Since 2022, roughly two-thirds of new data centers have been built or planned in areas already experiencing high levels of water stress. This has fueled growing opposition in host communities. While residents value jobs and tax revenues, they are increasingly unwilling to accept large water withdrawals from limited local supplies.

Local governments are taking notice. Some have imposed moratoriums on new projects until zoning regulations can be updated. Others now require detailed water use assessments as part of permit applications. These measures signal a clear shift: water is no longer considered incidental to development. It is central to whether projects are approved at all.

The result is greater risk for data center owners and operators. Delays in permitting, reputational harm from community pushback, and in some cases outright cancellation are no longer rare. In an industry where speed to market is the overriding goal, these obstacles can be more damaging than cost overruns.

In build-to-suit projects, incorporating water-positive design and community replenishment measures from the start can offer a turnkey solution that helps tenants meet their own sustainability goals. For leased space, water stewardship can become part of the value proposition, just as renewable energy credits have been used to support carbon reporting. Across the industry, positioning as a leader in water stewardship is becoming a way to compete for both customers and capital.

One of the most consistent lessons from recent projects is that water stewardship must be addressed at the outset. We’re working with clients to respond to these pressures as waiting until a permitting challenge or community protest arises is both costly and risky. The investment required to develop a water strategy is minimal compared to the overall capital cost of a data center, yet it can prevent significant delays or even cancellations. 

Planning early also enables providers to identify opportunities for community engagement, such as watershed restoration or infrastructure upgrades, which can strengthen local support. These actions are not just about regulatory compliance but about building long-term trust with host communities and being a good neighbor. 

The expansion of digital infrastructure is reshaping both technology and resource use. Water, once a secondary concern, has become central to whether data centers can be built at all.

For all data center owners and their tenants, the implications are significant. Projects lacking robust water management strategies face potential delays, regulatory moratoriums, and increasing public resistance. Conversely, implementing effective water strategies enables operators to secure their capacity for expansion, mitigate operational risks, and foster stronger relationships with clients and local communities.

In an environment where the primary objective is to bring facilities online as quickly as possible, schedule disruptions pose one of the greatest threats to success. Demonstrating responsible stewardship through transparent practices and meaningful community engagement has evolved from a best practice into a fundamental requirement for sustainable growth.