration that threatens to keep smoking developers out of the state. 

Johnson’s executive order requires that city reviews of data center developments need to include conditions for air pollution-control permits and noise regulations on cooling equipment. It also mandates assessments of power demand, water use, and noise and air emissions. 

The administration is also angling for a moratorium on new or expanded data centers as it works to update regulations, but that would require the city council to pass an ordinance.

Michael Bennett, associate vice chancellor for data science and artificial intelligence strategy at the University of Illinois-Chicago, said many data center projects have come with major subsidies, and in the run-up to local elections, voters want to know candidates’ stances on things like regulations, transparency and tax breaks.

"It's a classic Scylla and Charybdis," Bennett said, referring to the dangerous strait between a pair of monsters in Greek mythology. "You really do have to successfully sail between these two positions that you're marking out."

Chicago has long been a leader in data center development among markets across the country, but its standing has started to slip in recent years. The city ranked either second or third for total data center capacity between 2017 and 2022, before dropping to fourth in 2023, fifth in 2024 and seventh in 2025, according to JLL. 

Chicago has 39 data centers within the city limits, according to a July city report. Cook County has 114 tracked data center facilities, with 11 in the development pipeline, according to the U.S. Data Center Map. 

How city government implements the review of applications will be key for the way data center developers navigate potential new hurdles, said Brad Tietz, the director of government affairs-Midwest for the Data Center Coalition. 

“When you look at the different directives to the city agencies, I think the devil is really going to be in the details and how they actually prescribe this,” Tietz said.

Tietz, who has worked in the industry across various roles in Illinois for about 12 years, helped pass the state’s 2019 program to incentivize data center development through tax breaks. The program committed more than $650M in tax exemptions to 34 projects, but Gov. J.B. Pritzker paused applications earlier this summer amid rising public pushback against data center development. 

The pause came on the heels of the POWER Act, a data center regulation bill that would require data center companies to pay for their own energy generation and track and report water usage, stalling out in the Illinois legislature’s spring session this year. The legislation could still be revived in a future session. 

A spring poll from the Illinois Clean Jobs Coalition of likely 2026 voters found that 68% supported regulations on data centers, with more than half of the 21% of those opposed indicating it was because they’d prefer to see no new data centers built at all.

Public data center backlash in one Illinois suburb has taken a darker turn in recent weeks. 

The village of Grayslake, a suburb about 45 miles north of Chicago, abruptly postponed a planned extended public comment session on a data center campus in the area on Aug. 19, citing safety concerns over social media posts. The village pointed to comments on a post by the Lake County Party for Socialism and Liberation about the development, which included numerous calls for gratuitous violence against council members. 

Tietz said he started noticing a shift in public opinion within the past two years, as applications to utilities for electricity led to "numbers that utilities were not used to seeing."

“In a state like Illinois, in a city like Chicago, they are looking at new regulations, and we're trying to figure out how to make this work for both the industry, the legislators, the policymakers and the communities,” Tietz said. 

Data centers have become synonymous with the artificial intelligence boom to much of the general public, though their use cases spread beyond that and include gaming, messaging, high-frequency trading and medical uses, Bennett said. 

Legacy Investing President Daniel English is converting the former Cboe headquarters into a data center in downtown Chicago that will be live in 2027. He said data centers support a huge number of people’s day-to-day lives — though they might not necessarily be conscious of that. 

“Data centers as they continue to get added, particularly in the urban core, are first and foremost about adding compute capacity that we're all using for our lives,” English said. “There's a lot of existing infrastructure … that we can use.” 

English said political pressure against data centers could shift where people develop, but that the trend isn’t specific to the asset class but rather CRE as a whole. If you increase the cost or barriers to develop, you will see a shift in developers’ willingness to enter the state, he said.

Bennett said in this election cycle, politicians running for office need to take a stance on data center development, and Johnson’s willingness to regulate the sector is consistent with his historical positioning as someone who stands with common people. 

“It's not surprising that he would speak as he has on this,” Bennett said. “It's politically required at this point, especially if he wants to keep open the possibility of running again.”

Tietz said the Data Center Coalition would continue to keep tabs on the city council calendar heading into its budget season, in addition to an environmental committee hearing at the beginning of September, but acknowledged it was unclear what was next in the city at this point. 

“Is it going to be just a slowdown for slowdown's sake, and it takes you an extra year to really get through your application with the city?” Tietz questioned. “That will materially impact projects.”