In Praise of the Windowless Box: How California’s first data-center ban reveals what cities have forgotten
In June 2026, Monterey Park became the first city in America to permanently ban new data centers. Residents didn’t just pack city council meetings for months—86 percent voted to forbid a building that would never enroll children in local schools, clog rush-hour traffic, or ask the city to build another park, library, or recreation program.
It was a quiet, windowless neighbor, and it was treated like an invasion.
That is not just a story about one proposed building. It reveals the standard cities use to judge every form of private development.
Every Building Gets a Grade
After decades attending city council meetings, I’ve learned that local governments develop opinions about every type of building on the map. Housing is said to “burden services.” Warehouses “don’t employ enough people.” Retail is tolerated because it generates sales-tax revenue. Notice what is really being graded: not the value a property creates for its owner or the mutually beneficial exchanges it makes possible, but what it contributes to the city’s own budget.
Once cities begin judging development by what it contributes financially rather than by whether it violates the rights of its neighbors, growth itself becomes a fiscal strategy—a way to finance yesterday’s promises. That is how cities convince themselves they are practicing good fiscal management while quietly expanding their own missions. The result is a demographic Ponzi scheme with a master plan and public comment periods.
Then comes the data center.
It has few employees, little traffic, no schoolchildren, and relatively little demand for municipal services. Yet because it fits none of the categories with which city halls are familiar—not housing, not retail, not a traditional employment center—it becomes the object of extraordinary suspicion. The left-wing snobs and the crony dealmakers fail the same test.
The snobs want to ban the data center because it offends “community character”—usually the tastes of people who already got theirs, sometimes dressed up as concern for the environment. Either way, they elevate a fuzzy concept over the property owner’s right to build and treat the neighborhood’s preferences as a veto over a lawful use. Nor are the snobs always a crowd of homeowners; sometimes they sit on the council. In 2025, Tucson’s city council voted unanimously to reject the Amazon-linked Project Blue, turning away tens of millions in projected tax revenue and thousands of jobs on the ground that the industry was not “sustainable” and that the city needed protecting from it.
The crony dealmakers commit the same error with the opposite sign. They do not defend the owner’s right to build; they ask what the city can extract—a tax abatement, a ribbon cutting, a negotiated tribute. Two towns away from Monterey Park, the City of Industry spent 2025 quietly rewriting its code to permit data centers almost anywhere and wooing developers to land one. Out in the desert, Coachella’s council signed a data-center agreement, then tore it up months later and moved to ban the very use it had courted. The same building is graded first as a prize and then as a menace, never once as a right.
Both approaches make the same mistake. One asks what should be prohibited; the other asks what government can extract. Neither asks the only question that matters: does the proposed use respect the rights of the property owner and their neighbors?
The corruption was never the data center. It was the abatement—and, more deeply, the idea that government should decide which lawful land uses deserve encouragement and which deserve discouragement.
What Cities Are For
A city should neither bribe growth into existence nor legislate it out of existence. Its responsibility is simpler and harder: protect individual rights, maintain objective rules, and ensure that each use bears the costs it creates. Growth is not a municipal objective. It is something free people choose.
This is also the answer to the objection that Monterey Park was simply democracy at work—the community deciding what it wants. There is something to that: a community’s character is real, and the wish to shape it is not disreputable. But a right is precisely the thing a majority may not vote away. The property owner whose permits were denied was almost certainly not among the thousands of residents who voted to forbid his project, and he bears a cost none of them will. “The community decided what it wanted” turns out to mean the many decided what the few may do with their own land. That is not self-government. It is the oldest problem in politics wearing a zoning hat.
That is not to say development is costless. More residents require more roads, policing, and other services. The point is that those costs can be honestly assigned and funded. What turns every newcomer into a fiscal question mark is not the cost of protecting his rights but the endless expansion of government activities layered on top.
Under that standard, the data center is easy to understand. It is one of the lowest-burden neighbors a city is likely to receive. It pays taxes while demanding comparatively little in municipal services. Nobody across town should subsidize it—but nobody should be allowed to outlaw it simply because it fails an aesthetic test or popularity contest.
The objections raised in Monterey Park deserve to be taken seriously, but they should also be properly classified. Water, noise, and backup-diesel emissions are real concerns where they exist. They should be addressed through objective emissions standards, setbacks, and market-priced resources—not through categorical bans.
The largest concern in Monterey Park was electricity; The data center project reportedly would have drawn roughly twice the power the city itself uses. The fear is widely felt, so it deserves a plain answer rather than a dodge: does a giant new customer raise everyone’s rates? Not by itself—and often the opposite. A data center is a steady, around-the-clock buyer, and a large steady buyer helps spread the fixed costs of the system across more kilowatt-hours, which is why the states that have absorbed the most new demand have generally seen rates rise slower, not faster, than the states that turned it away. Where rates have spiked—the Mid-Atlantic being the cautionary case—the culprit is a shortage of reliable supply that policy created by retiring power plants faster than it permitted new ones, not the new customer as such. And a fast-growing share of new facilities now build their own generation, leaning on no one’s grid at all. Where added capacity is genuinely required, that is a matter of pricing and contracts: the customer creating the demand pays for it, so the load carries its own cost instead of landing on everyone else’s bill. To ban the building instead is to blame the newcomer you can see for a cost imposed by the energy policy you cannot.
California’s Choice
California should understand this distinction better than most. The state wants to lead the next generation of artificial intelligence while local governments increasingly resist the physical facilities that make that technology possible. Whatever one thinks of AI, Americans will keep building the computing infrastructure of the modern economy. China certainly is not waiting. The real question is not whether California can capture the jobs and tax base; It is whether California will let its own residents build at all, or drive them, and their freedom to invest, to states and nations that will.
Data centers are not valuable because government says they are. They are valuable if people voluntarily choose to use the services they make possible. Cities have no business deciding which industries deserve to exist. Their proper role is not to engineer the local economy but to protect the freedom that allows entrepreneurs, investors, and consumers to discover what creates value.
And California’s fiscal challenges will not be eased by banning one of the least burdensome forms of development.
Under that standard, the windowless box stops looking like a threat and reveals itself for what it is: one of the most productive and least demanding neighbors a community will ever receive—private citizens quietly building the infrastructure of a better future. That is not something to fear, or to grade, or to permit grudgingly. It is something to welcome.
Mark Moses is a senior fellow with the California Policy Center. He has thirty years of experience in local government administration and finance. His book, The Municipal Financial Crisis – A Framework for Understanding and Fixing Government Budgeting, was published by Palgrave Macmillan and is available from major online booksellers.
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