Dallas enters the data center debate, but Texas should weigh in
The city of Dallas is considering updating its zoning rules for data centers due to increasing community concerns about their impacts, such as noise and high electricity demand. The article suggests that the state of Texas should provide broader guidance to avoid a fragmented regulatory landscape and balance industry growth with resident concerns.
The city of Dallas, Texas, is actively engaging in discussions to update its regulations concerning data center development. A City Council committee recently received a briefing on the industry, as current "communications exchange facilities" classifications allow many data center projects to proceed by right without specific council approval. This review comes amidst growing public apprehension, with a Gallup survey indicating 70% of Americans oppose new data centers in their communities due to concerns over noise, immense electricity demand, and the potential displacement of farmland and housing.
While Dallas currently hosts 23 data centers, including a downtown cluster, the city does not yet have hyperscale facilities seen in nearby Fort Worth and Red Oak. City Planning Director Emily Liu emphasized that while local entities like Dallas can regulate land use, zoning, and setbacks, broader issues are regional or statewide. A North Central Texas Council of Governments survey revealed nearly 80% of responding localities believe their infrastructure cannot support data center growth without significant upgrades, despite recognizing the tax revenue potential, with Dallas data centers generating over $10 million annually in property taxes.
The article argues that while Dallas's efforts to review its decades-old rules are commendable, individual cities cannot solve the data center dilemma alone, as a patchwork of regulations could arise, and nearly half of new Texas data centers are projected for unincorporated areas outside city zoning authority. It calls for state-level guidance to balance Texas's business-friendly reputation with residents' concerns. The Texas Legislature already plans to study data center water usage and sales tax exemptions, and the article suggests data centers should be a priority when lawmakers convene in 2027.