The economic impact of data centers in Opportunity Zones

Few permanent jobs per facility, many construction jobs, and modest county-level gains. Virginia's Joint Legislative Audit and Review Commission (JLARC) found that a typical data center employs about 50 full-time workers, about half of them contractors.¹ As reported in press coverage of the study, most of the industry's estimated economic activity in the state is tied to construction rather than operations.

Careful research finds real but smaller effects than headlines suggest. Brookings researchers found that counties that got their first large data center saw total private employment rise 4% to 5% over five to six years, with construction employment up 11%, and that naive estimates ignoring pre-existing growth trends overstate the effect by about three times.²

For Opportunity Zone communities, the honest framing is that a data center is a tax-base and construction project more than a large employer. That is still meaningful in a low-income tract, and it is why communities often focus on tax revenue and local hiring for construction. The broader case is in Why data centers are a natural fit for Opportunity Zones.

They can be very large taxpayers. In Loudoun County, Virginia, data centers reportedly provide about 38% of General Fund revenue on about 4% of commercial land, and the county's real property tax rate fell from $1.145 per $100 of value in 2016 to $0.805 in 2025, according to press reports.⁸ Those figures come from news coverage; county budget documents are the better source for any specific number.

Many projects negotiate payments in lieu of taxes (PILOTs). In Wilmington, Ohio, a proposed Amazon project sought a 30-year PILOT at 30% of the property taxes otherwise owed, shared among the city, schools, a career campus and the port authority; the council vote was postponed as of late 2025.¹⁹ For Opportunity Zone deals, PILOT structures in which a public body holds title and leases the property back need a separate review under the owned-versus-leased property and related-party lease rules. State programs are compared in State data center tax incentives and Opportunity Zones.

More than many states expected. NCSL counts 38 states with dedicated data center tax incentives, and reports that lawmakers in 28 states introduced bills in 2026 to scale back or modify them.²⁰

Opportunity Zone benefits are federal and go to fund investors, so they do not reduce local property tax by themselves. They do stack with state and local incentives, which is why critics look at the combined subsidy. See Combining Opportunity Zones with other incentives.

Large and growing. U.S. data centers used about 176 TWh in 2023, about 4.4% of U.S. electricity, and LBNL projected 6.7% to 12% by 2028.⁹ LBNL's 2025 update projects about 649 TWh in 2030 in its reference case, about 11.8% of U.S. electricity, within a scenario range of 9.5% to 15.3%.¹⁰

Water use depends on cooling design. LBNL estimated direct on-site water use by U.S. data centers at about 17.4 billion gallons in 2023, with indirect use through electricity generation of about 211 billion gallons, as reported by Honolulu Civil Beat.¹¹ Ratepayer protection is now part of utility regulation: AEP Ohio's tariff requires new data centers above 25 MW to pay for at least 85% of subscribed demand for up to 12 years, so other customers are less exposed if a project underuses its capacity.¹⁸ Cooling options are in Water and cooling for Opportunity Zone data centers.

That is contested, and both sides have evidence. Supporters point to long-lived capital investment, large property tax payments and construction activity in low-income tracts, especially rural ones. Critics point to small permanent workforces, heavy subsidies and benefits that may flow to large technology companies.

A report cited by the National Community Reinvestment Coalition and Sen. Josh Hawley's office found that 14% of existing U.S. data centers, and 17% of those planned or under construction, are in Opportunity Zones; the underlying study's author and method were not identified in that coverage, so treat the shares as reported, not verified.¹⁵ On September 16, 2026, Sen. Hawley introduced the No Tax Breaks for Data Centers Act to exclude data centers from Opportunity Zone benefits, House members introduced a bill aimed at data center access to expanded incentives, and Sen. Ron Wyden released a framework with a similar aim.¹⁵ These are proposals and had not been enacted as of October 20, 2026.

Others push back. House Ways and Means Chair Jason Smith called the claim that Opportunity Zones will be used for data centers a huge stretch, saying data centers can be used in them, but so can everything else.¹⁶ Microsoft, Meta and Amazon told WIRED they do not use the program for their data center investments.¹⁷ The program's design is explained in What is an Opportunity Zone?.

Through new mandatory reporting, once the rules are final. GAO reported in August 2026 that QOFs held more than $108 billion in assets at the end of 2024 and found the effects of the incentive mostly unknown.¹³ Public Law 119-21 added information reporting for funds (§6039K) and their businesses (§6039L), with a penalty of $500 per day, capped at $10,000 per return or $50,000 for funds with gross assets over $10 million.¹⁴

Proposed regulations published September 11, 2026 would require census-tract-level reporting and information about each business, with commentary listing items such as employee counts and industry codes; the exact data list should be checked against the proposed text, and the rules are not final.¹⁴ Reporting duties are covered in Opportunity Zone reporting requirements and penalties.

Ask what the project pays, who it hires, what it uses and who bears the risk if it underperforms. Local opposition has grown quickly: Data Center Watch counted at least 75 projects worth about $130 billion blocked or delayed in the first quarter of 2026.¹² Clear answers to these questions tend to separate projects that win approval from those that do not.

Economic developers can find more in Opportunity Zones for economic developers and communities and Community engagement for Opportunity Zone data centers.