Data centers – the massive warehouses that power AI – have become a political flashpoint. A recent Gallup survey found that 71% of Americans oppose construction of a data center in their community, and the opposition is remarkably bipartisan: 75% of Democrats, 74% of independents and 63% of Republicans oppose them. In a country that can’t agree on much, that’s a downright consensus – Not in My Backyard (NIMBY)!

Residents worry about higher electricity bills, strained water supplies, round-the-clock noise and job promises that tend to evaporate once construction is completed.

Tip O’Neill’s maxim that “all politics is local” has rarely been truer. Texas, Gov. Greg Abbott – who recently proclaimed the state the “epicenter of AI development” – paused roughly 1,800 project approvals last month. In Ohio, an internal Republican memo reportedly identified data centers as the top issue hurting Sen. Jon Husted’s re-election bid against Sherrod Brown, prompting Husted to introduce legislation requiring tech companies to fund their own electricity infrastructure. In Michigan, the Senate candidates are debating the merits of a one-year data center moratorium as compared with strict new standards on them. Pennsylvania’s Democratic Gov. Josh Shapiro, who once touted a $20 billion Amazon investment, has imposed new statewide restrictions.

Before we crown data centers the defining issue of the 2026 elections, note that fewer than 1% of voters cite them as their top priority. Data centers are a hyper-local issue that can swing a close House race or a state utility commission seat – but it’s another cost-of-living issue in disguise. When the family electric bill jumps and a new data center goes up down the road, voters connect the dots.

Adding It Up

James Carville’s famous 1992 campaign slogan was, “It’s the economy, stupid.” While times have changed, the sign still works – just substitute “diesel,” “mortgages” and “electric bills.”

Don’t take our word for it – the polling backs us up. Emerson College’s September national survey shows Democrats leading the generic congressional ballot 53% to 42%, with President Trump’s approval sitting below 40% (at 39%). The economy is the top issue for 41% of voters; they favor Democratic candidates by 14 points (55% to 41%). Most striking: independents, who broke for Trump in 2024, now favor Democrats by 29 points (60% to 31%).

History shows Midterm elections tend to be an uphill climb for the incumbent party. The president’s party has lost House seats in all but two midterm elections since World War II. Add record diesel prices, 7% mortgages and a bipartisan revolt against data centers, and the headwinds look more like a hurricane.

As Yogi Berra reminded us, “It’s tough to make predictions, especially about the future.” Three weeks is an eternity in politics. A ceasefire or a drop in oil prices could change the conversation.

What It Means for Investors

Whatever happens on November 3, several things seem likely. Divided government, if it arrives, typically means gridlock – and markets have historically been quite comfortable with that. Fewer sweeping changes means less uncertainty and more predictability.

For multifamily investors, the implications are more constructive than the headlines suggest. As we’ve written extensively, high mortgage rates keep would-be buyers renting longer. And it’s harder to save for a down payment when fuel and utility costs crimp household budgets. Elevated diesel and construction costs make new development harder to pencil, constraining future supply. And the Federal Reserve rarely hikes just once – futures markets see another couple of rate hikes by year-end. And the political pushback on data centers may ultimately slow the growth of electricity demand – or at least shift more of the grid’s costs onto the tech companies rather than households and property owners. Whether consumers pay these costs directly or indirectly (through higher costs for AI tokens) won’t matter all that much to household budgets.

None of this really changes our playbook. We underwrite conservatively, stress-test for “higher-for-longer” interest rates and elevated operating expenses, take the long view and don’t bet the farm on any single regulatory or political outcome.

If election season has you stressed out, here’s more wisdom from writer/philosopher Will Rogers: “Be thankful we’re not getting all the government we pay for.” Whatever your politics, please vote. And if you’re driving to the polls in a diesel pickup, consider carpooling.

Mitch Siegler is Senior Managing Director and Co-Founder of Pathfinder Partners. Prior to co-founding Pathfinder in 2006, Mitch founded and served as CEO of several companies and was a partner with an investment banking and venture capital firm.