Congressman pushes for military housing in San Diego amid Navy data center backlash

A California Congressman is pushing for the Navy to include military housing in its massive redevelopment project in San Diego that has drawn public backlash over plans for a potential data center.

“When you talk to active duty folks, they talk about how tough it is to make it and to pay for housing even with their housing allowances,” Rep. Scott Peters, a Democrat who represents California’s 50th Congressional District, which includes parts of San Diego, told Task & Purpose. “It seems to me that that’s something that would be helpful. Particularly if you’re building housing as part of a military revitalization, why not include some dedicated military housing as part of the housing stock.”

Since 2021, the Navy has sought to revamp facilities at its 70-plus-acre campus owned by Naval Information Warfare Systems Command in San Diego. The plan includes replacing outdated Navy office, laboratory, and warehouse spaces, while leasing other parts of the campus to a private partner as a way to fund the construction of military-specific facilities.

Recently, news broke that private sector developers are considering a data center, which sparked public outcry. Navy officials and developers urged that no final decisions have been made on the project.

The original Navy proposals included housing for San Diego, but they did not include units for the military. Peters said he’s advocated for the project to include housing for service members assigned to bases in San Diego — where the cost of living is almost 50% higher than the national average and current military housing providers already have long waiting lists.

“Dedicated military housing would be a reasonable ask from the Navy on this project,” Peters said.

Service members living off base receive a stipend in the form of basic housing allowance, or BAH, that’s based on several factors, but the biggest are rank, location, and number of dependents. San Diego County’s housing is among the least affordable in the state and has a deficit of affordable homes.

The Navy’s project manager gives a project overview and tour to San Diego officials in January 2024. Navy photo by Ramon Go.

The Voice of San Diego broke the news of the potential data center and community pushback swiftly ensued. Resistance also came from local lawmakers, including a San Diego City councilmember who suggested that the land could be used “to make sure there isn’t a veteran sleeping on the streets.” On Tuesday, that council approved a moratorium on data centers in response to concerns over the project. It was a drop in the bucket of a larger movement of opponents halting more than $64 billion worth of data center projects across the U.S.

“We’d always assumed that that would be housing, which is a really good use because we need a lot of housing in San Diego,” said Peters. “[It] wasn’t until last week that we heard, well, that part of the project might actually be a data center.”

In 2023, Peters and other members of Congress had pushed the Navy to take the “once-in-a-generation chance” to build affordable housing on the land. The Navy’s initial market analysis looked at projects offering between 4,400 and 10,000 residential units.

Plans to revitalize the campus had been in the works since 2021. The proposals were either that the Navy foot the entire bill to replace its own facilities, or the service enter into a lease agreement with a partner to develop the land, including for civilian use by the surrounding community. 

In 2024, the service signed an agreement with the Manchester Financial Group which included “mission-capable facilities” and other private uses.

Ted Eldredge, president & CEO of Manchester Financial Group, confirmed to Task & Purpose in an email that their proposal includes a data center. He said the project “contemplates thousands of multi-family homes” as well as retail, commercial, industrial, and hospitality uses.

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“Our development team had early, informational conversations with energy providers to understand what might be feasible, but there are no negotiations underway and no agreements in place,” Eldredge said.

However, Peters said “there’s a lot of questions about data centers,” like impacts on local water use, noise pollution, and the cost of electricity for nearby residents.

Peters has advocated for consumer protections included in the Bipartisan American Affordability and Jobs Act, a 417-page legislative package focused on federal environmental and energy policy and permit reforms. One of the provisions would mandate that data centers pay the cost of connecting to and using local energy grids to prevent costs from being passed onto consumers in the form of higher electricity bills. 

Peters said those consumer protections would extend to military families living on bases hosting data centers. 

“Our bill, if we passed it, would cover this because it covers federal lands, as most of these bases are,” he said.

The Navy project is the latest in a series of proposals across the military services. The Army has an agreement with two global investment firms to build and manage commercial data centers at two bases, with contracting documents signaling plans at two more. The Air Force has also pitched a private land use agreement for AI data centers on five bases.

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