I don't get shocked by a whole lot while I'm catching up on the news, but I did get pretty caught off guard by this proposal: one real estate developer and former HOA president of a neighborhood in Loudoun County, Mital Gandhi, has proposed that himself and his 142 other neighbors should sell their entire neighborhood for data center development. He was a staunch opponent of data center development in Ashburn that has since decided that since data centers have already surrounded their neighborhood and disturb the quietude, residents might as well find a way to benefit. In the proposal, each resident would receive roughly $4.4 million for selling their home to data center developers, which is about double the value of their home. The catch is that this must be a unanimous decision. Getting 143 families to agree to selling their homes, as it turns out, is a tough ask.
This deal has not gone through yet because of how many holdouts there are. Some families have children that are in school and want to delay the project, and others are emotionally attached to Ashburn, VA. Regardless, because of their emotional attachment to their home, the external cost curve is high. However, the larger problem has been the costs of consensus. Coordination to secure agreement between all 143 families is high. Many holdouts are trying to negotiate a higher piece of the cut for themselves, which adds to the collective cost curve. I would argue that n* in this scenario despite all of the debates is right where it should be for a decision of this magnitude. This has the potential to uproot families at inopportune times and impose very costly externalities on some should it go through without consensus. Unanimity in cases like this ensures Pareto optimality. In the meantime, all residents will continue to hear the pervasive hum of the data centers that currently surround their community.
