Is Your City Ready for New Data Center Zoning?

A model ordinance. Two Pennsylvania state legislators. And a question that hundreds of municipalities across the country are about to face—whether they're ready or not.

When Representatives Mullins (D-112, Blakely) and Donahue (D-113, Scranton) co-sponsored a data center zoning ordinance designed to give municipalities a working template, they were responding to something real: local governments are getting caught flat-footed as hyperscalers, colocation providers, and AI infrastructure buildouts land in their backyards. The zoning frameworks that govern strip malls and subdivisions weren't built for 500,000-square-foot facilities drawing 100+ megawatts of power and running cooling systems around the clock.

That gap is now a policy problem. And it's one that cities and townships can either get ahead of—or clean up after.

What Data Center Zoning Actually Means (And Why It's Not Simple)

Zoning is about more than where a building goes. It determines what a facility can do, how large it can get, how much noise it can make, how much water it can consume, and what happens to the surrounding neighborhood when a 200 MW campus decides to expand.

Data centers sit awkwardly in most existing municipal zoning codes. They're not factories, not office buildings, not utilities—though they share characteristics with all three. Many jurisdictions have tried to shoehorn them into industrial or light-industrial designations, which creates a patchwork of unintended consequences: inadequate setback requirements, no provisions for diesel generator emissions during testing cycles, and silence on the question of fiber and power corridor access.

The core problem isn't that municipalities are hostile to data centers—it's that the rules weren't written with them in mind. A well-crafted data center zoning ordinance addresses that by creating a specific use category with its own standards for noise, power infrastructure, cooling systems, water use, and emergency operations.

The Mullins-Donahue model ordinance represents exactly this kind of purpose-built approach—giving Pennsylvania municipalities a starting point rather than requiring each township to reinvent the wheel from scratch when a developer shows up with a site plan.

What's Changing in the Regulatory Environment

The Pennsylvania legislative effort reflects a broader national pattern. States and localities are beginning to recognize that data center development is infrastructure development—not just real estate—and that it needs to be treated accordingly.

Historically, data center projects have navigated a maze of ad hoc approvals: special use permits, variance requests, conditional approvals with idiosyncratic requirements that varied county by county. That inconsistency created friction for developers and left municipalities exposed to deals they didn't fully understand. A municipality that doesn't specify noise standards upfront, for instance, may find itself unable to enforce complaints about generator testing that happens at 2 a.m.

Model ordinances shift the dynamic by establishing clear expectations before a developer ever files an application. They create a known playing field—which, counterintuitively, tends to attract more investment, not less. Developers price regulatory uncertainty into their site selection decisions. Clarity is valuable.

The co-sponsorship structure here is worth noting. Mullins representing Blakely and Donahue representing Scranton—both communities in northeastern Pennsylvania—signals that this isn't abstract policy. The Scranton/Wilkes-Barre corridor has seen genuine data center interest, partly driven by its proximity to major East Coast population centers, available land, and improving fiber infrastructure. These legislators are writing rules for projects their constituents will actually live next to.

The Economic Case — Grounded in Reality

The pitch for data center development is familiar: tax revenue, jobs, economic multipliers. The numbers are real, but they require context.

A utility-scale data center—say, 100 MW of critical IT load—represents a capital investment that can easily exceed $1 billion. Property tax contributions at that scale are significant for smaller municipalities. Virginia's data center corridor in Loudoun County generates hundreds of millions in annual tax revenue; it's become so dominant that the county has actually begun limiting further development to avoid over-concentration.

The jobs picture is more nuanced. Data centers are capital-intensive, not labor-intensive. A 200,000-square-foot facility might employ 50 to 200 full-time staff—far fewer than a manufacturing plant of equivalent footprint. The real employment multiplier comes from construction (which is substantial but temporary) and from the induced economic activity that follows when a major tenant anchors a region's digital infrastructure credentials.

Municipalities that understand this going in—rather than discovering it after approval—negotiate better community benefit agreements, structure tax incentive deals more appropriately, and avoid the political backlash that comes when promised "thousands of jobs" materializes as a skeleton crew of highly skilled technicians.

Where Implementation Gets Hard

Knowing you need a data center zoning framework and actually implementing one are different problems.

The first obstacle is technical capacity. Most municipal planning departments weren't staffed to evaluate power purchase agreements, cooling water consumption estimates, or generator emissions profiles. They handle subdivisions and commercial permits. Asking a small township's planning board to evaluate a hyperscale data center application without outside expertise is like asking a general practitioner to perform cardiac surgery—the intent is there, the tools aren't.

The second obstacle is infrastructure coordination. Data centers require heavy power—often requiring substation upgrades or new transmission infrastructure—and they generate significant traffic during construction. Coordinating between a municipality, a utility, a state DOT, and a private developer across a compressed development timeline is genuinely difficult. Zoning ordinances that don't account for this coordination requirement create bottlenecks that delay projects and frustrate everyone involved.

There's also the community acceptance challenge. Residents often conflate data centers with industrial facilities, and the concerns—noise, truck traffic, visual impact, water use—aren't baseless. A diesel generator farm undergoing weekly load testing sounds industrial because it is. Ordinances that include meaningful noise and operational standards, combined with genuine community engagement during the zoning process, tend to produce better outcomes than projects that sail through approval and then generate years of complaint.

What Good Municipal Zoning Practice Looks Like

The municipalities getting this right share a few characteristics.

They start with a clear definition of what a data center is—and importantly, what it isn't. A small edge computing node in a commercial building is not the same use case as a hyperscale campus. Ordinances that treat them identically create either unnecessary barriers to small deployments or insufficient protections against large ones.

They establish performance standards rather than prescriptive ones where possible. Rather than specifying exactly what cooling technology a facility must use, effective ordinances set maximum water consumption per megawatt or maximum noise decibel levels at the property line—then let developers meet those standards however they choose. This approach is more durable as technology evolves and more likely to attract innovative operators.

Stakeholder engagement isn't a checkbox—it's where the ordinance actually gets tested. Utility companies, neighboring property owners, emergency services, and regional economic development organizations all have legitimate interests in how data centers are sited and operated. Municipalities that convene these conversations before finalizing zoning language end up with rules that work in practice, not just on paper.

Finally, consider reciprocity. If a municipality invests in creating a clear, developer-friendly zoning framework, it's reasonable to negotiate community benefit provisions—local hiring preferences during construction, contributions to utility infrastructure upgrades, public safety fund contributions proportionate to facility scale. These provisions are far easier to secure during the zoning negotiation than after a developer has received their permits.

The Pennsylvania model ordinance won't be the last one. As AI infrastructure buildout continues to drive data center demand—analysts project the sector will require hundreds of additional gigawatts of capacity over the next decade—more states will move toward standardized municipal guidance simply because the alternative is chaos.

Cities that do this work now, before the site selectors show up, will have a meaningful advantage: they'll attract better projects, negotiate from a position of knowledge rather than urgency, and avoid the regulatory regret that follows when a poorly specified approval turns into a decade of friction with a neighbor that draws as much power as a small city.

The ordinance exists. The question is which municipalities will use it as a starting point—and which ones will wish they had.

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[INTERNAL LINK: regulatory environment]

[INTERNAL LINK: economic impact of data centers]