US Cities and Counties Impose Bans and Moratoriums on Data Centers

Local governments across the United States are increasingly restricting data center development through bans, moratoriums, and tighter zoning laws. In Texas, the San Marcos City Council voted 4-3 to prohibit data centers in all zoning districts, citing community disapproval and the potential impact on the Edwards Aquifer. This follows a February decision to deny a service agreement for a facility projected to use 70,000 gallons of water daily. Meanwhile, rural North Texas counties are struggling with industry pushback; Hill County rescinded a moratorium after a $100 million lawsuit, and Hood County approved the Comanche Circle project without conditions following legal threats.

In response to these trends, Governor Greg Abbott directed public utilities to ensure data center energy costs are not passed to residents, while the Republican Party of Texas prioritized large-scale data center regulation for the next legislative session. Other jurisdictions have opted for temporary pauses to study environmental impacts. The Desert Hot Springs City Council in California approved a 45-day moratorium, echoing similar moves in Coachella, Indio, and Imperial County. In Kentucky, the Versailles City Council enacted a moratorium through December 31, 2026, to proactively assess power and noise risks.

Alternative regulatory approaches are also emerging. The Fayetteville City Council in Arkansas unanimously passed an ordinance requiring conditional use reviews and a 1,000-foot buffer from residential areas. While industry groups like the Data Center Coalition warn that such unpredictability hinders billion-dollar investments, many local leaders argue that current infrastructure cannot support the resource demands of these facilities.