Austin City Council advances plan to regulate data centers, potential ban on larger facilities

Proposed data center rules could create new zoning districts, site development standards and business permitting requirements in Austin.

AUSTIN, Texas — The Austin City Council is moving forward with plans to create new zoning and development rules for data centers as the industry continues to grow across Central Texas.

Council members unanimously approved a measure Thursday directing city staff to develop recommendations for updating Austin’s city codes to regulate data centers. The recommendations could include a ban on larger facilities within city limits.

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Austin’s current zoning code does not have a specific land-use category for data centers.

There are currently no large-scale data centers within Austin city limits, but city leaders said they want to establish regulations before future projects are proposed.

Potential recommendations could include creating new data center land uses and zoning districts, establishing site development standards and adding business permitting requirements.

Some residents told the council that they are concerned about the significant water and energy demands associated with data centers.

While some speakers said they were glad the city is taking steps to address the issue, others said the council needs to move faster. Some residents called for a moratorium on new data center development.

“I think a lot of this is downstream from people’s anger, their anger that we see our lands and our water being stripped away and our leaders are not listening to us,” Austin resident Philip Fitzgerald said. “People are really scared about this, and I really hope we move quicker than spring 2027.”

To address concerns about the timeline, the council approved an amendment from Council Member Mike Siegel aimed at speeding up the process.

The amendment calls for binding regulations to be in place by the end of 2026. That would allow the council to determine which types of data centers could operate within Austin, and which would be prohibited.

Council members also signaled their intent to take a strong approach to limiting larger data centers.

“Until we have strong, enforceable rules in place, there’s this chance that someone who owns property somewhere, with existing entitlements, could install a data center without city action required,” Siegel said. “So that’s why we need to move quickly. And that’s the focus of this motion.”

The council also directed city staff to monitor permit and land-use applications to ensure no large data centers are approved before the new regulations are in place.

City leaders expect additional recommendations to come back to the city council by spring 2027.