This week’s Zoning In highlights just how rapidly the data center landscape is shifting—both in policy and public perception.
From Virginia to California, state and local governments are tightening oversight, adding new zoning restrictions, and questioning whether data centers deliver enough community benefit to justify their scale and resource demands. In Virginia, multiple counties are now requiring special use permits, economic impact studies, and infrastructure assessments before approving new facilities. Meanwhile, states like New Jersey and Minnesota are exploring new tariffs and repealing key incentives in response to the growing strain on power and water systems.
At the same time, a national survey suggests that many Americans are open to data centers in their communities—so long as operators emphasize sustainability, transparency, and meaningful local investment. With over a dozen updates from across the country, this edition tracks the growing tension between infrastructure demand and local control.
Data Center Developments and Community Responses
Charles City County defers vote on controversial data center amid pushback
Charles City County, VA delayed a decision on Diode Ventures’ proposed 515-acre data center after widespread community opposition. Concerns included noise, light pollution, and a lack of transparency. Despite Diode’s efforts to increase setbacks and offer economic benefits, residents voiced frustration over outdated zoning plans and limited board engagement.
South Fulton residents raise questions about data center surge
A town hall in South Fulton, Georgia, hosted by Councilwoman Helen Z. Willis, addressed public concerns about energy use and water demands from five data center projects. Georgia Power and local officials attempted to ease fears, while emphasizing revenue and business growth. More than 20 new proposals are under review.
Data center gets zoning OK for $1 billion project in Taylor, Texas
Blueprint Data Centers received rezoning approval for a three-phase, $1B project in Taylor, Texas. The development includes energy-efficient closed-loop cooling and a 10-year tax rebate. Availability of Oncor Electric service was critical to moving the project forward.
La Porte County, Indiana forms data center oversight committee
To avoid residential conflicts, La Porte County formed a 12-member panel to guide future data center projects to industrial areas and maximize financial return without over-generous incentives. The committee includes local officials, planners, IT experts, and union and agricultural reps.
James City County proposes major zoning changes for data centers
A proposed ordinance in James City County, VA would require special use permits for data centers and mandate economic impact analyses compared to alternative land uses. The changes follow growing concerns over energy use, noise, and aesthetic impacts. The Planning Commission will vote on July 2.
🏛️ Policy, Regulation, and Incentives
As of January 10, 2025, all new data center construction—regardless of location—must obtain a Provisional Use Permit (PUP). This includes projects within the previously development-friendly White Oak Technology Park, where facilities once advanced without board-level approval. The new rules aim to slow expansion outside designated industrial zones due to rising concerns over energy use, noise, aesthetics, and public pushback.
The PUP process introduces mandatory public hearings and imposes several new site requirements: a 500-foot buffer from residential areas, limits on generator testing, enclosed cooling systems, and assurances of utility readiness. Notably, these rules apply retroactively to projects that have been rezoned but haven’t started construction or secured final site plan approval. County officials, including Supervisor Tyrone Nelson, admitted prior underestimations of the broader impact of data centers and cited resident concerns as a key driver for change.
Henrico’s move follows a growing statewide trend, with other Virginia counties like Prince William, Fairfax, and Loudoun also requiring special approvals for data centers. While the state has yet to adopt unified legislation on siting, energy, or environmental impacts, local governments are increasingly stepping in. The Henrico ordinance signals a maturing industry now faced with the need to balance rapid growth with transparency, sustainability, and community trust.
New Jersey lawmakers introduce data center energy tariff bill
NJ Assemblyman Dave Bailey proposed a bill to create a specific electricity rate structure for new data centers, citing AI-driven energy use as a threat to ratepayers. Critics argue the bill could scare off investment, while supporters say it’s needed for transparency and cost control.
California weighs new data center regulations
California lawmakers are considering legislation to impose special electricity rates and reporting requirements for data centers. While utilities see them as a boon, environmentalists warn about stranded costs and grid strain. The state risks losing AI leadership without clear rules.
Minnesota repeals electricity tax exemption for data centers
Minnesota’s omnibus tax bill repeals a key electricity sales tax exemption for data centers starting July 1, 2025. A companion bill creates a new “large-scale data center” fee and adds requirements for labor standards, green building certification, and water-use permitting.
Indiana approves incentives for four new data centers
The Indiana Economic Development Corporation approved incentive packages for four new data center projects, emphasizing their long-term capital investment potential. Details on exact locations and operators were not disclosed.
📊 Trends, Polling, and Public Sentiment
Survey: 70% of Americans are comfortable living near a data center
According to Airedale’s national poll, most Americans are open to nearby data centers if they’re responsibly built. 55% support tax incentives, and over 60% say their perception would improve if companies invest in education or infrastructure. Noise, energy use, and water are top concerns—but not dealbreakers.
