Chad West says it’s a “free-for-all” and Dallas needs to catch up to other cities in regulating data centers

DALLAS — It seems like everywhere you turn these days, a Texas city is considering a data center moratorium.

District 1 Council Member Chad West recently organized a public hearing to begin reviewing data centers in the city of Dallas. The way West sees it, residents should have a say in where the buildings will be located.

“This whole industry has blown up so quickly that the zoning and the planning for this type of use has not been able to keep up with it,” West told us on Inside Texas Politics. “So, the request was for the plan commission to take up a review of appropriate zoning where the data centers should be located, where they should not be located, and what kinds of standards should be in place to make sure they’re regulated properly.”

In certain zoning categories, West tells us data centers are allowed by right in Dallas. That includes a significant portion of the commercial areas in the city.

West also says there are already several data centers located within city limits that he wasn’t even aware of.

“I had asked, well, is this one location a data center? And staff said yes, and there’s also like 15 more,” he explained.

Critics say data centers use too much power and water, in addition to complaints about noise and just how they fit when situated next to neighborhoods.

Supporters argue the facilities help power the digital economy and that they’re essential for AI.

McKinsey & Company, one of the world’s most influential consulting firms, estimates that global spending on data centers could reach $7 trillion by 2030.

So, we asked West if there was a way for the city of Dallas to tap into those dollars by taxing data centers in some way.

“It’s quite possible. And that is another thing we need to analyze with the city council. We are in, as I know we’re going to talk about, a budget shortfall in the city. And where we can make that up with an industry that’s making a ton of money, why would we not try to do that,” West answered.

We also discussed the bond package council approved for the ballot in November.

Dallas voters will decide the fate of a $443 million bond proposal to fund a new police academy and other public safety facilities. It would be added to the $50 million bond voters approved in 2024.

“So, this is the second tranche of money to support completion of the police academy and then the training facility, the gun range and all that stuff that they need for us to compete nationally to get the best officers in Dallas,” explained the council member.

McKinsey & Company $7 trillion estimate: The $7 trillion race for AI data center infrastructure | McKinsey