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As we revisit our Policy Puzzle series, we shift our focus to Virginia as we decode the complexities of recent and potential state-level urban and community planning policy in the Commonwealth.
Virginia is home to the world’s largest concentration of data centers, most of which are in Northern Virginia. This proliferation has raised public concern and increased policy efforts to manage their growth.
Virginia is the perfect ecosystem for data centers due to its competent workforce, accessible energy, safe location, abundant commercial land, proximity to population centers, and, above all…supportive policy.
The State of Virginia was a first mover in pro-data center legislation and policy, enacting its first data center tax exemption in 2009. Such incentives include a 6% sales and use tax exemption (on servers, generators, chillers, and server-related equipment) and tax deductibility of recruitment and training costs for new job creation.
Data centers have a complex relationship with local communities. They contribute to the local economies, but they can also strain local resources such as water and power.
Virginia lawmakers introduced more than a dozen bills in the 2024 session to add oversight to data center growth in the state. All these bills were defeated or carried over to the 2025 Virginia General Assembly Session.
Some would have required data centers to meet energy efficiency standards to garner building permits or tax exemptions.
Others focused on water and energy usage, carbon emissions, or noise impacts.
A few bills tried to limit where developers could build by requiring data centers to be far from schools, parks, or residential areas.
Others sought to have data centers disclose water, power, and energy use before they received county-level permit approvals.
Many elected officials preferred to wait for the results of a Joint Legislative Audit and Review Commission (JLARC) Study of Data Centers (approved at the end of 2023) before taking further action. The study will examine several issues surrounding data centers: noise, energy demand and supply, impacts on natural resources, policies to transition from fossil fuels to renewable energy sources, and economic impacts. There is no deadline for releasing the results.
Virginia’s leaders indicated that there will be no restraints or conditions on the industry’s growth for at least another year.
For more information on the complexities of recent and potential state-level urban and community planning policy in the Commonwealth or to receive expert support in planning your next project, be sure to Contact Our Team today!
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