SF Bay Area cities shut the door to new data centers
Bay Area cities, including San Francisco and Oakland, are proposing or enacting moratoriums on new data center construction. This comes amid growing resident concerns about pollution, noise, water usage, and potential impacts on utility bills and electricity supply. Other cities like Oakley, Gilroy, and Richmond have already passed such bans.
San Francisco and Oakland are among several Bay Area cities considering or enacting moratoriums on new data center construction, following in the footsteps of communities like Oakley, Gilroy, and Richmond. Oakland's Life Enrichment Committee voted to advance a moratorium to the City Council, while San Francisco District 10 Supervisor Shamann Walton authored similar legislation, hoping for a permanent ban. This trend reflects a broader concern among residents about the potential negative impacts of data centers.
Local opposition is primarily driven by fears of increased pollution and noise from backup diesel generators, strain on electricity supply and higher utility bills, and excessive water usage. For instance, Pittsburg residents are actively lobbying against an approved 99-megawatt data center due to the planned installation of 37 diesel generators near a middle school. The Union of Concerned Scientists highlights that even for testing, these generators can contribute to air pollution.
Conversely, the data center industry argues that these facilities bring significant economic benefits. Khara Boender of the Data Center Coalition stated that California data centers contributed over $14 billion in taxes in 2024, while Santa Clara's 58 data centers provide 13% of the city's general fund. Industry representatives caution that moratoriums could deter investment and jobs. Meanwhile, Governor Gavin Newsom recently signed laws aimed at ensuring data centers bear the costs of transmission upgrades, addressing concerns about utility rate impacts on residents.
Despite the local bans, experts like Bill Dougherty of CBRE suggest that most data center clients have flexible location needs, often preferring areas like Santa Clara in the South Bay due to more attractive energy pricing and proximity to internet interconnection hubs. It remains uncertain whether these moratoriums will effectively curb data center development in the broader region or simply shift it to more amenable areas.