AI Boom Fuels Community Opposition as Data Centres Invade Residential Neighborhoods

The fight over data centres at the heart of Japanese cities

When Munekazu and Erin Tanikawa got the keys to their brand new apartment in a Tokyo commuter town in 2022, little did the married couple know that a land deal was being finalised that would upend their lives. Four months after moving in, a special-purpose vehicle, backed by Canadian pension fund CPP Investments, US asset manager Fidelity and local trading house Mitsui & Co, bought the parking lot in front of their balcony to develop a 52-metre-tall data centre. Since then, their ¥50mn ($312,000) property is estimated to have lost about a quarter of its value. The couple complain about expected heat and noise from the planned data centre, and the risks associated with 1.2mn tonnes of stored fuel -- for a backup generator -- on their doorstep. They have gathered more than 13,000 signatures for their petition against its construction and launched a legal case against the entity that approved it. "I knew something would be built there but I never thought it would be a data centre," said Erin Tanikawa. Japanese prime minister Sanae Takaichi has placed AI at the heart of her economic growth strategy and analysts expect a huge surge in data centres. There are an estimated 300 data centres in Japan and the $23bn data centre market is expected to grow almost 50 per cent in size by 2030 with 90 per cent of sites concentrated in the densely populated Greater Tokyo and Osaka regions, according to JLL, a real estate company. "This is the AI gold rush," said Satoshi Oikawa, a lawyer representing citizen groups in two cases opposing data centres bordering their residences. While communities, often rural, have complained about data centres in the US and Europe, the backlash in Japan is centred on facilities embedded in the heart of residential and commercial areas. This reflects mountainous Japan's constricted land availability -- a data centre is even planned next to the capital's famous Tokyo Tower -- and foreshadows risks for other nations as AI drives data processing demand. Local residents, academics and lawyers said the disputes exposed Japan's outdated building code as well as the lure of deep-pocketed data centre developers for cash-strapped local authorities. While those challenges are global, critics claim that Japan is idiosyncratic in classifying data centres as offices rather than factories or warehouses and suffers from a bubble-era hangover of loose zoning rules and light-touch urban planning, which prioritise developers over communities. Critics argue the intensive power, water use and large volume of machinery in data centres make them more akin to industrial facilities than offices. "Japan's urban planning, land use and building standards systems are particularly old. Precisely because they are old, they were never designed to anticipate recent uses like data centres," said Tetsuharu Oba, a professor specialising in urban management at Kyoto University. "There is a need to update the system." The law has not been designed "to protect people's lives", said Oikawa, describing data centres as "the AI era warehouse or factory". Japan's biggest data centre operator NTT Data, whose affiliate NTT Facilities is the project designer, admitted the need for regulatory overhaul. "The rapid scaling and increasing sophistication of modern data centres have made it harder to view them as equivalent to conventional office buildings," it said. An official at the land ministry said there were no immediate plans to create a new classification for data centres in the Building Standards Act and local authorities could use other laws to restrict unwanted projects. The disputed data centre is in Inzai City's Chiba New Town Chuo; and Inzai City, like many towns around the world, is keen to collect property taxes from data centres and investors. "This is the frontier of capitalism but is it really good for this area over 50 or 100 years?" said Toshiyuki Takita, a member of the Chiba prefectural assembly, the broader region in which Inzai is located. Inzai 5, the special purpose company that owns the land, said that it followed all relevant laws and would try to minimise noise and landscape impact. It added that the developer of the Tanikawas' condominium had agreed to tell buyers a high-rise structure could be built there. The UK's Colt Data Centre Services is the developer and operator of the data centre. There are several other data centres near the Tanikawas' apartment, including four developed by Colt, at least one of which Microsoft uses. Following public backlash to the approval, Inzai City authorities did ask Colt to discontinue the project and offered it alternative plots of land. Colt did not want to delay the project and argued it would be more efficient to be near other data centres, according to meeting minutes. Inzai 5 said that "there were no other candidate sites that could be acquired" at the time the land became available and the proposal to move "lacked sufficient specificity". Inzai City said in a statement that under the rule of law it could not deny approval to the project but acknowledged data centre expansion has created "major issues" for residents and the issues "cannot be adequately addressed within the framework of current rules". Bureaucrats and Inzai residents have criticised the developer for failing to secure community support for the project, only starting to engage with the community three years after it first approached Inzai City officials in June 2022. Some are reminded of the government push to mega-solar power plants after the Fukushima nuclear disaster, resulting in huge overdevelopment. Takaichi is now moving to crack down on their development. "The national government wants rapid development at almost any cost," said Munekazu Tanikawa. "They seem to want to normalise this, assuming that the Japanese public will gradually get used to it. But the scale of the impact is expanding too quickly."

Under a cloud: the growing resentment against the massive datacentres sprouting across Australian cities

When West Footscray resident Sean Brown takes his 19-month-old boy to the park, their walk passes an imposing new building cheerily spruiked as "Australia's largest hyperscale AI factory", a datacentre called M3. He hates it: the construction noise from its constant expansion, the looming towers and the insistent background hum, the exhaust from the growing array of diesel generators that power the ranks of servers inside. And he worries what it represents for his young child's future. "He is growing - neurologically, pulmonarily, physically - in the shadow of a facility whose cumulative environmental impact ... has never been assessed," Brown says. "They're building something which is, frankly, terrible for the community. There's no upside to it and it's just getting worse." The centre has already grown several times, fuelling the endless appetite of this age of digital services and generative AI. By the end of 2027, should fast-track planning approval be granted by the Victorian government, this datacentre less than 10km from the Melbourne CBD will have doubled in size again to cover 10 hectares, drawing 225MW of power and running 24/7. Diesel generators on the site are reportedly expanding from 40 today to 100 at completion. Eight months ago, NextDC's chief executive, Craig Scroggie, posted a video of the M3 site on LinkedIn and said the speed and the scale of its expansion were "stunning". "We're building Australia's largest hyperscale AI factory purpose-built for the new AI era of accelerated computing," he wrote. "This is how we build Australia's digital future: speed, scale, sovereign, sustainable & secure." Australia is under pressure to compete in the growing datacentre industry amid the promises of an AI boom. New investments are hailed as vital downpayments on the country's economic future. But those living closest to these massive new data halls feel that their neighbourhood peace is being sacrificed on the altar of progress. Guardian Australia spoke to residents in three states about their concerns, which are emblematic of the growing opposition to these developments across the country. Those living closest to datacentres argue they should be moved further away from residential areas in the country's biggest cities. The M3 datacentre is "just a really inappropriate location for what is pretty much [an] intensive industrial building," Brown says. "It's right next to people's houses." Brown says the original zoning decisions did not take into account the sheer scale of the datacentres. He works in the tech sector, and understands the need for datacentres. But he argues the datacentre boom needs to be planned better. "It's like they've just gone: 'Let's just maximise this and don't even consider the impact," he said. A spokesperson for NextDC says the project is being delivered in accordance with local and state government processes and regulatory requirements, and it has processes in place to "manage and respond to feedback". The Maribyrnong local council has expressed its opposition to the expansion, but it is now awaiting planning approval from the Victorian government. A spokesperson for the Victorian planning minister, Sonia Kilkenny, said the proposal to expand the datacentre was under consideration and it would be inappropriate to comment further. Near Lane Cove River, 9km from the Sydney CBD, a proposal for a new 90MW datacentre named Project Mars is now being considered by the NSW government. It would be the fourth in the area: datacentres take up 40% of local industrial zones. The council argues the nearly 22,000sqm, three-storey centre exceeds height limitations and would be visually prominent next to bushland and residential zones. Local resident Daniel Bolger says it will sit next to what he calls "the lungs of Lane Cove: Blackman Park. It used to be a tip, but was turned into a park and sporting hub "used by 50% of the suburb" each weekend, he says. "[Now] they're going to put datacentres right next to it." He says the council has been sidelined, and there are community concerns over the proximity to schools of the centres being developed, and the pure power draw. "This is the cluster issue," Bolger says. The NSW planning minister, Paul Scully, says the public are encouraged to have their say during the consultation and a full merit-based assessment, including an assessment of energy needs, will be conducted before a decision is made. "Datacentres are an important part of the infrastructure and digital architecture of modern economies," he says. The developer, Goodman Property, did not respond to a request for comment. In Hazelmere, 15km east of Perth in Western Australia, community opposition is growing to a planned 15,000sqm, three-storey, up-to 120MW datacentre. "It's huge. Bigger than a Bunnings warehouse," Kate Herren, a local resident and a fundraising coordinator for the environmental group Trillion Trees Australia, says. "The location we feel is wholly unsuitable for a proposal of [this] size and scale." Walter McGuire, chair of the Bibbul Ngarma Aboriginal Association, says the Noongar people have a role and responsibility to care for the Mandoon Bilya (Helena River). "Giant datacentres belong in industrial areas, not on the banks of our rivers and wetlands," he says. "[It] is a culturally significant river, and the wetlands that surround it ... So we have grave concerns about its impact on the river and the surrounding ecosystem." The proposal is now before the council. A spokesperson for the City of Swan said it was unable to comment. A spokesperson for GreenSquareDC, the company behind the project, said it was in an established industrial area with major transport and power infrastructure. "We clearly understand there is interest in this proposal given its proximity to existing businesses and the local school," the spokesperson says. "These considerations are taken seriously, and GreenSquare is committed to engaging constructively throughout the planning process." Data Centres Australia's chief executive, Belinda Dennett, says the industry is aware that construction of these centres can be confronting "particularly where industrial zoned land meets with residential areas", but maintains developers meet strict environmental and building standards, and were seeking to minimise disruption. She says Australia has a "significant opportunity" to benefit from datacentre investment, through new businesses and jobs. "These benefits will flow to the local communities that neighbour datacentres too." On Friday, she told a NSW parliamentary inquiry into the sector that if Australia does not develop its own AI infrastructure, it will become "an importer of someone else's technology, that has no Australian culture, values or laws built into that". The alternative, she said: "we build that here and we have some say [and] control over what that looks like".