Data Centers Bring Boom and Strain to Rural Dakotas, Leading to Moratorium in Aberdeen
A large data center project in Ellendale, North Dakota, is bringing significant economic growth, but also severe strain on local housing, infrastructure, and resources. This growth has led the nearby city of Aberdeen, South Dakota, to enact a temporary moratorium on data center development. The article explores the mixed reactions from rural residents who are experiencing both the benefits and challenges of the booming AI industry.
The construction of the $11 billion Polaris Forge 1 data center by Applied Digital in Ellendale, North Dakota, has dramatically transformed the small town, bringing both economic benefits and significant challenges. The facility, which will encompass 2.5 million square feet and deliver 400 megawatts of power, employs over 2,000 workers, straining the area's housing supply and leading to doubled rents and increased traffic. While some residents express suspicion about tech companies' intentions and lament the changes, others, like retired counselor Deborah Elhard and Mayor Don Flaherty, view the development pragmatically, noting that the town was in decline prior to the data center's arrival.
Applied Digital CEO Wes Cummins highlighted Ellendale's ideal conditions for data centers, including cold winters for cooling and access to excess wind energy, which has resulted in anticipated electric bill reductions for residents. The company's efforts, including using a closed-loop water system and annexing the facility into Ellendale, have boosted the town's sales tax revenue from $400,000 annually to $3.5 million in just seven months of 2026, enabling infrastructure and community improvements.
However, the rapid influx of workers has caused "growing pains," according to Mayor Flaherty, with severe housing shortages extending to nearby communities like Oakes, where rents have skyrocketed. The impact also reached Aberdeen, South Dakota, where the housing and hospitality sectors are overwhelmed, leading the city to move a state softball tournament in 2027 due to hotel scarcity. In response to these pressures, the Aberdeen City Council, led by Mayor Travis Schaunaman, unanimously approved a temporary moratorium on data centers.
The article contrasts the California perspective, which often decries data centers as polluting, with the more pragmatic approach in the Dakotas, where communities are grappling directly with the boom-and-bust cycles of industrial development. While demand for computing power is expected to grow, the long-term economic stability and social impacts of these large-scale projects in rural America remain uncertain.