NACo Informational Primer and County Considerations: Data Centers

Introduction

The rapid growth of artificial intelligence and high-capacity cloud computing is accelerating data center development nationwide. AI ready data center capacity is expected to grow about 33 percent annually from 2025 to 2030, driving a surge in local data center proposals.¹ In preparation, county officials are making urgent decisions about land use, energy and water needs and documenting if, where and how these facilities can be sited through local ordinances. Even without express zoning authority, county leaders play a central role in contextualizing proposals and ensuring development balances projected economic benefits with community priorities and long-term community well-being. Understanding local impacts is essential for evaluating new projects, managing existing facilities and planning for long-term infrastructure needs.

Data centers differ from traditional industrial developments in market pace, scale and economic structure. Recognizing these differences helps county leaders set realistic expectations and communicate clearly with departments, residents and private partners.

This resource provides county elected officials, administrators and planning leaders with a high-level framework to evaluate, permit and oversee data center development. Instead of focusing on technical details, it highlights key challenges across the project lifecycle and offers guidance for steering development toward long-term economic and environmental goals.

County Considerations

County governments are often charged with considering the zoning and land use requests that permit the siting and construction of data centers, while ensuring that increased energy and water demands do not negatively impact the community.

Counties typically implement these considerations through zoning ordinances and land use designations, conditional or special use permits that establish site-specific requirements, and site plan review or development agreements that address infrastructure impacts and long-term operational commitments. Depending on the authority within a particular state, a county’s land use and zoning authority related to the siting and construction of data centers may be limited or shared, shaping the county’s role in local development decisions.

Zoning

• Setbacks: While data centers often look indistinguishable from office buildings, their operations and infrastructure requirements more closely match those of a factory. Because of this, jurisdictions have begun establishing considerably larger setback requirements for data centers than for standard buildings. Typical building setback requirements from property lines range from 200 feet to up to 500 feet from a residential property or zoning district. In areas where ‘smart growth’ is a priority, such as near transit stations, these setbacks can be extended much further to ensure prime land is reserved for high-density housing and retail. However, when data centers are grouped within a dedicated ‘overlay district,’ these requirements can be reduced between the centers themselves by more efficiently sharing power and fiber infrastructure.
• Noise: Data centers require large cooling systems to function, and these systems emit a steady hum that can disturb nearby residents. To address this, local governments are setting noise limits, often 65 decibels at the property line and 55 decibels in quieter or residential areas. How these limits are met is up to the data center designer, but common approaches include sound-absorbing or sound-blocking structures, berms or increased setbacks. Ordinances are also beginning to require testing for both A-weighting, which captures high-pitched sounds like fans, and C-weighting, which measures low-pitched vibrations from heavy machinery. Because backup generators used during power outages are often louder than cooling fans, ordinances can establish permissible testing schedules that limit routine testing to daylight hours.
• Architecture: Large data centers can require large buildings that, without clear design requirements, may clash with the community aesthetic. To address this, local governments have begun requiring developers to incorporate architectural features that resemble typical office buildings. These requirements often include variations in building height and depth to break up the building mass and reduce visual scale, along with the addition of real or faux windows and doors to create a more human-scale appearance. Additionally, modern ordinances may forbid the use of overly reflective or industrial-looking materials, helping the facility to fit its surroundings, especially when located near residential areas.
• Power: Large data centers can span hundreds of acres and can have unique power and water infrastructure needs. Data centers can require large amounts of power similar to a medium-sized city, accounting for nearly 4.4 percent of U.S. annual electricity in 2023.¹ In response to transformations in technologies including AI, hyperscale development across the country and new domestic manufacturing, the total national energy demand is estimated to increase 20 percent by 2030.² This level of power demand can trigger the need for additional generation sources and new grid infrastructure. County leaders can best serve their communities by understanding these power needs, the potential impacts on rates and reliability, and the steps they can take to better insulate their communities from those effects.
• Water: Data centers require significant levels of cooling for operation. This cooling, especially when utilizing evaporative cooling systems, can require large quantities of water. Water use associated with data center cooling can range from minimal to substantial depending on facility design and local conditions. In some cases, facilities may rely on reclaimed water and generate wastewater that affects the capacity of local wastewater treatment systems. County leaders can ensure these water needs are met without negatively impacting the host community by including the following requirements as part of the permitting process: water balance studies, discharge water quality standards and long-term monitoring programs with defined curtailment plan triggers.

Intended Use:
This content is intended for educational purposes only. The National Association of Counties (NACo) supports policies and programs that equip county governments with the resources and flexibility needed to serve our residents. NACo does not endorse any particular strategy or approach shared in this resource over another. For official NACo positions, please refer to the American County Platform.