Massachusetts Data Centers: The Risk Is Your Electric Bill

The largest data center in Massachusetts is the Markley Group building in Lowell. It runs about 352,000 square feet. Right now there are roughly 6.19 million square feet of available office space in the Route 128 West submarket alone, the stretch that runs through Waltham, Newton and Needham. You could drop seventeen copies of the biggest data center in the state into the empty space in one suburban office market and still have room left over.

I keep that arithmetic handy because of a question I have been getting since last winter, usually from owners in Waltham, Burlington and Marlborough, and usually some version of the same worry. Data centers are eating housing land in Virginia. Are they coming for ours?

The short answer is no, and the longer answer is more useful than the short one. The fear arrived here measured in the wrong unit. What data centers actually compete for is megawatts and raw acreage with power already at the fence line. What housing conversions compete for is square footage and a zoning vote. Those are two different auctions, and in Greater Boston the bidders almost never meet. Where they do meet is on one line, and it is the line at the bottom of your utility bill.

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Governor Healey’s Executive Order 658, signed on September 8, mostly settles the land question. It does not settle the bill.

What Executive Order 658 actually does

The order is narrower than the headlines suggested, and the narrowness is the point. It bars state agencies from permitting a data center with peak electricity demand above 25 megawatts unless the developer has first signed a community benefits agreement with the host city or town. Healey put it about as plainly as a governor can: unless a community says yes to a data center, the state is saying no.

Three other pieces matter. Any project over that threshold has to procure enough new clean electricity to match what it consumes. If it cannot, it pays into a newly created Ratepayer Protection Fund, and MassDEP has until December 31 to stand up the alternative compliance payment mechanism that collects it. And non-disclosure agreements between state agencies and data center developers are now prohibited, which is the provision I would have bet against and am glad to have lost.

This did not come out of nowhere. In late June the administration halted new applications for the qualified data center sales tax exemption that Massachusetts created in 2024, the one that offered a 20 year break to projects meeting a 100 job threshold. So inside of ten weeks the state took away the tax incentive and added a local veto. A separate ballot initiative filed for November 2028 would go further and require two thirds approval from local voters, plus a utility cost shielding contract and a water supply certification.

One number tells you how selective that 25 megawatt line is. Massachusetts today has about 168 megawatts of data center capacity spread across 58 facilities, which works out to an average facility of roughly 2.9 megawatts. The permit gate sits nearly nine times above the size of the typical data center that already exists here. Everything Massachusetts has built to date would pass under the bar untouched. EO 658 is not a data center ban. It is a hyperscale filter.

Massachusetts is not Loudoun County, and the map proves it

The imported version of this story comes from Northern Virginia, and the details there are genuinely alarming. Land that can take a data center trades at multiples of what a homebuilder can pay, and the National Association of Home Builders has documented builders losing sites outright. Loudoun County’s own board chair has described affordable housing developers getting outbid, and roughly 700 residential lots there left the pipeline when a seller chose data center rezoning over finishing a deal with a builder.

That is a real problem. It is also a land market problem, and it requires cheap land, available power and permissive zoning in the same place at the same time. Massachusetts has none of those three in the inner suburbs.

Look at where the fights are actually happening here. Holyoke banned new data centers outright in June. Westfield passed a 365 day moratorium on July 6 after residents looked at a proposal that would draw 274 megawatts, more than one and a half times the entire existing capacity of the state, and concluded they were being asked to host a city sized power plant. Lowell, which already hosts the largest facility in Massachusetts, adopted a moratorium of its own. Shutesbury, Mansfield and Everett have moved too, and Plymouth’s Select Board has recommended a one year zoning moratorium to Fall Town Meeting that would run from October 17. Hunneman counts at least 16 Massachusetts communities with a proposed or approved moratorium or ban.

Read that list again. Western Massachusetts and gateway cities. Not one town on the Route 128 belt. The pressure is landing where land is cheap and transmission capacity exists, which is exactly not Waltham.

The empty space on 128 is square feet, not acres

Here is the part most of the national coverage misses. Greater Boston’s commercial distress is not vacant land. It is vacant buildings, and specifically 1980s and 1990s office and lab buildings sitting on parking lots inside built out suburbs.

Route 128 West posted the highest availability rate of any Route 128 submarket at 26.6 percent, with sublease space at 5.5 percent. Route 128 North gave back 424,907 square feet of net absorption in a single quarter. Route 495 West has shed 297,363 square feet over twelve months and is asking $25.89 a foot, which is under half of what Back Bay commands.

Add the three belts together and you get roughly 16.7 million square feet of available space across Waltham, Burlington, Marlborough and their neighbors. That is about 47 times the footprint of the largest data center in Massachusetts. Square footage was never the scarce input in this market. Nobody is going to outbid a housing developer for an empty Winter Street office building by promising to fill it with servers, because filling it with servers is not the constraint. Getting 25 megawatts to the property line is.

The buildings landlords were pitching both ways

For about two years, the owners of this inventory have been running a dual track pitch. Every half empty suburban office park was simultaneously a candidate for an apartment conversion and a candidate for some form of digital infrastructure tenancy. I sat in on enough of those conversations to know the data center leg was always the thinner one, and EO 658 just cut it thinner.

Stack up what a hyperscale developer weighs when siting in Massachusetts. Commercial electricity here runs 24.79 cents per kilowatt hour year to date through June, third highest in the country behind Hawaii and California and 1.79 times the national average of 13.86 cents, according to EIA Electric Power Monthly Table 5.6.B. The 2024 sales tax exemption is paused. Any project over 25 megawatts now needs a signed community benefits agreement in a state where 16 communities have already moved to block them. And it has to bring its own clean power or pay a fee.

Against that, the conversion path got easier. On July 8 the House passed H.5562, the economic development bill that extends Boston’s office to residential conversion playbook to all 351 cities and towns and puts $50 million behind adoption. Watertown showed what it looks like in practice when a vacant office became 285 apartments. And in Waltham the City Council overrode Mayor McCarthy’s veto by a 12 to 1 vote on August 3, clearing BXP to pursue up to 1,200 homes at Bay Colony off Winter Street. Add the 300 to 400 units proposed off Jones Road and 600 more at the former Polaroid campus and Waltham has roughly 2,100 units of housing entitled or in motion on land that was office park a decade ago.

I want to be careful about the causal claim here, because I think a lot of coverage will overstate it. EO 658 did not convert a single building. What it did was remove the alternative bid that landlords could point to in a negotiation. That matters more than it sounds like it should.

What 2,100 units means against what actually trades

This is where I can go somewhere the national write ups cannot. We pull closed sale data straight from MLS PIN, so instead of guessing what the conversion pipeline means for the inner suburbs, I ran the actual condo closings in five Route 128 and Mass Pike towns for the first eight months of 2026.

Source: MLS PIN closed sales, condominium property types, January 1 through August 31, 2026. BMN Boston analysis.

Two things jump out. The first is Marlborough. Seventy condos closed there in eight months and exactly one of them was built in 2015 or later. Across all five towns, only 71 of 434 condo sales, about 16 percent, involved anything built in the last decade. These are not markets with a new construction problem. They are markets with a new construction absence.

The second is scale. Waltham closed 145 condos in eight months, an annual run rate near 218. The 2,100 units now in motion there equal roughly nine and a half years of the town’s entire condo transaction volume. Bay Colony alone is about five and a half years of it. Even accounting for the fact that much of this will deliver as rental rather than for sale, and that these projects take years, that is a genuine supply event for a town that has been starved of new product.

If you are buying a 1985 vintage two bedroom in Waltham today with the intention of selling in 2032, this is the number I would want you looking at. Not data centers.

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The real new line item is your electric bill

Now the part I actually want owners worrying about, because it is the one thing in this story that can reach your monthly budget.

Massachusetts utilities have fielded interconnection requests from proposed data centers totaling roughly 2 gigawatts. That is about 2,000 megawatts against an existing statewide fleet of 168 megawatts, so the queue is nearly twelve times everything built here to date. The Boston Globe reported that serving it would require on the order of $1 billion in grid upgrades, and that at full draw it would equal the annual consumption of about 2.4 million Massachusetts households.

Grid upgrades get recovered through rates. Who pays which share is decided by cost allocation rules, and Massachusetts has not finished writing its own. Twenty three states have approved at least one large load tariff. Massachusetts is not yet among them. The House version of the energy affordability bill would direct the DPU to create a data center specific tariff, and the two chambers are in conference. EO 658’s Ratepayer Protection Fund is a real mechanism, but MassDEP still has to build it by December 31.

Meanwhile, look at what rates are already doing here, because the pattern is not what most people assume.

Massachusetts is the odd one out. Nationally, residential power got 7.4 percent more expensive over the last year and commercial got 6.1 percent more expensive. Here, commercial jumped 7.7 percent while residential actually came down slightly. Massachusetts holds the third highest price in the country in both categories, behind Hawaii and California, but right now the increase is landing on the business side of the meter.

That divergence cuts two ways, and both are worth understanding. It is a large part of why hyperscale developers were never going to love Massachusetts. It is also the leading edge of exactly the pressure homeowners should watch, because a residential rate that is merely flat at 30.06 cents while the commercial rate climbs is not a durable condition. If 2 gigawatts of new load arrives before the cost allocation rules are finished, the question of who pays for those wires gets answered by default rather than by design.

So put it in the budget conversation. When I sit with a buyer and we walk through carrying costs, electricity has historically been the line nobody models. Given where Massachusetts sits nationally, I now treat it the way we treat property taxes and insurance. It is a real, variable, policy sensitive number, not a rounding error.

Waltham already showed you the second bill

There is a companion cost here that gets less attention, and Waltham is the cleanest example of it in Greater Boston.

Close to half of Waltham’s property tax base comes from commercial real estate, a share exceeded only by Boston and Cambridge. When Route 128 West office values fall, and they have fallen hard, that burden shifts. Waltham raised its residential tax rate 5 percent this year to cover lost commercial revenue. Two nearby trades show how far values have moved. Stony Brook Office Park in Waltham sold in June at $94 per square foot, about 68 percent below its prior sale. Northeastern bought the Burlington BioCenter at $301 per square foot, also down roughly 68 percent from 2022.

This is the honest argument for conversions that does not get made enough. Residential redevelopment does not replace the commercial tax revenue a full office park generated. But a vacant building generates less than either, and it keeps declining. Mayor McCarthy’s objections to Bay Colony about traffic, setbacks and parking precedent were not unreasonable on the merits. The Council still had to weigh them against a tax base that is actively eroding, and voted 12 to 1.

For an owner in Waltham, Burlington or Marlborough, the practical read is that your assessment and your rate are both in motion, in opposite directions, for reasons that have nothing to do with your house.

What I tell buyers and investors right now

Five things, in the order I would act on them.

1. Stop pricing data center land risk into inner suburb decisions. There is no active hyperscale proposal on the 128 belt, the economics point away from Massachusetts, and EO 658 added a local veto on top. If you have been hesitating on a Waltham or Burlington purchase over this, it is not the reason to hesitate.

2. Treat the conversion pipeline as real supply, with a long fuse. Waltham’s 2,100 units are entitled or moving, not built. Rezoning to occupancy on a project like Bay Colony realistically runs five to eight years. If your hold period ends inside that window you will feel the construction and not the competition. If it ends after, plan for both.

3. Underwrite electricity like a real line item. At 30.06 cents residential, Massachusetts is 66 percent above the national average. For a small multifamily owner with common area load, that is not trivial, and the cost allocation fight over data center interconnection is unresolved. Ask for twelve months of actual bills, not an estimate.

4. In Marlborough and Framingham, understand what you are buying. One post 2015 condo sale in Marlborough in eight months means you are almost certainly buying older product at $261 per square foot. That can be a good trade. It is a different trade than buying new.

5. Watch three dates. MassDEP’s December 31 deadline for the alternative compliance payment mechanism. The energy affordability bill coming out of conference before year end. And whether the 2028 ballot initiative clears signatures. Those decide whether the ratepayer protections in EO 658 have teeth.

The bottom line

The land grab story is real, it is just somebody else’s. Massachusetts responded to the data center boom by making the biggest projects harder to build and by taking away the tax break, and the towns most exposed had already moved on their own. The result is that the vacant office and lab inventory along Route 128 and the Mass Pike has one fewer competing use than it did in June, at exactly the moment the state handed all 351 cities and towns a conversion tool.

That is good news if you are counting on that pipeline to add homes in the inner suburbs. It just shows up slowly, in units delivered in the 2030s.

The fast moving number is the one on your utility bill, and it is moving for reasons that are still being decided at the DPU and on Beacon Hill rather than in any zoning hearing. I would rather you track that than a data center that is not coming.

If you own along the 128 belt and want to know what the conversion pipeline does to your specific block, or you are weighing a purchase in Waltham, Burlington or Marlborough and want the closed sale data rather than the headline, reach out. You can also check what your home is worth today as a starting point.

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