Data Center Moratoriums and Local Restrictions: How to Screen for Them

A moratorium is a temporary local ordinance or resolution that stops the jurisdiction from accepting, processing or approving certain applications. For data centers, it typically applies to rezonings, special use permits, site plans or building permits for that use. Its stated purpose is usually to give the jurisdiction time to study impacts and draft standards.

State law governs what a moratorium can do. Some states set maximum durations, require findings or limit how many times one can be extended. Others have little specific guidance, and courts review moratoriums under general land use principles. A moratorium may be countywide, limited to certain districts, or limited to sites within a distance of homes or other sensitive uses.

Many restrictions arrive without the word moratorium. They can be more lasting, because they are written as permanent code.

Noise and setback rules are among the most common permanent standards. Our guide to noise, setbacks and buffers for data centers covers how those are written and measured.

Moratoriums usually follow a pattern. A jurisdiction receives several large applications in a short time, or an operating facility draws complaints, and officials decide the existing code was not written for the use. Common concerns include:

• Noise from cooling equipment and generator testing near homes.
• Conversion of farmland or rural areas, and building scale out of character with surroundings.
• Effects on electric reliability or rates for existing customers.
• Water use for cooling, especially where supply is already tight.
• Transmission lines and substations that new campuses bring with them.
• Construction traffic and road wear.
• Concern that tax incentives give away more than the community gets back.

Most of these can be addressed through design, siting and commitments, which is why many moratoriums end in standards rather than bans. The approach in community engagement for data centers applies directly.

Whether a pending project is affected depends on state vesting law and how far it has gone. States differ on when a project gains the right to proceed under existing rules. In some, filing a complete application vests the rules in effect on that date. In others, rights vest only after a permit is issued or substantial construction begins. Some states apply a pending ordinance doctrine, under which a jurisdiction can deny applications that conflict with a rule it is actively considering.

• An approved development agreement can vest rules for its term, if state law allows.
• A complete, accepted application may or may not be protected, depending on the state.
• A rezoning approved before the moratorium usually stands, but later permits may still be paused.
• Projects in pre-application talks generally have no protection.

Restrictions are rarely a surprise to anyone watching local government closely. Signs that one may be coming include:

• Work sessions or study items about data centers on planning commission or board agendas.
• A comprehensive plan update or zoning code rewrite under way.
• Several recent large applications in the same jurisdiction or a neighboring one.
• Organized public comment, petitions or new residents’ groups focused on data centers.
• Statements by officials or candidates about pausing or limiting the use.
• Neighboring jurisdictions that recently adopted moratoriums or new standards.
• Utility or water provider statements about limits on new large commitments.

1. 01Read the current zoning code for any data center definitions, standards or recent amendments.
2. 02Review planning commission and governing body agendas and minutes for the past year or more.
3. 03Check whether a moratorium is in effect, its scope, expiration and any extension history.
4. 04Check the comprehensive plan for data center policy and any update in progress.
5. 05Look at neighboring jurisdictions, since restrictions often spread regionally.
6. 06Ask staff directly whether standards are being drafted, and note the answer in writing.
7. 07Confirm the state vesting rule and what stage would protect the project.
8. 08Ask the utility and water provider whether any limits on new large commitments apply.

Moratorium risk is one input to how a site is scored, alongside the zoning path covered in zoning for data centers.

A moratorium does not always end a project. Options include waiting it out if the land contract allows, taking part in drafting the new standards, adjusting the site plan to meet likely rules, or shifting to another site. Land contracts should anticipate this. Extension rights, tolling of deadlines during a moratorium and termination rights tied to land use changes all help, which is covered in buy, option or lease.