Residents in Australian suburbs are increasingly resisting local infrastructure projects, including grid upgrades tied to data center expansions.

When Sean Brown moved to West Footscray two years ago, days after his son was born, he thought he had found an ideal place to raise a family—green space, a nearby train station, and a community with room to grow. Instead, his home sits just 300 metres from one of the country’s largest data centres. “It’s a massive black box in the middle of a residential area. There’s this visual heaviness to it that you can’t really escape,” Brown told SBS News. NextDC’s M3 facility in the Melbourne suburb emits a constant humming noise audible even 100 metres away, while ongoing construction has brought near-constant light, noise, and disruption. Parking is scarce as facility workers compete for street spots, and Brown reported that entire streets have lost power for full days during infrastructure works, often with little warning and no compensation. He also expressed concerns over potential health risks and the long-term future of his suburb.

Branded by NextDC chief executive Craig Scroggie as “Australia’s largest hyperscale AI factory,” the M3 site is set to double in size by 2027. The expanded facility will cover 10 hectares and draw 225 megawatts of power around the clock. Just a few blocks away, a separate facility, the Perri Melbourne Data Centre (PMDC), has already been approved and planned. According to the Climate Council, there are currently 162 operational data centres across Australia, with a further 90 proposed. It remains unclear whether newly announced regulations targeting residential zones will apply to any of these existing or planned sites.

Prime Minister Anthony Albanese used a speech to the Business Council of Australia’s annual dinner on Tuesday night to announce new national rules that would block future data centres from being built near homes, schools, or prime agricultural land. Under the proposed framework, developers would be required to add more renewable energy to the grid than their data centres consume, minimise water use, and ensure new sites are appropriately scaled—avoiding land suitable for housing. “Australia is in a strong position to attract investment in data centres, but maintaining social licence will be essential,” Albanese said. “That means ensuring energy bills do not rise, water security is maintained and locations are appropriate.” When pressed on ABC Perth regarding communities already living alongside data centres, the prime minister did not directly answer, instead reiterating the social licence framework. The prime minister’s office declined to comment when asked by SBS News whether any measures would target existing sites or address concerns that the new rules exclude already-affected residents.

While Brown welcomes the changes in principle, he argues they fail to assist those already bearing the consequences. “If it doesn’t fix the problems that have been caused in West Footscray, what’s the point of it?” Brown said. “This community’s just been completely sold down the river if we’re not looked after. Why do our children continue to bear this risk?” He is sceptical that the sites would have received approval under the new government frameworks and insists the rules must extend to existing data centres. “If areas where they’ve already been inappropriately built are just left to fend for themselves, how is that fair at all?”

Associate Professor Dr Ehsan Noroozinejad, a researcher at the Urban Transformations Research Centre at Western Sydney University, welcomed the government’s changes but highlighted a critical gap. “The proposed rules mainly shape future development, so they do not automatically resolve concerns around existing facilities,” he told SBS News. “Communities already living near data centres need clear standards for noise, water use, backup generators, traffic and energy impacts, backed by transparent monitoring.” Noroozinejad noted that while Australia still requires data centres, problems arise when they are sited incorrectly or lack adequate infrastructure. “It’s important not to assume every data centre creates the same problems,” he said. “The real issue is performance, location, and whether costs are shifted onto the surrounding community.”

Dr Michael Vardon, from the Fenner School of Environment and Society at the Australian National University, identified a deeper procedural flaw: communities have virtually no input before a facility is approved. “This is about where new facilities go, and setback rules do not apply retrospectively,” Vardon told SBS News. “The approval comes first, the community finds out afterwards, and by then the only remaining policy lever is the operating conditions.” Olivia Shen, director of the strategic technologies program with the United States Studies Centre at the University of Sydney, warned that a key factor will be whether the new provisions apply to expansions of existing data centres as well as new projects. “Many data centres have operated in Australia for decades, often without the surrounding community even realising they are there,” Shen told SBS News. “However, if existing data centres are allowed to expand to a point where they encroach on homes, schools and agricultural land, then this becomes a bit of a policy loophole.”

Another West Footscray resident, Kendal Coombs, purchased a house four years ago approximately 200 metres from the M3 site, when the land was still vacant. She said council initially informed her the site would become a “business park,” but she realised months after moving in that it was a data centre—a fact that initially raised no concerns until its rapid expansion began. “We’re all angry and concerned but it’s hard to know what to do, we feel really powerless,” she said. “These projects destroy communities. If they’re making these determinations [that future data centres can’t be built near homes or schools] because it is too unsafe or too much of a risk to our health to live near them, then they need to pay reparations to the residents affected.”

Brown added that the presence of the data centres has made it increasingly difficult for residents to sell their properties and relocate. “There’s a lot of people here who are really angry about what impact this is going to have on their house prices — because I sure as hell wouldn’t live near a data centre,” he said. “I wouldn’t buy this house.” He is advocating for compensation measures, including voluntary housing buybacks at competitive market rates for those wishing to leave, relocation cost coverage for both owners and renters, and payments for past disruptions. NextDC has not responded to these proposals, prompting Brown to call for direct government intervention.

Both Noroozinejad and Vardon emphasised that greater transparency and reporting are urgently needed for existing data centres in residential neighbourhoods. This should include detailed information on water and energy consumption, noise levels, independent monitoring, and a public complaints register. Practical mitigation measures, such as acoustic upgrades, landscaping, traffic management, and limits on backup-generator testing, could also help alleviate local impacts, Noroozinejad said. Reflecting the frustration felt across the suburb, he concluded: “They’ve just killed this area now. We’re witnessing the death of a suburb.”