Data centers are expanding into fresh locations, but power limits, land obtainability and public pushback are growing challenges.
Despite significant public pushback, North America’s data center industry is engaging in unprecedented expansion, with more than 66 gigawatts (GW) of capacity under construction as available colocation space remains exceptionally scarce, according to a new report from data center builder JLL.
JLL’s North America Data Center Report Midyear 2026, found that data center vacancy has remained at just 1% for the third consecutive year. The firm said the combination of rapidly growing digital services and artificial intelligence adoption is creating structural demand that continues to outpace the industry’s ability to bring new capacity online.
The shortage is so severe that many customers seeking data center space today are contracting for facilities that will not be delivered until 2028.
The exceptionally low vacancy rate also calls into question all of the talk of a data center bubble. With 99% of existing capacity occupied, JLL said the market’s fundamentals remain strong, particularly because many of its largest customers are among the world’s most profitable and highly rated companies.
For context, the 66 GW of data center capacity under construction in North America represents an electricity requirement greater than Germany, a country with approximately 84 million people and a $4.7 trillion economy.
Today, 77% of this capacity is being built in frontier markets, which are new markets rather than existing ones such as Northern Virginia and Santa Clara. West Texas has been the largest beneficiary of this industry shift, but Ohio, Louisiana, Indiana and the Carolinas have also benefited significantly. These markets had almost no data center capacity 10 years ago.
The shift is being driven largely by the industry’s growing need for electricity, land and infrastructure. Traditional markets such as Northern Virginia have become increasingly difficult to expand because of power constraints, land availability and lengthy utility interconnection timelines.
But JLL cautioned that the industry’s continued expansion will depend increasingly on winning public support, at a time of significant pushback from residents. “Supporting the next phase of growth will depend on building trust, addressing local concerns and delivering lasting benefits to host communities,” the report said.
In addition to residential pushback, power availability is becoming increasingly scarce. In primary data center markets, the average wait for a grid connection can exceed four years, pushing operators toward on-site generation, battery storage and other alternatives.
So despite a citizen revolt, the pace of construction is not likely to slow down anytime soon. With vacancy stuck at 1%, customers are signing leases for capacity that will not be available for several years.
The next generation of data center markets is increasingly being determined by access to electricity, land, fiber networks and favorable regulatory environments rather than just proximity to existing technology clusters alone.
The challenge is no longer simply building enough data centers. Developers must now find enough power, land, financing and community support to build them.
