Community Implications of Data Center Development and Tax Incentives

November 25, 2025
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Molly Sherry, BA Public Policy

The surge in cloud computing, Internet of Things (IoT) devices, and artificial intelligence is driving a growing need for storage, processing power, and connectivity. Data centers are the facilities that house the servers, routers, cooling systems, and more, and they can be over 7 million square feet in size. Many states, including Michigan, are adopting tax breaks to incentivize the construction of data centers due to promises of economic growth and job creation. However, the impacts of these tax breaks and the rapid expansion of data centers on local communities and economies often go overlooked.

Read our other publication What Happens When Data Centers Come to Town.