Homebuilders Say Data Centers Are Outbidding Them for Land at ‘Impossible Prices’

Data center developers are paying “impossible prices” for land in fast-growing metro areas, outbidding homebuilders and removing land from the housing pipeline entirely, the National Association of Home Builders said in a research post published this week. The group’s analysis, first flagged by Realtor.com, focuses heavily on Northern Virginia’s “Data Center Alley,” where per-acre land prices for AI infrastructure are running 30 to 50 times what home builders can afford to pay.

“That demand is being met with land, and much of it is land that would otherwise have become housing,” NAHB said, citing more than $300 billion in 2025 capital-expenditure plans from Amazon, Microsoft, Google and Meta tied largely to AI infrastructure and cloud capacity.

Land deals running into the millions per acre

NAHB’s post lays out a string of recent Northern Virginia transactions: Amazon paid $700 million for about 189 acres in Prince William County in November 2025, days before SDC Capital Partners paid $615 million for 97 acres in Loudoun County — roughly $6.3 million per acre. Microsoft paid $465.5 million for about 124 acres in Prince William County in 2024, or about $3.75 million per acre. In Fairfax County, Starwood Capital Group agreed this year to pay $166.8 million, or about $4 million per acre, for 42 acres of county-owned land in Chantilly for potential data center use. In Ashburn, Amazon agreed to buy George Washington University’s roughly 120-acre former tech campus for $427 million, and a data center developer separately offered homeowners in Ashburn’s Regency neighborhood about $4.4 million per acre to assemble a 130-acre site.

By contrast, a 2025 land price analysis NAHB cited put median land prices at about $125,000 per acre in Loudoun County and $93,750 per acre in Prince William County. “Home builders cannot bid in that market, because a builder’s land budget is capped by what home buyers can afford,” NAHB said. “Every dollar spent on land gets passed through to the price of the finished home, and buyers have no room to absorb it.”

Virginia’s Joint Legislative Audit and Review Commission has reported that data centers accounted for 20% to 30% of land development in Loudoun and Prince William counties from 2013 to 2021, with the pace increasing since. At a January legislative hearing, Andrew Clark, a lobbyist for the Home Builders Association of Virginia, told state lawmakers data centers are “outbidding residential developers” across much of Northern Virginia.

Beyond Virginia: Illinois, Texas and Nevada

NAHB said the pattern is not confined to one state. In Elk Grove Village, Ill., Stream Data Centers bought and demolished 55 homes to make way for a roughly 2 million-square-foot data center campus. Near Dallas, land along U.S. Route 67 that sold for $20,000 to $40,000 an acre a few years ago was fetching more than $350,000 an acre by 2026, according to reporting NAHB cited. In North Las Vegas, VanTrust Real Estate sold nearly 205 acres in Apex Industrial Park to Novva Data Centers for $181 million in 2025 — more than $880,000 per acre.

The squeeze is sharpest in Northern Virginia, where the Virginia Association of Realtors has told the state’s Housing Commission the region has an estimated shortage of about 188,000 market-rate homes, and the Northern Virginia Association of Realtors has put the region’s median home price at $750,000 in 2025, up 54% over the past decade, with the average first-time buyer’s age rising to 40. “Every acre that moves into the data center pipeline makes those numbers worse,” NAHB said.

Tax breaks and a housing shortage NAHB says is going unaddressed

NAHB noted that Virginia’s sales-and-use tax exemption for qualifying data center equipment — covering computer equipment and related infrastructure — saved data center operators at least $2.7 billion in state taxes from fiscal 2015 through fiscal 2024, including roughly $1 billion in fiscal 2024 alone, according to JLARC. Home builders receive no comparable statewide subsidy. Bills that passed during Virginia’s 2026 legislative session addressed site assessments, water-use reporting and generator permits for high-energy-use facilities, but NAHB said none of them preserve buildable land for housing or give builders a way to compete for it.

NAHB, which estimates the country needs roughly 1.5 million more homes and separately found that 65% of U.S. households could not afford a median-priced new home at a 6% mortgage rate, said it is not aware of any litigation in which a homebuilder has directly sued a data center operator over land competition — the legal fights so far have come from residents and preservation groups objecting to siting, noise or environmental impacts, not from builders themselves.

What it means

The verified facts are the transaction prices and government data NAHB compiled from public deed records, JLARC reports and Realtor association figures. NAHB’s framing — that this is a zero-sum land competition in which “the data center wins, the land is gone, and the houses that might have been built there are never built” — is the trade association’s own advocacy position, not a neutral academic finding, and NAHB has an evident interest in the policy fights over data center siting and tax treatment. What to watch: whether more states follow Virginia in weighing data-center-specific legislation, and whether any of that legislation directly addresses land competition rather than just water and power impacts. For related coverage, see RealtyWire’s reporting on Amazon’s raised 2026 AI capex fueling the data center construction boom and Granite Construction’s tripled data-center backlog.