Cities Across the U.S. Halt Data Center Construction Amid Electricity and Zoning Concerns
Why It Matters
A growing wave of local governments is blocking new data center development, citing pressure on electricity grids, rising energy costs for residents, and concerns about environmental impact. The trend spans multiple states and reflects mounting tension between communities and an industry that handles the digital infrastructure behind apps, websites, and artificial intelligence services.
What Happened
In recent weeks, cities and counties from Colorado to Georgia have enacted moratoriums on data center construction, pausing new permits while local governments work to establish zoning rules and other regulations for the facilities. State-level lawmakers are also scrutinizing the generous tax incentives that many jurisdictions have offered to attract the industry.
The Denver City Council voted unanimously this month to impose a one-year halt on new data center zoning permits and site development plans, giving the city time to draft a regulatory framework before additional projects move forward. Oklahoma City approved a comparable pause in April, set to remain in place through the end of this year or until the city revises its zoning code. Tulsa also enacted a temporary construction stop, though projects already in progress are permitted to continue.
The actions are not limited to large cities. In Illinois, both Bloomington and Normal adopted six-month moratoriums this month, while Morgan County took the same step in April. In Michigan, Huron County this week approved a three-year moratorium, adding to roughly 20 other communities in the state that have already paused data center construction.
In Georgia, Camden County became the first coastal community in the state to enact a moratorium, putting a six-month hold on new projects earlier this month. Several North Carolina counties have followed a similar path, including Chatham County in February and Orange County — which encompasses Chapel Hill — in April.
Not every jurisdiction is moving toward restriction. Cheyenne, Wyoming, held a lengthy public hearing on a proposed one-year moratorium but ultimately decided not to proceed with the measure.
By the Numbers
- 4.4% — Share of total U.S. electricity consumed by data centers in 2023, according to researchers at the Lawrence Berkeley National Laboratory in a study released at the end of 2024.
- 6.7%–12% — Projected range of U.S. electricity consumption attributable to data centers by 2028, per the same study.
- 70% — Share of Americans who told Gallup in a March poll they would oppose construction of an AI-focused data center near their homes.
- 53% — Share of respondents in the same poll who said they would oppose living near a nuclear power plant, a lower figure than opposition to data centers.
- ~20 — Number of Michigan communities that have already paused data center development before Huron County’s three-year moratorium this week.
Zoom Out
The local backlash reflects a broader national reckoning over the physical footprint of digital infrastructure. Data centers have expanded rapidly in recent years, fueled by growth in cloud computing, streaming services, and AI applications. That expansion has drawn increasing scrutiny as communities weigh tax revenue and jobs against electricity demand and land use.
Industry advocates argue that data centers are essential to modern commerce and national competitiveness, and that communities imposing moratoriums risk forfeiting economic benefits. Supporters of the pauses counter that local governments need baseline rules in place before major facilities arrive, particularly given the scale of power consumption involved. The debate mirrors wider conversations happening in state capitals, where lawmakers are beginning to revisit incentive packages that have helped attract data center investment over the past decade.
As Washington continues to debate the nation’s energy and infrastructure priorities, local decisions like these may increasingly shape where digital infrastructure gets built — and at what cost to surrounding communities. For more on how federal agencies are navigating related infrastructure challenges, see a recent review of FEMA’s role in state-level disaster and infrastructure recovery planning.
What’s Next
Cities and counties with active moratoriums are expected to use the pause periods to draft zoning ordinances, establish setback requirements, and set energy-use standards for data center applicants. Denver’s one-year window and Oklahoma City’s timeline through the end of 2026 will serve as early tests of whether local regulations can satisfy both residential concerns and industry demands. Similar deliberations are expected to spread to additional communities as electricity cost pressures mount.