Adair Park is a small plot located in the southwest of downtown Atlanta, and in recent years, it has been an emerging Community. Part of the plot is a residential area, while another part is an industrial area, adjacent to the local train station and the popular Beltline walking trail. In the past few years, developers have been moving in, transforming those vacant lots and dilapidated buildings into new Residences, co-working spaces, and retail shops.

However, nowadays, in this plot and the metropolitan area of southeast Atlanta, the demand for one type of Real Estate may squeeze out the construction of other types: Datacenters.

There are signs indicating that the Datacenter facilities used to transmit, accelerate, display, compute, and store data information are currently in short supply. The AI race among the world's largest Technology companies is driving the competition for larger-scale and more powerful computing facilities.

Amid this wave, the growth rate of Datacenter construction in Atlanta has nearly surpassed that of any other major city.

According to data from the Real Estate company CBRE Group, based on electrical capacity, the construction of Datacenters in the Atlanta metropolitan area in the first half of 2024 increased by 76% compared to the same period last year. $Meta Platforms (META.US)$ 、 $Alphabet-C (GOOG.US)$ 、$Microsoft (MSFT.US)$Both Musk's X company and others are operating Datacenters in the Atlanta area or are planning to build new Datacenters. This year, X's expansion also received a local tax exemption of 10 million dollars.

These companies, along with many other Technology companies and Real Estate Investors, are attracted by Atlanta's cheap Electrical Utilities, state tax incentives, and existing fiber optic infrastructure.

Even during periods of high interest rates, while enthusiasm among Real Estate Investors for other types of Real Estate has generally declined, the demand for land for Datacenters across the USA is surging.

According to Green Street, the total construction area of Datacenters is expected to grow at an annual rate of 43% between 2023 and 2024. During this period, the average growth rate of total area for multi-family Residences, hotels, self-storage facilities, and other property types is less than 3%.

According to Green Street's real estate Analyst David Guarino, "The rate of growth we have seen over the past few years has truly been surprising."

Analysts indicate that it is inevitable to allocate more space for computing and AI. As AI evolves from training models to what the industry refers to as logical 'reasoning' (when AI truly starts working and becomes commercially viable), businesses will require more space and electrical utilities than they do now. This will drive more suppliers to enter the fastest Internet Plus-Related connection locations, which are often major population centers.

Opposition under the 'land grab'.

However, in the face of this wave of 'land grabbing' for data centers, some local residents in Atlanta are pushing back.

An increasing number of local residents and legislators are concerned that the rapid development of data centers and the amount of land and resources invested have become excessive. They claim that this has started competing with more urgent demands for Real Estate, such as housing and retail shops.

In September this year, the Atlanta City Council prohibited the establishment of new data centers in communities near transportation hubs. This month, an ordinance allowing the establishment of data centers in the Adair Park area was revoked.

Atlanta Mayor Andre Dickens wrote in a letter regarding the legislation, 'The development of data centers must not take precedence over people-centered CityDev, including the provision of affordable housing, high-quality jobs, and community retail.'

Other builders in USA cities and states are also constructing a significant number of new data center facilities, which may lead to new restrictions on data centers, following Atlanta's example. Fairfax County, located in Northern Virginia, recently banned the construction of new data centers within one mile of a railroad station.

Nevertheless, this may not severely hinder the development of new data center constructions locally, as most newly constructed data center facilities are located in suburban areas. According to real estate data company Green Street, by 2028, the electrical load of data center facilities in the Atlanta metropolitan area will exceed 4,000 megawatts, approximately 30 times the data center load in the region in 2012.

Interestingly, the expansion of datacenters has also brought good news for some office building owners, who are leasing out originally vacant floors to these companies.

However, Atlanta's legislators have stated that rapid growth comes at a cost. According to an estimate from 2022, the total housing shortage in the Greater Atlanta area is about 0.1 million units, and residents share the same concerns.

Matthew Garbett, a member of the Adair Park Neighborhood Association and co-founder of the urban planning advocacy organization "ThreadATL," stated, "I believe the city government has realized that while datacenters provide some value to abandoned office buildings, they do not truly enhance the vitality or housing of the city in the long run."

The datacenter industry is still looking for new markets that welcome them.$Amazon (AMZN.US)$Cloud Computing Service (Amazon Web Services) announced earlier this year that it will invest 10 billion dollars to build new datacenters near Jackson, Mississippi, and Microsoft recently announced plans to build three new datacenters near New Albany, Ohio.

According to the industry trade organization Data Center Coalition, most states in the USA still provide some form of incentive for datacenters. For example, Georgia offers sales tax breaks for equipment purchases, with the cost of equipment procurement for a single site reaching into the hundreds of millions of dollars. Supporters of datacenters claim that property taxes and other tax revenues generated by datacenters are sufficient to offset the losses from sales tax exemptions.

Editor/Rocky