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Two seemingly different topics have been on my mind this month: the growing debate surrounding data center development and the long-term implications of conserving land in New Hampshire.
At their core, both raise important questions. How should land be used? Who should make that decision? How do we balance current priorities with future economic and environmental needs?
These questions deserve thoughtful discussion among brokers, developers, municipal officials, landowners and residents.
A May 23 Gallup poll found that 70% of Americans would oppose a data center being built in their local area, while only 7% strongly favored having one constructed nearby.
Some commentators, including Kevin O’Leary, have suggested that alarming content circulating online may be influenced by organized misinformation. Regardless of its origin, public concern is real, and developers should not dismiss it.
The current debate reminds me of the controversy surrounding hydraulic fracturing during the 2010s. Images of discolored water and water appearing to catch fire became central to the public conversation. Over time, the discussion became more nuanced as regulations, operating practices and public understanding evolved.
Data centers may be entering a similar period as growing economic demand collides with environmental concerns.
In conversations with major data center developers and real estate investment trusts, one distinction continues to surface: the difference between facilities using closed-loop cooling systems and those relying on systems that require substantial ongoing water consumption.
A closed-loop system circulates coolant or water through sealed pipes to absorb heat from high-density servers. That heat is then released through radiators or dry coolers without the continuous evaporation of municipal water. These systems can substantially reduce routine water consumption, although they may require more electricity and greater upfront mechanical investment.[1]
Developers using these systems argue that less responsible operators have contributed to the industry’s negative reputation.
Closed-loop systems do not eliminate every concern. Environmental advocates have raised questions about chemicals used in cooling and cleaning processes, including the possibility of PFAS or other contaminants entering local water supplies if those materials are not properly handled.
The design, operating practices, location, oversight and accountability of each project matter. It is neither accurate nor productive to assume that every data center is inherently harmful or harmless.
If artificial intelligence, cloud computing and digital services continue to expand, the physical infrastructure supporting them must expand as well. Data centers require land, power, cooling capacity and access to major telecommunications networks.
Cold-climate siting can reduce cooling demands, but remote and environmentally sensitive locations introduce their own challenges. China has also experimented with underwater data centers positioned near offshore wind infrastructure. These projects may offer efficiency advantages, but they raise questions involving water temperature, corrosion, maintenance, security and marine ecosystems.
Emerging technology may eventually address some of these concerns. For now, no location or design eliminates every tradeoff.
Data centers have existed since the early years of the internet. What has changed is the scale.
Hyperscale facilities generally require 40 megawatts or more of power and often exceed 100,000 square feet. According to WMUR, New Hampshire currently has approximately 11 data centers.[2] To my knowledge, none qualifies as a hyperscale facility.
Electricity cost is likely one reason. New Hampshire ranks among the most expensive states in the country for electricity, with rates of approximately 24 cents per kilowatt-hour. For a facility consuming enormous amounts of power, that difference can materially affect site-selection decisions.
Developers considering New Hampshire face more than an economic feasibility question. They also face a significant community engagement challenge.
Municipalities have an obligation to examine these proposals carefully. At the same time, the developers and REITs with whom I have spoken generally welcome detailed questions and understand that sustainability, transparency and community impact must be addressed from the beginning.
Data center development enters an existing debate over the balance between statewide development objectives and local municipal control.
Recent examples include HB 631, addressing multifamily residential and mixed-use development on commercially zoned land, and RSA 674:71–73 and HB 577, involving accessory dwelling units by right.
The state has increasingly favored policies intended to facilitate development, while many municipalities have resisted requirements that limit local discretion.
As a commercial real estate broker, I can see merit on both sides. Most people would not choose to live next to a large industrial facility. Yet communities also depend on development to support employment, services, infrastructure and the broader economy.
For concerned residents, the most effective approach is to identify specific, supportable issues. Questions about water consumption, wastewater management, chemical handling, noise, power demand, emergency response, visual impact and decommissioning can be evaluated through project design, operating conditions and regulatory oversight.
General opposition is difficult to resolve. Specific concerns allow communities to establish measurable standards and hold developers accountable.
As a former member of Merrimack’s Planning and Zoning Boards, I also believe mandatory training should be a baseline requirement for all planning and zoning board members. These boards make decisions with significant legal, financial and community consequences. Members should clearly understand the extent and limits of their authority.
Early in my commercial real estate career, I found deed restrictions somewhat unusual.
On the residential side, restrictions can feel arbitrary or exclusionary. On the commercial side, however, they can serve a clear investment purpose, such as preventing a competing use from being established on nearby property.
Even then, I questioned the underlying principle. To what extent should a current property owner be able to dictate how land may be used decades into the future?
More recently, I have found myself asking the same question about conservation land.
New Hampshire benefits from protecting forests, farmland, water resources, wildlife habitat and open space. Conservation contributes enormously to the environmental health, character and appeal of the state.
Once land is permanently conserved, however, changing its use becomes extraordinarily difficult under RSA 477:45–47. That is largely the point, but it also deserves consideration from a multigenerational perspective.
What needs might New Hampshire face 50, 75 or 100 years from now? Should today’s owners and policymakers be able to permanently restrict land use regardless of circumstances future generations cannot yet anticipate?
Approximately 52% of New Hampshire’s land is enrolled in the Current Use program under RSA 79-A. The program provides reduced property-tax assessments for qualifying open space, agricultural and forest land, including some conserved property.
Its purpose is to encourage landowners to preserve open space and protect the state’s forests, farms, water resources and wildlife habitat. By that measure, the program has been highly effective.
It also creates a financial tradeoff. When more than half of the state’s land receives tax-advantaged treatment, the remaining tax base must carry a greater share of the cost of municipal services.
New Hampshire already has one of the highest effective property-tax rates in the country, generally estimated at approximately 1.5% to 1.66%. Because the state has no broad-based sales or individual earned-income tax, property taxation remains central to funding local government, education and public services.
This raises an important question. If significantly less land were enrolled in Current Use, would other property owners experience meaningful tax relief? Or would New Hampshire sacrifice the open space and rural character that make the state desirable without materially reducing the overall tax burden?
There may not be a simple answer, but the question is worth considering.
Data center development and land conservation appear to represent opposite ends of the land-use spectrum. One accommodates new infrastructure and economic activity. The other limits development to protect land and natural resources.
Yet both require decisions today that may affect communities for generations.
Good land-use policy must account for economic opportunity, environmental responsibility, private-property rights and legitimate municipal concerns. It must also preserve enough flexibility to respond to needs we cannot fully anticipate.
That balance requires informed municipal boards, responsible developers, engaged residents and clear standards grounded in facts.
What do you think? How should New Hampshire balance local control, economic development and long-term conservation?
If you have questions about how these issues could affect a development proposal, property or investment strategy, SVN | The Masiello Group welcomes the conversation.
[1] Closed-loop cooling-system source
[2] WMUR, New Hampshire data center reporting
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