New York enacts first US moratorium on hyperscale data centres
The measure shifts operational burdens to developers and marks the first state-level ban amid growing national political resistance to digital infrastructure expansion.
New York State has implemented a one-year moratorium on the construction of new hyperscale data centres, becoming the first jurisdiction in the United States to impose such a restriction. Governor Kathy Hochul announced the pause on Tuesday, defining the affected projects as those requiring 50 megawatts of power or more. The directive halts the issuance of new discretionary permits while the state develops a regulatory framework to manage the sector’s impact on infrastructure and resources.
Hochul stated that the action is necessary to prevent data centre development from increasing utility bills and depleting natural resources. During the moratorium, the state will shift operational costs to developers, requiring them to pay higher rates for power, contribute to grid upgrades, provide their own power, and invest in clean energy. The governor also indicated that the state is considering the repeal of sales tax exemptions for data centres.
The moratorium provides time for the state to assess electricity demand and its impact on local communities. New York currently hosts 148 operational data centres, giving it the sixth-largest concentration of such facilities in the country. The move comes as data centre construction has become a political flashpoint across the US, with bans proposed in at least a dozen other states, including Vermont, Michigan, and Virginia.
The policy shift occurs ahead of Hochul’s re-election in November, where she faces Republican opponent Bruce Blakeman. While Blakeman has opposed a ban on data centre construction, Hochul leads him by 20 points in a recent Siena poll, with 52 percent support compared to 32 percent for her opponent. Opposition to data centre construction appears to be a popular position among voters, with polls indicating significant public resistance to local projects.
Concerns driving the pushback include health impacts and racial disparities associated with data centre locations. A recent analysis highlighted that Elon Musk’s xAI Colossus 2 project in Tennessee installed natural gas turbines without securing clean air permits, disproportionately affecting nearby predominantly Black communities. Overall, data centres are projected to contribute to 600,000 asthma-related symptom cases by the end of the decade, according to a 2024 paper from the University of California-Riverside.
