Have you ever wondered where the city of Chicago stores the data it collects digitally from interactions with the millions of residents and businesses it serves? The answer might surprise you — more often than not, it’s not stored in Chicago. In fact, the overwhelming majority of Chicago’s data is stored in data centers outside city limits, including the suburbs and even other states.
Why does this matter? It matters to Chicago for three important reasons — revenue, jobs and Chicago’s growth in the technology economy. Data centers generate new tax revenue, including new and additional property taxes, new real estate transfer taxes, and taxes on goods and services. Data centers also create short-term construction jobs and full-time jobs for data center employees once the centers are constructed.
New data centers can each generate up to $13 million a year for the city. And when our data is stored outside Chicago, those economic benefits are being enjoyed by other cities instead of our own. The city of Chicago pays hundreds of millions through contracts every year to data and information technology companies, some portion of which is for data storage, which means Chicago residents are left paying the price for data storage without seeing the returns. That’s revenue that should be flowing back into our own communities, creating jobs, funding city services and improving the quality of life right here in Chicago. It’s time to change this trend and bring our data back home where it belongs.
The Chicago Data Residency Ordinance is our chance to reverse this trend, and it is an economic imperative for our city. Since 2019, there have been 21 new data center developments in Illinois, and only four of those were in the city of Chicago. If every new data center in Chicago has the potential to generate millions for the city in property taxes alone, we cannot afford to forgo that economic opportunity.
The Chicago Data Residency Ordinance aims to capture the economic benefits of data storage by encouraging city of Chicago data to be stored within city limits. The ordinance does this by establishing the city’s authority to use the procurement tool of bid credits for contractors that store a certain percentage of city data in Chicago. By enacting this ordinance, we can drive the creation of additional data centers along with the revenue and well-paying jobs that come with them, particularly in communities of need. That’s because data storage centers require land that might not be available in more developed parts of Chicago, which opens up real economic development opportunities for the communities in our city that need it the most.
In my role leading the Chicago Urban League, I’ve seen the transformative power of strategic investment in local infrastructure. This ordinance is a crucial step in ensuring that Chicago’s future is strong, inclusive, prosperous and equitable.
Not only will the ordinance generate new revenue for the city, but it also will open doors for young people on the South and West sides of Chicago who often lack access to tech jobs. By fostering the growth of data centers in these areas, we can create new pathways to employment in one of the fastest-growing sectors.
Building data centers in Chicago isn’t just about generating revenue; it’s also a commitment to equity and opportunity. These centers create high-demand roles, such as technicians, that are accessible to people who might not traditionally have access to four-year tech education. With the growing need for skilled workers, individuals can enter these roles right out of high school, earning competitive salaries without the burden of costly tech degrees. These low-barrier jobs help level the playing field, offering a pathway to economic stability and career growth for those who need it most.
We are starting to hear more and more that data is the new gold. Cities and developers across the country are racing to establish data centers because they know that data storage is not just a necessity; it’s also a driver of economic growth. If Chicago is to remain competitive and strengthen its position as a technology hub and attract other tech businesses, we must grow our data center capacity. And we have the opportunity to do that now.
Chicago has the infrastructure, the workforce and the need for this kind of economic development. But unless we take action, we risk missing out on an incredible opportunity to drive growth in our city. The Chicago Data Residency Ordinance is a critical step toward reclaiming revenue, creating jobs and ensuring that the benefits of our digital economy are felt in every corner of our city.
The City Council must pass this ordinance and start our city on the path to generating revenue, creating jobs and ensuring Chicago is an economically vibrant city with opportunities for all of its residents.
Karen Freeman-Wilson is president and CEO of the Chicago Urban League.
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