Siting

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. ↩︎

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.

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. ↩︎