Data Centers on Pause: The Rules Must Catch Up

This month, Prince George’s County imposed a two-year moratorium on new data center development. This week, New York Gov. Kathy Hochul announced a one-year statewide pause on environmental permits for new hyperscale data centers requiring at least 50 megawatts of power.

Different jurisdictions. Different measures. The same underlying conclusion: governments should not keep approving increasingly large and resource-intensive data centers before they have enforceable rules governing where those facilities belong, how they must operate, and what they must deliver to the communities that host them.

That is also the central premise of GCHIC’s Smart Digital Growth framework.

Why Governments Are Hitting Pause

The rapid growth of artificial intelligence and cloud computing has greatly increased demand for hyperscale data centers. These facilities can consume extraordinary amounts of electricity and water, require major infrastructure investments, occupy large tracts of land, and create persistent concerns about noise, emissions, environmental impacts, and higher costs for utility customers.

At the same time, data centers are part of the infrastructure of modern life. They support communications, commerce, education, government, health care, and countless services people use every day. Properly planned facilities can also generate substantial tax revenue and contribute to local economic activity.

But those potential benefits are not automatic. Nor do they mean that every data center proposal—or every proposed location—is a good deal for the public.

A project should move forward only when it represents a true win-win: sustainable, equitable, and built for the community that will host it.

The growing use of moratoria reflects a recognition that many governments do not yet have rules capable of ensuring that result.

Prince George’s County Has Reached the Same Crossroads

On July 7, the Prince George’s County Council adopted a two-year moratorium affecting new land-use applications involving qualified data centers. The pause may end sooner if the County adopts comprehensive legislation governing data center placement, construction, and operation.

That proviso is important. The moratorium is not intended to substitute for policy. It creates time to develop it.

Prince George’s County has already spent considerable time studying the issue. Its Qualified Data Center Task Force examined siting, energy and water demands, environmental effects, community engagement, economic benefits, and other concerns. The Task Force largely succeeded in identifying the questions the County must confront.

But recommendations, studies, and voluntary commitments are not enforceable standards.

In January, after reviewing the Task Force report through a five-part series, GCHIC described the choice facing the County: it could establish clear zoning, objective siting criteria, measurable performance requirements, and predictable outcomes—or continue relying on exceptions, negotiated conditions, and case-by-case discretion.

In the final installment, From Recommendations to Rules, we also warned that weak rules may accelerate development temporarily but ultimately invite “backlash, moratoria, and policy reversals.”

Six months later, the County has extended its pause precisely because the necessary legislative work remains unfinished.

Smart Digital Growth Provides a Roadmap

GCHIC has never argued that data centers should simply be blocked. Our position has remained consistent: data centers should be permitted only through a framework that protects public resources and affirmatively advances community interests.

Our Smart Digital Growth policy framework calls for:

• A clear hierarchy that directs data centers toward appropriate sites while protecting environmentally sensitive land and locations better suited for housing, mixed-use development, or other community priorities;

• Binding standards for energy, water, noise, emissions, design, and infrastructure impacts;

• Renewable-energy and sustainability requirements that are measurable rather than aspirational;

• Protection against shifting infrastructure costs to residents and ordinary utility customers;

• Transparent decision-making and meaningful public participation;

• Community benefits that are required as conditions of approval, not offered later as voluntary concessions; and

• Clear monitoring, enforcement, and consequences for noncompliance.

These rules should be established before individual projects enter the approval pipeline. Communities should not have to renegotiate the County’s fundamental expectations every time a developer identifies a new site.

This is especially important for hyperscale facilities. Their power requirements, infrastructure demands, and potential impacts are different in magnitude from smaller data centers serving institutions or regional needs. Scale matters—but so do location, design, resource consumption, economic value, and compatibility with surrounding communities.

A Pause Must Lead to Durable Rules

New York and Prince George’s County are responding to a policy gap that can no longer be ignored. Existing development processes were not designed for facilities that may consume as much electricity as a small city or require enormous investments in supporting infrastructure.

Hitting pause while stronger standards are developed is not anti-technology or anti-growth. It is responsible governance.

But the success of a moratorium cannot be measured only by the projects delayed during the pause. Its real value will depend on the rules that emerge from it.

Prince George’s County should use the next two years to adopt enforceable standards capable of rejecting unsuitable projects, preventing cost shifting, protecting valuable land and natural resources, and ensuring that any facility ultimately approved delivers genuine and lasting public benefit.

The County does not need to begin that work from scratch. GCHIC’s Smart Digital Growth framework and our analysis of the Qualified Data Center Task Force report offer a community-centered roadmap for moving from study and recommendations to rules that last.

The moratorium is an appropriate pause. Smart Digital Growth is what must come next.

Explore GCHIC's Data Center Resources