Stargate data center, a massive 4 million square foot complex being built in Abilene, is set to be completed by the end of the year.
This is a hub of sorts for a huge AI project that the president and several companies announced last year. This project has brought in some 6,000 workers to a town of just over 100,000.
The arrival of all those workers, along with an already existing shortage of housing, has driven up rent prices dramatically – in effect, causing even more of a housing crisis than the town had before.
Andrew Chow, a correspondent for Time Magazine, and has been writing about this housing crisis in Abilene and joined Texas Standard to discuss. Listen to the interview in the player above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: What brought you to look into what was happening in Abilene? I gather you’re based out of Washington, D.C.?
Andrew Chow: That’s right, but this is part of a larger reporting project that I’ve done over the last couple of years about how data centers are remaking America.
So I’ve traveled to Granbury, Texas, and Memphis, and everywhere the issues caused by the data centers are a little bit different. In Granbury it was noise pollution, and in Memphis it was concerns about air quality. So I didn’t quite know actually what the effects were going to be when I showed up in Abilene in November.
I wanted to check it out because it’s the flagship location of Donald Trump’s big AI infrastructure project that he announced in the first week of his presidency. I wanted to see the scope and the scale of this massive, massive $500 billion project that he had announced.
And when I got to Abilene, all anybody wanted to talk about was housing.
Housing, housing, housing. What were you hearing when it came to housing?
Yeah, so the first thing that people wanted to sort of say is that it seemed like a classic supply and demand thing.
So you have a massive rise in demand because all these out-of-town workers are coming. They’re making good wages often working at the plant, constructing it really, really fast. But Abilene already had a housing crunch, local housing experts told me. And so that was really driving up rental prices in an unsustainable way.
Now, landlords obviously love this because they can charge way, way more. But this is really causing vulnerable or low-income people… It’s giving them nowhere to go. So a lot more people are being forced out onto the streets.
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So, when we talk about the severity of the housing crunch there, has there been any sign of let-up? I mean, are we seeing new construction in Abilene to try to offset the numbers of people who are coming to town to work on this huge infrastructure project?
The one major thing that the city has done is greenlit RV parks to hold thousands of more residents. Last I checked, they’re not available.
But all the RV parks are maxed-out right now. And I was saying in a motel – the motels are maxed-out, too. The city says they’re trying to work on solutions, but it seems like they were maybe caught a little bit off guard and didn’t understand maybe how severe this problem was.
So the RV parks are coming, but they have not arrived yet. And compounding the problem is that this Stargate data center is not the only data center coming to town. There are a lot more coming to the area, and that could really exacerbate the issue.
I would imagine, though, that at a time when you’ve got a real premium on places to live that… Well, as you were saying about landlords, for example, they’re probably seeing the ability to raise rental rates… Are we seeing home prices going up as well?
I mean, is there this housing boom time in Abilene right now?
Yeah, that’s what I’ve heard from one housing expert, that housing prices are going up as well. So yes, this is an unevenly distributed impact where it’s really benefiting some people and it’s hurting others.
What is the city trying to do about… I mean, are they facing now a bona fide homeless problem like what you might see in a much larger city like Dallas or Houston or something like that? Or is this more low key?
I spent some time driving around the city with a community worker who says that the homelessness issue in Abilene is the worst he’s ever seen it in his decade-plus in the city. It seems to me and to him that it’s gotten quite worse, I can’t say compared to Dallas.
The city says, you know, that the data center is helping fuel the local economy, like the hotels, the restaurants, the trades people, and that they’re trying to work on solutions for the housing crunch.
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But once these data centers are built out, I would imagine that they’re not going to sustain the number of jobs that, of course, you’re currently seeing there in Abilene. Right now, it’s very much a spike.
Is it possible that suddenly we could see prices crashing and, perhaps because of that, a reluctance among builders to make big investments in housing projects right now?
That’s right. So one of the big things about data centers is all of the jobs and the investment is front-loaded in the construction. Once these data centers go up, there’s actually very few jobs inside the working data center. So a lot these workers will simply leave town and go to the next construction project.
So there is that risk that if you overbuild housing now, then it could really fall fallow later. I think that’s probably one of the reasons why they’re looking for… They greenlit the RV parks first instead of long-term housing, but obviously that means there’s still a huge crunch right now.
Was there anything that really surprised you about putting together this story in Abilene? One of the reasons I asked that is because you mentioned that you’ve been going to other cities where you’ve seen the AI boom play out. And I’m curious, are those other places not experiencing these sort of housing issues or was there something unique to Abiline that you thought, wow, this is, why is this happening?
The issue of housing seems most acute in Abilene compared to other places right now. It’s funny because, yeah, I talked to data center activists across the country and they all are worried about a slightly different thing, whether it’s their electricity bills going up or a potential risk of grid instability or water.
So it sort of manifests differently based on the locale and it seems like housing was the main impact here so far.
Did you get a sense that local officials have any answers about what to do at least in the short term?
They pointed to the RV parks, they say they’re trying to work with local builders to find solutions, but this is almost a year since the project was really greenlit and it doesn’t seem like they have a real strategy to deal with the issue right now to get people into shelters, into homes.
