A city of 60,000 people seven miles east of downtown Los Angeles just became the first in the US to permanently ban data centers through a direct public vote. Monterey Park's residents passed the measure with 86% support. The only way to undo it now is another citywide vote.
The whole thing started when an Australian investment firm proposed a 247,000 square-foot data center on a former shopping centre site, less than 500 feet from the nearest home, requiring about 50 megawatts of power at peak. Residents organised. The developer eventually withdrew. But the city kept pushing for a permanent ban anyway, because officials wanted something that a future council could not quietly reverse.
Monterey Park is the clearest example of a much larger trend. At least 48 data center projects worth over $156 billion were blocked or stalled by local opposition in 2025 alone. Cancellations jumped from 6 in 2024 to 25 in 2025, and more than 20 more were killed in just the first three months of 2026. There are now 188 organised opposition groups across 40 US states, and the opposition cuts across political lines: the same project that worries a Republican county commissioner about tax giveaways worries a Democrat about water consumption.
The grievances residents raise are consistent everywhere: electricity demand that pushes up local bills, water consumption at industrial scale, diesel generator noise during outages, and generous tax exemptions that leave infrastructure costs for residents to cover. A Gallup survey found that 71% of Americans would oppose a data center in their community, which is a higher disapproval rate than for nuclear plants or gas facilities.
Big tech has not slowed down. Moody's raised its spending projections for the six largest tech companies to $785 billion for 2026 and nearly $1 trillion for 2027. For now, blocked projects represent somewhere between 8% and 20% of a single year's spending, significant but not enough to stop construction. When one site is blocked, developers route around it.
But the friction is building. Google has already signed a deal to fund a virtual power plant across 13 states, paying households with smart thermostats and electric vehicles to reduce their electricity use when the grid is strained, as a way to free up capacity for its own data centers. That kind of workaround is becoming necessary precisely because straightforward grid access is getting harder to obtain.
For business operators, there are two practical implications. First, the AI tools and cloud services your business uses run on physical infrastructure that is becoming harder and slower to build. That does not threaten existing services in the near term, but it affects how quickly capacity can expand, and capacity constraints eventually affect price and availability. Second, if your industry involves real estate, construction, local government relations, or energy procurement, the data center fight is coming into your territory, and the community opposition playbook is becoming increasingly effective.
The Monterey Park mayor predicted her city would not be the last. She was almost certainly right. The question for the industry is whether paying households for energy flexibility, as Google is trying, or offering genuine community benefit agreements, as some developers in Pennsylvania have done, can change the political calculus. At 86% opposition at the ballot box, the current approach clearly is not working.