Why Data Centers are Driving Rural Land Demand: Location Requirements Explained
- Craig Kaiser
- Sep 18
- 8 min read
Updated: Oct 28
Have you noticed new, large-scale construction projects popping up in rural communities? There's a good chance you're witnessing the rapid expansion of the digital economy. Data centers, the physical backbone of our online world, are increasingly looking beyond urban centers and finding ideal homes in the countryside. This shift is creating a significant opportunity for rural landowners, as a quiet boom in land demand is underway, driven by the specific needs of these powerful facilities.
This article will explore why data centers are pushing into rural areas and what they look for in a property. We will cover the essential location requirements, from power and connectivity to land and climate, to help you understand if your property might be exactly what developers are searching for.
The Digital Gold Rush: From Urban to Rural Properties
Data centers house the servers, storage, and networking equipment that power everything from streaming services and social media to banking and artificial intelligence. As our reliance on digital services grows, so does the need for more data center capacity. This growth translates directly into land acquisition, with developers actively seeking suitable properties across rural America.
In Q2 2025, the U.S. data center sector grew significantly, driven by hyperscale operators expanding AI workloads, according to a LandGate report. Total energy consumption hit an estimated 224 TWh, fueled by new GPU-dense pods and edge expansions. Capital expenditures for installed capacity rose by 17.7%, with hyperscalers investing over $300 billion. Despite challenges like workforce shortages and interconnection delays, developers leveraged new state incentives and deregulation from the “Big Beautiful Bill” to boost rural development in key markets such as Ohio, Georgia, and Texas.
Traditionally, data centers were located near major cities, close to business and population hubs. However, urban land is expensive, crowded, and subject to complex zoning laws. Consequently, developers are now looking further, with rural areas emerging as ideal locations. The open space, favorable conditions, and growth potential make rural areas attractive for tech industry expansion. This trend is significant due to the scale of modern hyperscale data centers, which can cover hundreds of acres. This creates substantial opportunities for rural landowners who may not have previously considered their property a potential tech asset.
Find out if your land qualifies for a data center with a free LandApp Property Report. LandApp rates your land from 0 to 100 based on key factors like fiber optic access, buildable space, and energy infrastructure. Just locate your parcel on our map to get yours:
Why are Data Centers Built in Rural Areas?
Data centers are increasingly being built in rural areas due to lower land costs, the availability of vast land, access to renewable energy sources, more favorable regulatory environments, and lower natural disaster risks compared to many urban areas, making them highly appealing for tech companies looking to optimize costs while meeting growing demands for digital infrastructure.
1) Power Infrastructure Advantages
Rural areas often sit near major power generation facilities and transmission lines, making them attractive for data centers that require enormous amounts of electricity. A single large data center can consume as much power as a small city, making proximity to reliable, affordable electricity a critical factor in site selection.
2) Lower Land Costs and Availability
Urban real estate prices have made large-scale data center development increasingly expensive in metropolitan areas. Rural land offers the space needed for expansion at a fraction of urban costs, allowing developers to build campus-style facilities with room for future growth.
3) Reduced Regulatory Complexity
Rural jurisdictions often have more streamlined permitting processes compared to dense urban areas. This can significantly reduce development timelines and costs, making rural locations more attractive to developers working on tight schedules.
4) Access to Renewable Energy Resources
Data centers require a reliable and robust grid to ensure a constant energy supply and minimize outages, as they consume significant power and operate continuously. Rural areas often host renewable energy facilities, such as solar and wind farms, making them ideal locations for data centers. By locating data centers near these facilities, operators can partner directly with renewable energy developers for a consistent, eco-friendly energy supply.
Many data center operators, including Apple, Microsoft, and Amazon, have committed to 100% renewable energy. Therefore, locations with strong renewable energy sources, like rural regions, are becoming more appealing for developers. In deregulated energy markets, data center operators often use power purchase agreements to buy energy directly from renewable energy providers.
5) Cooler Climates & Lower Natural Disaster Risks
Climate and weather are crucial when selecting a data center location. Cooler climates reduce cooling needs, energy consumption, and costs. Additionally, data center operators typically avoid areas prone to extreme weather to minimize outage risks, and rural areas are generally less prone to natural disasters.
Top Rural Data Center Hotspots in 2025
Several rural regions are expected to lead the way in offering the ideal balance of cost-efficiency, sustainability, and reliability for data center operations through 2025 and beyond. The top 3 rural data center hotspots are Virginia, North & South Dakota, and Texas.
1) Virginia
While Ashburn, VA remains the U.S. data center capital, nearby rural counties are becoming attractive alternatives. Prince Edward, Mecklenburg, Pittsylvania, and Halifax Counties offer access to Northern Virginia's fiber ecosystem at lower costs. Their proximity to Ashburn's fiber backbone, significantly reduced land and utility costs, aggressive tax incentives, and access to solar and biomass energy make these rural regions in Virginia appealing to developers.
2) North & South Dakota
North and South Dakota are rapidly emerging as renewable energy leaders for the digital economy. These states offer a compelling combination of minimal natural disaster risk and some of the nation's lowest power rates, thanks to extensive wind generation capacity and underutilized grid infrastructure. Key attractions include among the lowest commercial electricity costs in the U.S., national leadership in wind energy generation and land availability, naturally cool climates that reduce mechanical cooling costs, and supportive rural broadband initiatives and fiber expansion. Recent developments highlight this growth, such as Applied Digital's data center in Ellendale, powered by renewables, emerging fiber partnerships between state governments and private ISPs, and increasing interest in modular and edge deployments from AI firms.
3) Texas
While Dallas, Houston, and Austin are well-known tech hubs, rural Texas land is driving a new wave of digital infrastructure. Counties in West, East, and Central Texas are taking advantage of their energy independence, business-friendly policies, and vast tracts of land to attract hyperscale and AI-focused deployments. The independent ERCOT grid allows for customized power agreements, while Texas leads the U.S. in installed wind and solar capacity. Its central location between coastal data corridors, combined with a favorable permitting environment and low development costs, makes it an attractive option for tech expansion.
Benefits and Challenges of Rural Data Centers
Rural data centers offer a range of potential advantages for rural communities because they drive job creation, tax revenue, and broadband deployment. However, they also come with unique challenges, such as limited access to high-speed connectivity, skilled labor shortages, and potential logistical hurdles.
Benefits of Rural Data Centers
The data center boom is creating substantial economic opportunities in rural areas. These facilities bring high-paying technical jobs, generate significant tax revenue, and often spur additional economic development in surrounding areas. Additionally, construction phases can inject millions of dollars into local economies through contractors, suppliers, and temporary workers.
Enhanced Fiber Optic Networks: Data centers are essential in bridging the connectivity gap for rural communities, serving as a cornerstone for digital growth in underserved areas. The development of data centers is not only supporting the deployment of broadband deployment in rural regions but also driving the expansion of fiber-optic networks, which are crucial for reliable, high-speed internet access. By enhancing local connectivity, this empowers rural communities to thrive in an increasingly digital world, enabling better access to education, healthcare, and economic opportunities.
Job Creation: The development of data centers in rural areas serves as a powerful engine for job creation, offering both immediate and long-term employment opportunities. During the construction phase, large-scale projects demand skilled labor in fields such as engineering, construction, and project management. Once operational, data centers require a workforce to manage day-to-day operations, including IT specialists, systems analysts, and maintenance personnel. Additionally, these facilities stimulate local economies by creating indirect job opportunities in areas like transportation, food services, and infrastructure support.
Tax Revenue: Data centers increase local tax revenues, notably in places like Loudoun County, Virginia, dubbed "Data Center Alley." This area, with the world's highest concentration of data centers, generates over $890 million in annual tax revenue, funding schools, infrastructure, and emergency services. This diversified revenue stream lessens reliance on residential property taxes and stabilizes local budgets.
Increased Property Value: Data centers can increase property values, depending on the circumstances. They can boost housing demand and raise property values in nearby areas by driving employment and stimulating economic growth. Property owners who successfully lease or sell to data center developers often receive premium pricing, sometimes up to 2 to 4 times of agricultural land values.
Challenges of Rural Data Centers
Although there are many benefits of data center development in rural communities, developers can face challenges like high deployment costs, energy infrastructure strain, and skilled workforce shortages. Data centers can also face community opposition due to their environmental footprint.
High deployment costs: Building and maintaining data center facilities in remote locations can be prohibitively expensive due to factors such as land acquisition, construction costs, and ongoing operational expenses. Additionally, the low population density of rural areas may result in lower returns on investment.
Community Opposition: Data centers can face backlash from residents due to their environmental footprint, including heat and noise pollution, water usage, and the potential destruction of natural areas for construction.
Infrastructure Strain: The massive power demands of data centers can strain local energy grids, requiring significant investment in new infrastructure.
Regulatory and compliance issues: Zoning regulations, environmental permits, and land-use restrictions may impact the siting and construction of data center facilities. Additionally, compliance with data privacy and security regulations, such as HIPAA and GDPR, adds complexity to data management practices in rural areas.
Workforce and skill shortages: The technical expertise required for designing, deploying, and managing data center infrastructure may be limited in rural areas, leading to workforce shortages and skills gaps. Additionally, the remote location of edge data centers may pose challenges for recruiting and retaining qualified personnel, further exacerbating workforce issues.
Assessing Rural Land Potential for Data Centers
The expansion of data centers into rural America is creating a unique opportunity for landowners. As digital infrastructure needs continue growing, rural properties meeting the right criteria may represent significant untapped value. Properties that may have been overlooked for traditional development could be prime real estate for data center developers, who are often willing to pay premium prices for land that meets their specific criteria. If you own 30+ acres of rural land, especially near power lines, major transport routes, and fiber optic networks, you could be sitting on a highly valuable asset.
Get Your Free Property Report
Discover your land's suitability for a data center with a comprehensive free LandApp Property Report. LandApp's Property Reports rate your land on a scale of 0 to 100 for data center development potential, taking into account all critical location factors like proximity to fiber optic networks, buildable acreage, and energy infrastructure. Simply find your parcel on our map to get started:
Connect with Developers
If your property shows strong potential, consider listing on LandApp's marketplace for free. Data center developers actively search for suitable rural properties actively searching for their next location. Listing is completely free with no obligation to accept any offers you may receive, giving you a risk-free way to explore the possibilities and attract top-dollar interest.
