A developer or data center company wants your Texas land

Why data centers are looking at Texas land

Data centers need land, but above all they need electricity, and a lot of it. Texas is seeing a wave of proposed projects, and the state has changed its rules to manage the demand they put on the grid run by ERCOT.

SB 6, signed in June 2025, added Section 37.0561 to the Utilities Code, which tells the Public Utility Commission to set interconnection standards for new loads of 75 megawatts or more at a single site in ERCOT. Among other things, those standards must include:

• a study fee of at least $100,000 for the first transmission screening study,
• financial commitments toward the transmission lines needed to serve the project, and
• a way for the company to show site control of the location, through ownership, a lease or another legal interest.

That last point explains a lot of the letters landowners are getting. A developer can't get far in the power queue without land under contract, so it tries to lock up sites early, usually with an option to buy, before it knows whether the power will come.

The queue is enormous. In August 2026, Governor Abbott said ERCOT was considering about 474 gigawatts of requests to connect, more than five times the grid's record peak demand, and that about 90% of the new requests were data centers. He directed the Public Utility Commission and ERCOT to audit every data center moving through the interconnection process before more can advance. Numbers like that suggest many proposed projects will never be built.

Is your land data-center grade?

Most land isn't, and that's worth knowing before you get attached to a big number. A serious data center site usually needs most of these:

• Power. High-voltage transmission lines or a substation nearby, with capacity to spare.
• Size. Large campuses can need hundreds of contiguous acres. The Hill County project described below covers more than 800.
• Water for cooling, or a clear plan for getting it.
• Fiber connections close by.
• Road access for heavy construction traffic.
• Buildable ground, reasonably flat and out of the floodplain.

If your land is missing most of these, be careful with an offer that sounds too good. Some approaches come from middlemen who want to tie up land cheaply and resell the option to a developer. Homebuilders, solar and battery companies and industrial users approach landowners too, and the same questions apply to them.

How much do data centers pay for land?

There's no standard price. One widely reported Texas example comes from Hill County. In a lawsuit against the county, developer RCM Hill said it had contracts with four landowners for more than 800 contiguous acres, for more than $80 million. KWTX reported in June 2026 that this works out to about $100,000 an acre, roughly 14 times the land's appraised value.

The lawsuit came after Hill County commissioners approved what appears to be the first county data center moratorium in Texas, in May 2026. After the developer sued for $100 million, the county rescinded the moratorium in June and adopted a checklist requiring developers to disclose water use, traffic, noise and economic effects, as The Texas Tribune reported. The developer later dismissed the case.

Treat those figures as news about one project. They're contract prices for one assembled site with the features a large project needs. For comparison, Texas A&M put the statewide price of rural land at $5,218 an acre in mid-2026. To see where your land sits, start with our guide to what your land is worth in Texas.

Can a developer force you to sell?

No. A private developer has no power to take your land, however large the project. Taking land against the owner's will requires eminent domain, which belongs only to government bodies and to private entities the law specifically authorizes, such as utilities and pipeline companies.

Texas also limits how eminent domain can be used. Government Code Section 2206.001 bars any taking that confers a private benefit on a particular private party, that serves economic development, or that isn't for a public use. The same section leaves in place the authority for things like roads, water projects, pipelines and utility service.

That last exception matters here. A utility building a transmission line to serve a new data center may have the power to condemn an easement across your land, even though the data center itself can't. If that happens, Property Code Chapter 21 gives you protections, including:

• a copy of the Landowner's Bill of Rights, which the Texas Attorney General publishes, at least 7 days before the final offer and no later than when the entity first says it has eminent domain power,
• a written initial offer, then a final offer at least 30 days later that's at least equal to a certified appraiser's valuation, and
• a hearing before three special commissioners if you don't agree on compensation.

You're entitled to hire your own appraiser and attorney in any condemnation. If someone approaching you hints that they could take the land anyway, ask them to name their eminent domain authority in writing.

How option agreements work

Most development deals start with an option. The company pays you an option fee for the exclusive right to buy your land at an agreed price within a set time. During that time you can't sell to anyone else. The company can walk away, and usually you keep the fee. These are the terms to negotiate:

Watch the calendar. An option with several extensions can keep your land off the market for years while the developer waits on power studies and approvals.

What happens to your ag valuation

If your land has an agricultural (1-d-1) valuation, a change to non-agricultural use triggers a rollback tax under Tax Code Section 23.55. It equals the difference between the taxes you paid on the ag value and the taxes on full market value for the 3 years before the change, and the current section adds no interest. A tax lien attaches to the land for the amount.

Selling alone doesn't trigger it. A change of use does. The standard TREC contract makes the buyer responsible if the sale or the buyer's later use causes the rollback, and the seller responsible if the seller changed the use before closing. A developer's own contract may say something different, so read that clause closely. If the company starts clearing or building before closing, the use could change while you still own the land. The rollback doesn't apply to land taken by condemnation or sold for right-of-way.

Our guide to the costs of selling land in Texas covers rollback alongside the other costs of a sale.

Getting land out of a city's ETJ

If your land sits in a city's extraterritorial jurisdiction (ETJ), the city can apply its subdivision rules there, although it generally can't zone the land (Local Government Code Section 212.003). For a developer, that decides whose rules it has to follow.

Since 2023, SB 2038 has let owners leave. Under Local Government Code Chapter 42:

• The owners of a majority in value of an area can petition the city for release, with a map and a legal description. The signatures must be gathered within 180 days.
• If the petition qualifies, the city must release the area immediately. If it fails to act by the later of 45 days or its next meeting after 30 days, the land is released automatically.
• Once released, the land can't be put back into the ETJ or the city limits unless the owner asks.
• Some areas can't use the process, including land near certain military bases, industrial districts and areas under a strategic partnership agreement.

County rules still apply after release. Our guide to selling land in North Texas covers the ETJ rules for fast-growing towns in more detail.

Build your own team before you sign

The company's lawyers work for the company. Before you sign an option or purchase contract with a developer, line up people who work for you:

• A Texas real estate attorney to review the option or contract, especially the extension, access and tax clauses.
• Your own appraiser, ideally one with development experience, to tell you what the land is worth for its best use.
• A land agent with development experience, who can test the offer by showing the land to other developers. You can check any agent's license on TREC's license search.
• A tax professional, since a large sale can mean a large capital gain and choices about how to receive the money.

Large sites are often assembled from several neighbors' tracts, as in Hill County. If a developer is talking to your neighbors too, comparing notes can help everyone negotiate.

If your land isn't what a developer needs and you'd still like to sell, a land company like ours is one more option alongside an agent or selling yourself. Tell us about your land and we'll get back to you within 24 hours.