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<\/p>\nWithout hitting pause on development negotiations, a South Bay city committee voted Wednesday to consider community investments. <\/p>\n
Aug 13, 2026<\/p>\n
Updated 3:23 pm PT<\/p>\n
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An aerial view of a 49.5-megawatt, three-level data center under construction in Vernon, California, on July 8, 2026. A City Council committee is calling for San Jos\u00e9\u2019s standards on data centers to specify how developers can make financial investments in their neighboring communities.\u00a0(Mario Tama\/Getty Images)<\/p>\n
San Jos\u00e9 wants data center developers<\/a> to pay for something beyond the buildings themselves: parks, job training, affordable housing, home solar and clean energy programs in the neighborhoods that end up living next to them.<\/p>\n A City Council committee voted Wednesday to direct city staff to fold community benefits<\/a> into their ongoing drafting of standards for data centers, and to study whether a share of the tax revenue those facilities generate could be reinvested in a defined area around each site.<\/p>\n Councilmember David Cohen framed it as filling a hole in work already underway. The city has been drafting environmental standards<\/a> since June, and he said the authors realized they should stipulate what residents might get in return.<\/p>\n The decision reflects a growing challenge as Silicon Valley leaders try to square the economic benefits of a growing data center industry with mounting concerns from residents who live near the projects. A recent Gallup<\/a> poll found that 7 in 10 Americans oppose constructing data centers for artificial intelligence in their local area, including nearly half who are strongly opposed. About a quarter favor these projects, with 7% strongly in favor.<\/p>\n Compared to other Bay Area cities, like Oakley, which have restricted<\/a> data center construction, San Jos\u00e9 has historically been more open to tech-related development and is already home to about 25 data centers as of last summer.\u00a0<\/p>\n The city struck a partnership with PG&E<\/a> that guaranteed power for 10 large projects and stopped the city\u2019s plans to build its own utility. PG&E committed to investing $2.6 billion <\/a>in South Bay infrastructure between 2026 and 2035. City officials estimated then that each data center could generate $3.4 million to $6.8 million a year for the city in utility and property taxes.<\/p>\n San Jos\u00e9 is now reviewing 11 more Data Center projects.<\/p>\n Downtown, developers want to stack them vertically alongside housing. A proposal at 180 Park Ave. would put an 11-story data center next to a 28-story residential tower and an expansion of The Tech Interactive science museum. Another project, at 300 S. First St., pairs a seven-story data center with three 30-story towers holding 1,164 apartments. A third, at 323 Terraine St., offers the city a choice between a residential building alone or a version that adds a seven-story data center beneath 345 units.<\/p>\n \u201cThis would also address what is clearly an unintended reverse incentive for rushed applications to be submitted now before sound regulations are in place,\u201d she said.<\/p>\n San Jos\u00e9 resident Evan Brooks told the committee that a rezoning effort tied to the marketing of a site for a data center is scheduled for council action Aug. 18 \u2014 one day before the city\u2019s first community listening session on the standards.<\/p>\n \u201cIf entitlements move first, projects filed in the interim escape rules the council has already determined are necessary,\u201d Brooks said.<\/p>\n Christopher Burton, the city\u2019s planning director, said a special use permit takes longer than six months to move through review, and that anything filed now would not reach a hearing before February or March. Cohen added that a new data center requires its own environmental impact report, pushing the timeline out at least a year.<\/p>\n Many residents who addressed the committee said the timeline was beside the point.\u00a0<\/p>\n \u201cThe trade-off you\u2019re asking us to accept is in exchange for some tax investment for our community to shoulder the health burdens imposed by AI data centers,\u201d Dasha Leeds, the conservation coordinator for the Sierra Club\u2019s Loma Prieta chapter, said, arguing that infrasound and generator emissions cannot be mitigated away.<\/p>\n Jasmine Jordan, a design student at San Jos\u00e9 State University, told the committee the buildings will cost her generation more than they deliver. She said the artificial intelligence economy has shrunk the entry-level job market she and her classmates are graduating into, and \u201cthe building of data centers in San Jos\u00e9 will destroy our environment further than it already has been.\u201d<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/07\/250725-SJPOWER-JG-8_qed.jpg\")
San Jos\u00e9 Mayor Matt Mahan speaks during a July 25, 2025, press conference in North San Jos\u00e9 about a partnership with PG&E intended to attract more data center development to the city. <\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/08\/20230801-SJCityHall-21-JY_qed.jpg\")
Pedestrians walk past City Hall in San Jos\u00e9, California, on Aug. 1, 2023.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/08\/20230801-SJCityHall-04-JY_qed.jpg\")
Flags at City Hall in San Jos\u00e9, California, on Aug. 1, 2023.<\/p>\n