Zoning & Land Use

A key vehicle to limit or restrict data center development is to update the municipal code, often including zoning requirements, usage requirements, and other siting decisions. Through these mechanisms, local governments can dictate where and how data centers can be constructed. Local governments can take one or multiple approaches, including the following:

Site Data Centers in Industrial Zones Only

Prohibit Variances and Special Use Permits

Variances allow zoning boards to approve use cases that are prohibited under existing zoning law, such as building height or minimum setback requirements. To receive a variance, the applicant must prove that they will suffer “hardship” without variance approval.¹ Data center developers have petitioned² zoning boards for variances from existing zoning regulations, such as restrictions on building heights, arguing that failure to provide a variance will lead to financial hardship. Consider prohibiting all applications for special use permits and variances for data center siting. If not prohibited, the threshold for data centers to apply for use variances to sidestep zoning applications should be exceedingly high.

Prohibit Data Centers in Commercial and Mixed-Use Zoning

This prohibition should be framed as a community health measure to ensure that communities are investing first and foremost in development that will sustain and nourish the community, including housing, grocery stores, and businesses that can bring long-term jobs into the community.

1. Ryan Coffey, “Difference Between Special Use Permits and Variances,” Michigan State University Extension, March 22, 2013, https://www.canr.msu.edu/news/difference_between_special_use_permits_and_variances. ↩︎
2. James Engel, “Springdale Zoning Hearing Board Considers Data Center Developer’s Requests,” TribLIVE, October 23, 2025, https://triblive.com/local/valley-news-dispatch/springdale-zoning-board-considers-data-center-developers-requests. ↩︎

Cities should specify the minimum distances that data centers must be from property lines, streets, or specific types of areas (e.g., transit hubs).

Landscape Setbacks

Set minimum setback requirements for data centers.

Sidewalks

Require data centers to build sidewalks over a minimum size and landscape strips with large canopy shade trees.

Distance from Residential Zones

If a city must permit data centers in a zoning district that abuts a residential zone, the city should require at the bare minimum 2,640 feet (one-half mile) between the data center and residential property line to minimize noise and air pollution.

Distance from Transit Hubs

Restrict data centers near transit hubs in order to prioritize mixed-use development such as employment centers, healthcare facilities, grocery stores, and meaningful community services. At least 2,640 feet (one-half mile) should be the floor.

Localities eager to bring economic development to their communities, including data centers, often have endangered historic sites. Localities must prohibit the rezoning of land near historically significant sites for the purposes of building data centers.

Data center developers are purchasing large swaths of land with the intention of rezoning agricultural districts into industrial zones. Communities must protect against this by prohibiting rezoning that transforms farmland into data center developments. To counter pressure to sell, communities can invest in farmland preservation funds.

A necessary precursor to the strategy of rejecting data center applications that fail to comply with local government goals is to have strong city or county goals. These goals must be developed in consultation with community members, and should center disadvantaged communities.

Ensure that each major stage of the approval process is reviewed independently.

The burden should be on the data center developer to prove how the project will fit within city goals and limits, with clear and transparent timelines, plans, and accountability measures. Failure to effectively demonstrate this should result in a rejection.

Ensure that a city has the ability to enforce the agreements made throughout the approval process. Enforcement must occur after the data center is approved, at any point during development or implementation of the data center, and once the data center is in operation on a consistent basis. The local government must also create the ability to institute penalties that go beyond nominal fines, including revoking a data center’s permit or certificate of occupancy.

Note: The specific mechanisms for continued monitoring, enforcement, and penalties will depend on each component of the application and are outlined in each corresponding section below.

Local governments must use the application process to demand as much transparency as possible.

Specify Minimum Transparency Requirements as Part of the Application Process

The minimum transparency requirements as part of the application process include, but are not limited to:

• water usage and mitigation;
• noise study and mitigation;
• energy usage and mitigation;
• on-site emissions;
• value of tax abatements developer is receiving for the project;
• name of all companies involved in data center project, including developer, shell companies, data center operators, and financers;
• jobs (short-term and permanent, hiring efforts, permanent employee wages); and
• 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.

Note: In some cases, data center developers are applying for permits without having tenants or end users in place. This can impede a city’s ability to demand transparency measures. Cities should reject any application that cannot account for the data center’s projected resource use or does not offer transparency into economic development terms.

Mandate Public Notice and Community Hearings

Require a minimum number of public community hearings as a central part of the approval process. Upon receipt of a data center application, the appropriate public administrator must add discussion of the data center application to the agenda of an upcoming regular meeting. 

Ensure there is adequate advertisement for the hearing, including but not limited to publication in officially designated newspapers, social media, and certified mailings to all households within the approving government’s jurisdiction. Jurisdictions that depend on key resources (e.g., watershed and energy infrastructure) planning to be used by the data center should also be notified. Clearly display the time and place of the hearing in all communications. 

Ensure that educational information is provided to residents well in advance of any hearing, with materials from independent assessments rather than developers. Engage in proactive outreach to community leaders, community groups, and residents of areas both next to the proposed site and that would be impacted more broadly by rate increases, pollution, or resource use.

Reject Proposals Without Adequate Transparency Measures

Reject data center development or expansion proposals that do not have adequate transparency measures. Establish a waiting period before the rejected proposals can be submitted for reconsideration.

1. “Palantir and AWS,” Palantir, https://www.palantir.com/partnerships/aws. ↩︎
2. Caroline Haskins, “ICE Is Paying Palantir $30 Million to Build ‘ImmigrationOS’ Surveillance Platform,” Wired, April 18, 2025, https://www.wired.com/story/ice-palantir-immigrationos. ↩︎

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.”
  

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).

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)

It is equally important to ensure there are continued transparency mechanisms in place after the approval process. Without these, effective enforcement of conditions in data center approvals and addressing harms from construction and operation will be more difficult.

Require Monthly Public Disclosure

Require data centers to give monthly reports on data centers’ water and electricity usage.

Additionally, data centers must report the results of noise studies; the amount of tax incentives received from local and state governments; the number of jobs created, including the wages and benefits offered to both construction and permanent employees; and the total amount of dollars invested into the community at minimum every year.

This information must be submitted to the local agency overseeing the permitting process to ensure compliance with the terms of the conditional permit. Information should also be reported to a state agency that gathers and discloses this information online. For more information about how states can track and publish these metrics online, see Establish a Statewide Clearinghouse. A state clearinghouse might not be politically feasible in all states.

Ensure Continued Community Involvement

The local government must establish mechanisms for continued community involvement, including a system of public reporting and a city response system to address community concerns. This should also include a post-approval hearing for additional transparency.

Establish Enforcement Mechanisms

Local governments must build out an enforcement mechanism to ensure that data centers abide by transparency requirements contingent upon approval. Jurisdictions must reserve the right to revoke the conditional use permit or remove the certificate of occupancy if conditions are not met. Additional penalties for violation of application terms can include non-nominal fines and civil penalties.

Note: Cities may have to amend their zoning code to increase the acceptable fines, and that cities may need to consult the legality of occupancy removal.

Without aesthetic specifications, data centers tend to default to large and unwelcoming concrete buildings. The following requirements can help mitigate this default design.

Facade and Principal Building Requirements

Cities can specify requirements for aesthetic elements of data centers and require data centers to incorporate specific design principles, such as changes in building height, building step-backs or recesses, windows, and use of accent materials.

Shielding Mechanical Equipment from View

Data centers should screen and shield mechanical equipment so it is not visible.

Establish Landscape Requirements

Local governments can require pathways, open green space on property lines, vegetation, and specific types of fencing. (Chain-link and barbed-wire fencing may be prohibited, for instance.)

Limit Building Conversion

Limit buildings that can be converted into data centers to prioritize other building use cases, such as housing.

Require Green Building Standards

Localities should mandate that data centers be built utilizing green building standards such as LEED,¹ ISO 14001,² or ISO 50001.³

1. USGBC, “LEED Rating System,” USGBC, accessed December 2, 2025, https://www.usgbc.org/leed. ↩︎
2. ISO, ISO 14001:2015 – Environmental Management Systems — Requirements with Guidance for Use, 2015, https://www.iso.org/standard/60857.html. ↩︎
3. ISO, “ISO 50001– Energy Management,” ISO, accessed December 2, 2025, https://www.iso.org/iso-50001-energy-management.html. ↩︎

Prohibit the Department of Energy or any other federal agency from leasing land or providing easements to private developers to build AI infrastructure on public land. This includes actual data centers and the infrastructure to support them, like on-site electricity generation and backup electricity facilities, natural gas and carbon capture and storage pipelines, and off-site energy projects.

If prohibition of data centers on public lands and waters is not possible, Congress can attach strong, enforceable conditions onto all data center development (including the infrastructure to support data centers) on federal lands to ensure data centers are publicly owned and are accountable to the public. This strategy opens up space to consider how technological development—including data centers—might unfold if it were guided by public interest objectives rather than private control over the AI stack. Beyond the limits of this administration’s infrastructure approach, there remains significant opportunity to reimagine AI infrastructure development to support public objectives and fund best-in-class research trajectories sidelined by profit-driven incentives. The conditions that bring us closer to this technological future include the following:

Data Centers Tapping into Local and State Resources Are Presumed Rejected Unless They Meet Local and State Approval Processes

While public infrastructure on federal land is generally exempt from local zoning laws, Congress can act to ensure that where data center development taps into local or state public resources—such as public aquifers or regional transmission lines—all development must abide by state and local approval processes, including the ability for communities to reject incoming development where it does not abide by locally set standards.¹ 

All Data Centers on Federal Land Must Be Publicly Owned and Used for the Benefit of Public Research

All agencies (including land and water management agencies) must restrict data center development on federal lands and waters to advance work that supports, democratizes, or advances public R & D technology mandates. These facilities should be owned and operated by public research institutions and should provide computing and data initiatives to support alternative AI research trajectories outside the “bigger is better” scaling paradigm, alongside non-AI research that still requires access to large scale computing. Research housed in federal data centers cannot be used to support the defense industry, weapons research, military expansion, fossil-fuel extraction and combustion, nuclear permitting, predictive policing systems, immigration enforcement, and other harms to be specified in the development process.

Specify That Federal Data Centers Are Not Exempt from State Utility Processes

Federal and regional energy regulators, including the Federal Energy Regulatory Commission (FERC), can formalize clear rules for colocation of large loads from data centers and power generation. Colocation policies must not risk creating de facto pathways for AI data centers that preference their development over renewable-energy generation projects.² In other words, polluting power plants must not power AI data centers both behind and in front of the meter while the grid around it feels associated price fluctuations, reliability issues, and ambient regional system stress.³

Such policies must require full participation in state utility processes and include equity and sustainability guarantees. Federal data centers must participate in holistic transmission planning and cost burden analyses on local ratepayers, and must meet renewable energy mandates. Such state utility processes ensure both industry accountability to the public and grid accessibility, and safeguard progress toward state-level renewable-energy goals.

Institute Binding Renewable Energy Requirements

Data centers serviced on federal land cannot be served by oil, gas, or nuclear energy. Require that data centers procure or subscribe to locally deliverable, additional, and zero-emissions renewable energy at all hours of the day, every day of the year, as a condition for receiving federal approval. All energy generation colocated on federal land must be renewable energy. Diesel backup generators are prohibited.

Data Centers Must Offset Tax Exemptions

Because public land is not subject to local and state taxes, Congress can require a payment in lieu of taxes (also known as a PILOT agreement) equivalent to the full tax value of all property taxes and taxable assets (such as computer peripherals and electricity sales tax).

Require Comprehensive Transparency Mechanisms and Monthly Reporting

Require all projects on federal land to abide by strict transparency requirements, reported monthly to a federal agency charged with monitoring, tracking, and enforcing transparency requirements. For a breakout of these recommendations, see “Establish Federal Oversight and Transparency Mechanisms.”

1. Under the Property Clause in Art. IV, § 3, cl. 2, Congress has plenary authority over federal lands and may, through legislation, condition federal land use in compliance with state and local regulatory regimes. What’s more, federal facilities are generally immune from state permitting requirements under the Supremacy Clause in Art. VI, cl. 2. But Congress can waive that immunity with a clear directive. For example, Congress has expressly subjected federal development to state and local approval processes, as it has done under the Clean Air Act in 42 U.S.C. § 7418 and other cooperative federalism statutes. As such, Congress may require that data center development on public lands accessing aquifers or transmission infrastructure comply with state and local permitting requirements, including denial where locally adopted standards are not satisfied. ↩︎
2. Federal Energy Regulatory Commissions, “FERC Orders Action on Co-Location Issues Related to Data Centers Running AI,” February 20, 2025, https://www.ferc.gov/news-events/news/ferc-orders-action-co-location-issues-related-data-centers-running-ai; Federal Energy Regulatory Commission, “Fact Sheet: FERC Directs Nation’s Largest Grid Operator to Create New Rules to Embrace Innovation and Protect Consumers,” December 18, 2025, https://www.ferc.gov/news-events/news/fact-sheet-ferc-directs-nations-largest-grid-operator-create-new-rules-embrace. ↩︎
3. Justin Kollar, “Planning Under Preemption: State Power and Local Authority in the AI Data Center Era,” Journal of the American Planning Association, February 18, 2026, https://doi.org/10.1080/01944363.2026.2618221. ↩︎