Zoomed out view of the former industrial site located in Jacinto City, Texas. Photo: Google Earth
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A former industrial property in southeast Houston is being marketed as a major AI and hyperscale data center site, highlighting how Houston’s energy infrastructure is becoming a selling point in the AI boom.
The proposed site, located in Jacinto City about eight miles east of downtown Houston, could become one of the region’s largest—and potentially loudest—data center developments based on its size and projected electricity demand.
The space is being marketed to hold a capacity of up to 79 megawatts, based on an investment brochure from real estate agency Marcus and Millichap. For reference, that is enough electricity to power a small city, or about 80,000 homes, according to metrics used by the U.S. Energy Information Administration (EIA)
The site, which is zoned for industrial use, is surrounded by low-income housing and is located a little over a mile away from Whittier Elementary.
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A hyperscale data center is a massive facility built to handle large-scale cloud computing, AI workloads and data storage. These campuses typically require enormous amounts of electricity, water and cooling infrastructure to support high-powered servers operating around the clock.
The site, which is zoned for industrial use, is surrounded by low-income housing and is located a little over a mile away from Whittier Elementary. While smaller than some of the massive AI-focused campuses planned in rural Texas, the proposed facility could still raise environmental concerns commonly associated with data centers.
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Housing on nearby Flaxman St. shows close proximity of surrounding neighborhoods.
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Noise, water and power concerns grow
“If you ask state and local leaders across the country for their take on the AI and data center boom, they’ll likely talk about the jobs and revenue this new industry could bring to their community. Ask them about the boom’s impact on electricity and water use, and their excitement will fade quickly,” writes Margaret Cook, Vice President of the Houston Advanced Research Center.
In addition to electricity and water strain, noise concerns have also been a growing complaint from residents who live near data centers, describing the sensation as a low vibrational “hum” that can be heard 24/7. In some reported instances, this can be heard at data centers that only emit 30 megawatts.
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As noise pollution becomes one of the latest concerns tied to large data center developments, companies face increasing pressure over where and how they invest in the facilities.
Associate Professor Tommy Pan Fang at Rice University, along with Shane Greenstein, recently conducted a study into the factors that drive data center location decisions across the country.
GARLAND, TEXAS – MARCH 4: Construction workers build out the rooftop chillers and water lines feeding them atop Dallas TX4, which is under construction at the NTT Data center campus in Garland, Texas, March 4, 2026. It will take 40 of those water-filled chillers to cool the fourth data center built on the property. (Tom Fox/The Dallas Morning News via Getty Images)
The Dallas Morning News/Hearst N/The Dallas Morning News via Gett
“Recent power outages and the surge in AI-driven computing have made data center siting decisions more consequential than ever, especially as energy and water constraints tighten,” according to Fangs and Shane Greenstein’s report.
Why Houston is still attractive to AI developers
At first glance, Houston’s dense population, hurricane risks and unpredictable weather might seem like drawbacks for hyperscale investment.
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However, “we ended up finding that wasn’t necessarily the case,” said Fang, noting that demand is growing for data centers to be closer to labor pools and internet infrastructure that is more readily available in metro areas compared to rural areas.
“I think that trend might continue with these hyperscale data centers,” said Fang.
The investment brochure for the Jacinto City site also lists several tax incentives for prospective buyers that make the deal more attractive. Some of these include state tax breaks, like the Texas Data Center Tax Exemption, as well as federal incentives empowered by President Trump’s One Big Beautiful Bill for AI infrastructure.
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Local governments are also playing a role in attracting investors, including the Freeport Tax Exemption available in Jacinto City and Harris County that allows companies to temporarily store equipment or inventory without paying certain local property taxes on it, as long as the items are moved out, sold, or installed within 175 days.
But as more hyperscale projects move into urban and industrial neighborhoods, Houston may increasingly face a difficult balancing act between attracting AI infrastructure investment and addressing the environmental concerns that often accompany it.
“I think that is the billion, trillion dollar question, right? Is it right for local governments to try to bring in these data centers with the promises that these data centers have in mind, or are there going to be these negative externalities once a data center is built that is hard to reverse?” said Fang.
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