By OBBM Network Editorial Staff

Derived from an episode of Home in Dallas Texas.

Imagine a city that simultaneously owns the land, the power lines, and the tax rolls for a single, massive AI data center. That’s the reality in Denton, Texas, and it’s changing the calculus for homebuyers.

The Power‑Choice Quirk That Makes Denton Unique

Most of the Dallas‑Fort Worth metro area lets residents pick their electric provider, much like choosing a cell‑phone plan. Denton, however, runs its own utility. When electricity prices surge, the city—not a private company—absorbs the cost. This structure became starkly evident during the February 2021 ice storm, when frozen pipes and empty grocery shelves coincided with a spike that left Denton $140 million in debt.

Because the city owns the utility, any financial strain on the power company directly hits the municipal budget, and ultimately, the taxpayers.

Core Scientific’s Double‑Dip Deal

In early 2022, Core Scientific, a cryptocurrency mining firm, launched a massive operation on city‑owned land. The arrangement meant the city collected rent, electricity payments, and property taxes from the same tenant. Initially, the flow of revenue looked promising, but Core’s bankruptcy filing in December 2022 threatened that stability. The city’s utility manager warned that a collapse could push residential electric rates up by about 3.5 %.

Core re‑emerged in 2024, pivoting from Bitcoin mining to AI workloads. Unlike cryptocurrency rigs that can be shut down when power is scarce, AI servers run continuously, likened by Pannell to “a teenager who never turns off the lights.” The new agreement gives Denton no mechanism to throttle the data center’s power draw, even during statewide shortages.

Tax Benefits Amid the Controversy

Despite the financial risks, the data center boom has boosted Denton’s assessed property values by roughly $3 billion, according to the city’s latest appraisal. That surge enabled the council to lower the property‑tax rate to its lowest level since 2004, translating to about $203 per household each year.

When residents voiced opposition at a recent city‑hall hearing, none mentioned the tax cut, suggesting many are unaware of the direct link between the data center revenue and their lower bills.

Balancing Growth and Community Concerns

More than half of Texas voters oppose new data centers in their neighborhoods, reflecting fears over water use, electricity strain, and environmental impact. In Denton, the city’s financial reliance on the facility makes it harder to heed those concerns. The situation mirrors other North‑Dallas suburbs, such as Celina, where municipal revenue from builder fees conflicts with residents’ desire for slower growth.

City officials have acknowledged that only about a third of their income is guaranteed; the rest fluctuates with electricity sales and commercial activity. A shortfall of $200 million in projected electric‑company revenue this year underscores how volatile the model can be.

What It Means for Prospective Homebuyers

For buyers, Denton offers a rare combination: lower property taxes and a relatively affordable market—13 homes are currently listed under $200 000. However, the city’s lack of choice in electricity providers means residents are indirectly tied to the fortunes of AI data centers. If the utility’s revenue dips, rate hikes could follow, affecting both power bills and municipal services.

Wendy Pannell emphasizes the importance of looking beyond a home’s square footage or kitchen upgrades. Understanding the underlying economic forces—like Denton’s intertwined utility and tax structure—helps buyers make informed decisions about long‑term affordability.

In a landscape where technology and local governance intersect, Denton’s experience serves as a case study in how municipal partnerships with high‑tech industries can both bolster and jeopardize community stability.

The full episode of Home in Dallas Texas is available on OBBM Network TV.