AUSTIN, Texas — Austin City Council unanimously approved a resolution Thursday directing city staff to develop new regulations for data centers, including the possibility of banning larger facilities within city limits.

Council approved Item 61 as amended during its Aug. 27 meeting. The measure begins the process of amending Austin’s Land Development Code and other city regulations to establish where data centers can operate, development standards and permitting requirements.

“Without objection, Item Number 61 as amended is adopted unanimously,” Mayor Kirk Watson said before applause broke out in the council chamber.

The move comes amid growing concerns over the amount of water and electricity consumed by large-scale data centers as demand for artificial intelligence and cloud computing fuels development across Central Texas.

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Under amendments approved Thursday, city staff must bring back binding regulations by the end of 2026 that would allow the council to determine which types and sizes of data centers can operate in Austin.

Council members also expressed support for prohibiting larger data centers and directed staff to develop the most restrictive definition legally and practically possible, according to a release from council members. City staff also committed to monitoring permit and land-use applications while the regulations are being developed.

“While data centers pop up across our state and country at breakneck speed, Austin shouldn’t have to choose between Big Tech’s bottom line and our right to clean water, breathable air, and reliable power,” Council Member Vanessa Fuentes said. “Today, I’m proud we took a promising first step toward regulating that growth.”

Council Member Zohaib “Zo” Qadri said the growth of hyperscale data centers could pose challenges for Austin’s water and energy resources.

“With the passage of Item 61, we are taking an important step toward protecting our resources, advancing our climate and equity goals, and ensuring Austin remains a sustainable and livable city for generations to come,” Qadri said.

The resolution itself does not immediately ban data centers. Instead, it directs city management to develop the code changes and regulations that would govern the facilities, with the council expected to consider those binding rules later this year.