Establish Conditional Use Permits

Revise the jurisdiction’s zoning code to establish conditional use permits as the mechanism to receive approval.

Set Distinct Class for Data Centers

By defining data centers as their own use class within zoning code, local governments can pass ordinances based on the unique characteristics of data centers. Without this step, data centers may fit within existing zoning laws that do not require special permits or applications (“by-right zoning”).

Define Data Centers

Define data centers in the most expansive possible way to avoid loopholes, currently and for future technological developments. Consider something like this:

“A facility, or portion of a facility, used or planned for use for the housing, operation, and/or co-location of computer and communication equipment and/or other associated components related to digital data operations for the purpose of storage, management, processing, and/or transmission of digital information.”

Note: This definition was written in reference to existing data center definitions.

  • Reference from Atlanta, GA: “A facility engaged in the storage, management, processing, or transmission of digital data, which houses computer or network equipment, systems, servers, or appliances, and other associated components related to digital data operations.”
  • Reference from Chandler, AZ: “A facility or portion of a facility housing networked computer systems and telecommunications equipment used for remote storage, processing, and distribution of data.”
  • Reference from Londonderry, PA: “A facility used for the housing, operation, and/or co-location of computer and communication equipment for the purpose of storage, management, processing and/or transmission of digital information necessary for the operation of one of more business, commercial, or governmental entities.”

Should you define data centers as their own use class or within a broader industrial category?

Choosing how to define data centers in your permitting process matters. Some localities choose to decenter data center language by passing ordinances that capture data centers within a broader industrial category, such as “large-load customer” or “high-impact facility.”

Benefits of Defining Data Centers Within a Broader Category:
  • For states facing preemption concerns or unable to pass data center-specific location, defining facilities by their resource use might be critical.
  • Some tech companies and data center developers have argued that regulations targeting data centers specifically are discriminatory. If the regulation includes but is not specific to data centers, developers cannot argue that they are being singled out and discriminated against. 
  • “Large-load customers” is the term used at the federal level, so using this term provides consistency with federal regulations.
Drawbacks of Defining Data Centers Within a Broader Category:
  • Defining data centers within a broader class such as “large-load customers” or “high-impact facility” will include other manufacturers and industrial customers; they may join forces to fight the regulation. 
  • A broader definition creates the possibility that data centers may find loopholes.
  • Defining data centers by their resource use could create a loophole if data centers find efficiencies or creative ways to offload their resource use. 

This will be a decision best made by those with specific knowledge of your jurisdiction.

No Permit Unless Approved

Currently in many jurisdictions, data center approvals are “by-right,” meaning that projects that meet zoning criteria are automatically approved without requiring special permits or additional review. This prevents local governments from attaching conditions to the permitting process. To mitigate this, local governments must stipulate that data center development and expansion are not permitted unless approved through the conditional use permitting process. This allows local governments to articulate the necessary requirements in order for data centers to receive approval, and to reject applications that don’t meet those requirements. This should include applications for existing data centers to expand (i.e., turning existing sites into hyperscalers).

Strong example

The city of Chandler, Arizona, stipulates that “data centers are not permitted to operate unless explicitly approved.”

Attach Binding Conditions on the Approval Process

The core mechanism of a conditional use permit is to condition the permit on the basis of clearly specified guidelines and requirements. These include:

  • An approved water usage plan (for details on how to structure the strongest possible local water regulations, see Protect Water Resources)
  • An approved energy-usage plan (for details on how to structure the strongest possible local energy regulations, see Regulate and Limit Energy Use)
  • An approved noise-mitigation plan (for details on how to structure the strongest possible noise-mitigation measures, see Institute Strong Noise Mitigation Measures)
  • Commitment to abide by zoning regulations (for details on how to structure the strongest possible zoning regulations, see Pass Zoning Ordinances and Municipal Code Amendments)
  • A binding commitment to continued post-approval transparency requirements (for details, see the next point on Post-Approval Transparency Measures)
  • A binding commitment to abide by job-quality standards and local, targeted hiring for construction and data center jobs (for details on the strongest labor conditions, see Establish Local Fair Labor Requirements)
  • A displacement and holistic environmental impact report, centering environmental justice considerations (such as those emerging from redlined/fenceline communities) that establishes the data center will not exacerbate the displacement of residents and local businesses
  • If called for by frontline communities, a binding commitment to enforce Community Benefits Agreements (for our perspective and cautions on this process, see Considerations for Community Benefits Agreements)