Few issues this year have roused San Jose residents to pack public meetings quite like data centers — and they’re not alone.

Across the country, many cities are facing intense backlash over the development of these projects — which, while promising millions in potential revenue for municipalities that welcome them, carry massive water and energy demands and raise quality-of-life concerns like noise pollution.

While neighboring Bay Area cities have paused development to consider bans, San Jose is taking a different path by drafting citywide regulations — even with between 25 and 40 data centers already operating inside city limits. The rules will focus on energy consumption and sourcing, water conservation and recycled water infrastructure, and air quality and noise protocols — while ensuring that as technologies evolve, the standards remain flexible enough to adapt.

Yet despite mounting pushback, and as San Jose works to establish clear guardrails, the city is unlikely to shut the door on data centers completely.

Earlier this year, San Jose closed an estimated $50 million budget shortfall through some program and service cuts and delayed public building projects. With data centers projected to generate between $3 million and $7 million per site, the city is banking on the projects as part of the long-term solution to its financial struggles.

But San Jose’s overall direction will largely depend on the consensus — or lack thereof — within the next City Council, where the winners of three council races will cast pivotal votes on regulating data center expansion alongside pressing debates over housing growth, cost of living and public safety, among other issues in the Bay Area’s largest city.

Although proposed rules may come before the council as early as December, any initial policies can still be updated or revised by the incoming council.

Voters in District 9, in San Jose’s southwest, will choose a representative for the council’s only open seat as Vice Mayor Pam Foley finishes her final term. The race features former police officer and family therapist Genny Altwer against public works employee Gordon Chester, two first-time candidates who emerged from the primary.

Meanwhile on the East Side, District 7 incumbent Bien Doan, a retired firefighter, and District 5 incumbent Peter Ortiz, a former Mt. Pleasant Elementary and Santa Clara County Board of Education trustee, defend their seats against notable challengers. Doan faces East Side Union High School District trustee Van Le, while Ortiz takes on Nora Campos, a former councilmember and state assemblymember.

The districts represent diverse demographics and economic backgrounds, but each has an equal say in shaping city policy. Councilmembers in San Jose — including the mayor — are elected to two four-year terms, serve full-time, and are equipped with full-time staff.

Transparency is a primary concern for residents wary of data center growth, according to San Jose State University engineering professor Ahmed Banafa, who has written five books on artificial intelligence since the technology became widely available to the public.

“Transparency is, you don’t go and have a data center next to us without us knowing about it,” Banafa said. “You have to be clear about the water and the electric power usage.”

While all candidates agree that tech firms — not residents — must cover the costs of building and maintaining data center infrastructure, their individual approaches differ in scope and emphasis. Some were specific about the exact restrictions they want to see, while others focused on broader citywide guidelines.

Ortiz co-authored a memo earlier this month proposing to ban nondisclosure agreements with private firms, citing concerns that developers could use secrecy agreements to hide heavy energy, water and infrastructure demands from the public.

He warned that allowing data centers to expand in the city must not result in higher utility bills for local families. “We need safeguards so that residential and small-business ratepayers are not disproportionately carrying infrastructure costs associated with major commercial energy users,” Ortiz said. While not yet specifying restrictions, Ortiz said he wants to see further information on how the data centers impact local “demands on electricity, water and other public infrastructure.”

His challenger, Campos, specified limits she wanted to see — that data centers be set back from homes, daycares and schools while requiring companies to use recycled water for cooling equipment. “There is still much to learn about the quickly evolving industry and the technology that they use in data centers,” Campos said, adding that grid protections are crucial for residents who “are already paying high electric and natural gas costs.”

In neighboring District 7, incumbent Doan — seeking to become the first district representative in 16 years to win reelection — framed data center growth around Silicon Valley’s global economic competitiveness.

Warning against losing digital infrastructure to overseas competitors, Doan argued that San Jose should embrace innovation while setting firm standards for noise, air quality and utility demands. “The goal should be encouraging responsible development, not stopping development,” Doan said, advocating for ratepayer protections and advanced cooling technologies rather than bans. Doan voted in favor of a council directive instructing city staff to hold public outreach sessions while drafting regulations.

His opponent, Le, agreed that residents must be protected from utility rate hikes, emphasizing that San Jose must evaluate the comprehensive impacts of data center proposals as a whole rather than considering projects in isolation.

“San Jose has taken steps to encourage data center development,” Le said. “My concern is whether adequate protections for residents are keeping pace.”

While formal rules have yet to come before the council, an August community forum drew a packed audience where residents voiced deep apprehension — if not outright opposition — to future data center growth. Mayor Matt Mahan, who attended the session, has been pushing for a more nuanced view of data centers, arguing that the city cannot “bury its head in the sand,” but must instead lead the way in regulating data center development.

Chester, who pulled in second in a close race for District 9 in the primary, cautioned that financial incentives must be weighed against everyday neighborhood impacts like noise, backup generator emissions and water demands. “I will evaluate proposals on their benefits and their impacts,” Chester said. “Economic development matters, but so does protecting the quality of life of the people who already live here.”

Altwer, who finished first in the primary, said she would hold tech firms to strict standards.

“It’s local government’s job to ensure Big Tech is held accountable to these rules of the road, and that will be my focus,” Altwer said.

Clean Water Action program manager and San Jose resident Andria Ventura said economic benefits won’t trickle down to residents if facilities degrade local health and water quality. While not calling out a specific project, Ventura warned that alternative coolants marketed to conserve water often rely on toxic PFAS, “forever chemicals,” and was skeptical that projected tax revenue would outweigh environmental costs.

“What is not being talked about enough are the toxic chemicals used within the facilities that threaten our drinking water sources and air,” Ventura said.

“We need leadership that isn’t just attracted to new bright, shiny technology,” she added. “It doesn’t make sense to bet on potential tax revenues from data centers when, if such funds come to fruition, they’ll be needed to address the harm these facilities cause.”

The next council faces what could be among its most consequential decisions amid rapid, AI-driven growth — and Banafa said at minimum, leaders must be upfront about the real-world trade-offs.

“AI is digital, but it has a physical footprint — and we can see it, we can feel it, and we can hear it,” he said.