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Over the past few decades, Northern Virginia has become the global capital of data centers—those giant, windowless buildings that power the internet, cloud storage, and just about everything online. They’re a big deal for Virginia’s economy, bringing in some $9.1 billion a year, according to a recent Washington Post report. Construction creates jobs, and once they’re up and running, the facilities bring in steady tax revenue for local governments.
But there’s also concern. Data centers use enormous amounts of electricity and water and can change the character of nearby communities—most notably, they hum.
One question people often ask is: What happens to housing values near these massive facilities?
A recent analysis by the Center for Regional Analysis (CRA) at George Mason University’s Schar School of Policy and Government looked at the connection between data centers and for-sale home prices across Northern Virginia.
The study, Data Centers and 2023 Home Sales in Northern Virginia, was prepared by CRA Director Terry Clower and Assistant Director of the Stephen S. Fuller Institute Keith Waters. It mapped where data centers are located—hundreds of them, mostly clustered around Dulles Airport in Loudoun County and near I-66 and the Manassas Regional Airport in Prince William County, with a few in Tysons—and compared that with where homes sold, and at what prices.
As expected, the most expensive homes were found in North McLean, Western Loudoun, Clifton/Farrs Corner, and Belle View in Alexandria. Those areas feature bigger properties, larger houses, and natural perks such as Potomac River access or rolling hills.
Here’s where it gets interesting: The farther away a house was from a data center, the lower the sales price. In other words, homes closer to data centers tended to sell for more. That trend held true for single-family homes, townhouses, and condos.
It may sound counterintuitive, but it makes sense. Data centers tend to be built in areas with strong infrastructure—good roads, reliable utilities, and proximity to jobs and airports. Those same features also make surrounding neighborhoods more attractive to homebuyers. While some residents worry about the downsides of data centers, at least when it comes to housing values, proximity appears to be a positive.
“I wasn't particularly surprised to find that home prices nearer data centers showed higher prices,” said Waters. “This is at least partially true due to the amenities, but it could also be due to reasonably good planning and a number of data centers being located in places that most people are not aware of.”
Waters added that the study can be useful to “realtors, policymakers, or anyone concerned about shifting tax rates due to a drop in office valuations.”
Those who are in technology fields and artificial intelligence development will also find the study useful.