As the debate continues about whether Lansing should welcome a data center to the city, a city councilmember is floating an idea about using a portion of potential data center revenue to fund housing services.
The ordinance would set aside 10% of revenue the Lansing Board of Water and Light receives from data center utility use to fund housing services – like building new homes, housing the homeless and preventing residents from losing their homes.
That concept is already a reality in one Virginia county. This week, WKAR News took a closer look at what's happening there.
How one Virginia county is already doing it
In May 2024, Henrico County, near Richmond, established its $60 million Affordable Housing Trust Fund using property tax revenue from data centers.
The county is home to dozens of data centers.
So far, the fund has awarded more than 380 homes, according to Shelby Carney. She’s the special project manager at the Partnership for Housing Affordability – the nonprofit that administers the trust.
“Those will be available to buyers earning 60% all the way up to 120% of the area median income,” Carney said. “The price points we've been able to deliver thus far have ranged from as low as $185,000 for a two bedroom, two bath condo, all the way up to $350,000 for larger products, like a four bedroom, single family detached home.”
Who qualifies and what the housing looks like
The funds are only available for first-time buyers to support home ownership and wealth building, Carney said.
Since the founding of the trust, Henrico County has limited further data center development. Carney said this hasn’t stopped the money flowing into the trust.
“We already have so many [data centers] currently operating in the county. With that leverage, the county has been able to increase the tax rate at which we do tax data centers,” Carney said. “That has, from what we've seen in our locality, expanded opportunities for paying into the Affordable Housing Trust Fund and other initiatives.”
Carney said she hasn’t heard of other municipalities using data center revenue towards affordable housing – it seems to be unique to Henrico County.
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Peter Spadafore is the Lansing city council member who introduced the idea to the city. He said his plan wasn’t inspired by Henrico County but came out of city budget discussions.
“Mid last year, we started hearing conversations about the potential location of the Deep Green data center here in Lansing. Concurrently, we historically have had conversations about not enough resources to help those experiencing homelessness,” Spadafore said.
“So I saw this as a chance to recognize we may see some increased revenues and put a line in the sand for what I thought was an important budget line item to earmark some of those dollars for,” he said.
Deep Green is the data center proposed for downtown Lansing in partnership with the Board of Water and Light.
Spadafore said he doesn’t want the housing fund ordinance tied explicitly to the ongoing Deep Green debate – especially because “there's a lot of emotion around the conversation around data centers.”
He also said it’s a “work in progress,” and things like the percentage of revenue and specific projects could change.
“The initial draft might not be the right words for what the Housing Support Fund should be used for. Maybe it should be more infrastructure based right to help folks make repairs to their homes, or maybe there's another service we should be looking at to add to,” Spadafore said.
Spadafore said he wants to see new or expanded services.
Support, skepticism, and open questions
The whole idea has received both positive and negative feedback, Spadafore said.
“My first impression is that it’s a way to manipulate support for the proposed data center (something people are already skeptical about) by tying it to something that many people in Lansing care about (housing),” Lansing resident Jen Kingsbury wrote in a community Facebook thread.
Others raised concerns about data centers’ potential impacts to utility bills and the environment.
Brent Taylor is the president and CEO of Habitat for Humanity Capital Region. He said the organization supports “anything that's going to push additional funding into the affordable housing space.”
He said data centers will likely bring significant revenue to utility companies, so “to earmark a portion of that really makes a lot of sense.”
Taylor said if the ordinance were to pass, funds should go through organizations like Habitat for Humanity and Capital Area Housing Partnership – like how the Virginia trust operates.
“Typically, we feel like we can be most efficient and most cost effective with dollars in terms of the amount of impact we're able to create,” he said.
Taylor said investing in single family homes – through new construction and fixing old properties – is a critical solution to the housing crisis.
“I think the best partnerships come when we start to reach out and partner with organizations that maybe on a surface level, it might not look like a natural partnership, right?” Taylor said. “This proposal that's on hand for BWL, I think it should receive a lot of community support. It certainly seems to me like one of those really critical partnerships that could engineer a significant change in the housing crisis here in the area.”
The Lansing Board of Water and Light is a financial supporter of WKAR.
