Wave of data center moratoriums spreads across US as governors and cities pause new applications

A wave of data center moratoriums is spreading across the United States as local and state officials react to mounting public anxiety over resource consumption. Maryland Governor Wes Moore expressed willingness to sign a statewide freeze, while jurisdictions in Virginia, North Carolina, and California advance pauses and stricter regulations. The rapid expansion of AI infrastructure triggers intense debates over grid strain, water usage, and tax loopholes, prompting federal and state lawmakers to propose guardrails.

Data center moratorium wave

• ▪Thirteen of Maryland's 24 jurisdictions, including Baltimore, Montgomery, and Prince George's counties, have implemented temporary bans on data center development.
• ▪The Raleigh City Council scheduled an October 6, 2026, vote on a proposed six-month moratorium on new data center applications.
• ▪Maryland Governor Wes Moore stated on September 17, 2026, that he would sign a statewide data center moratorium bill if passed by the legislature.
• ▪Loudoun County, Virginia, advanced a measure on September 16, 2026, to pause reviews of new data centers and substations for up to 12 months.

Opportunity Zone tax loophole controversy

• ▪The Department of Housing and Urban Development maps show 8,746 Opportunity Zones in the U.S., with just under half located in rural areas.
• ▪A National Community Reinvestment Coalition report found that 14% of all operational U.S. data centers are located within Opportunity Zones.
• ▪Senator Josh Hawley announced plans to introduce federal legislation to exclude data centers from accessing Opportunity Zone tax breaks established in 2017.

Power resource demands

• ▪San Jose officials partnered with utility PG&E to accelerate power delivery to large energy users, estimating each facility generates $3 million to $6 million annually.
• ▪Senator Martin Heinrich blocked a Republican-led bill on September 17, 2026, that would have states consider requiring tech companies to cover increased electricity costs.

Water usage concerns

• ▪Texas Governor Greg Abbott directed the Texas Water Development Board to penalize data centers that fail to enforce state water usage requirements.
• ▪Raleigh's proposed unified development ordinance rewrite plans to focus on updating rules regarding noise, vibration limits, and data center water consumption.

Local community opposition

• ▪The grassroots I Love San Jose coalition is organizing residents to demand stricter public reviews and transparency regarding data center energy and water use.
• ▪In April 2026, a coalition led by the Center for Biological Diversity petitioned the Bay Area Air Quality Management District to strengthen oversight of diesel backup generators.

State policy responses

• ▪New Mexico gubernatorial candidate Deb Haaland announced her support for a data center moratorium, calling for facilities to build their own renewable energy infrastructure.
• ▪California Governor Gavin Newsom is reviewing a package of approved state bills designed to protect residents from data center energy costs and increase utility transparency.