Construction and announcements of massive new data centers are spreading around metro Atlanta and other parts of Georgia at a breathtaking pace. As they do, local governments are struggling with how to respond as communities affected loudly raise concerns.
Now, Atlanta’s city government has taken action to impose some form of regulation on the industry. This week, city councilors unanimously approved an ordinance to set strict standards for approval of future data centers within city limits. It now awaits signature by Atlanta Mayor Andre Dickens. Once in effect, it will be one of the strictest regulatory actions on the asset class in the country.
Metro Atlanta ranks fourth among the top 10 data center locations in the country, with 1,065 MW capacity. This year alone has seen at least 10 multi-billion-dollar, multi-million-square-foot projects announced in Georgia. The City of Atlanta's new ordinance acknowledges the important role data centers play in the digital economy, but it also “recognizes that their operations place substantial demands on the City’s water and energy resources, with far-reaching implications for public utilities and environmental sustainability.”
Recommended For You
It cites the demands on local infrastructure, such as the construction of large transmission lines, and the need to remove thousands of trees on City-owned land to make room for data centers. The city council said this is something that is “negatively impacting the urban ecosystem, reducing the City’s tree canopy, and disrupting local wildlife habitats.” It's a sore point in a city that prides itself on its old oaks and greenery.
Companies wishing to build data centers will now have to apply for a Special Use Permit (SUP), intended to enable the City to review environmental, water and energy impacts and ensure they align with the city’s goals for sustainability, resource conservation, and infrastructure protection. The application must include detailed plans and topographic information.
It must also contain a water consumption plan that does not strain the local supply, as well as a water conservation and sustainability plan. An energy consumption plan estimating periods of peak electricity demand and mitigating the strain on local power infrastructure will also be required, as well as an assessment of the potential environmental impact of new transmission lines. In addition, applicants must provide a stormwater management plan for managing runoff.
Moreover, the ordinance regulates the size and square footage of data centers. The total floor area may not exceed 50% of the total project's floor space. There are standards for the location of buildings and for their appearance. Data centers will be banned in neighborhood commercial districts, some of which already have bans in place.
Atlanta has already barred data centers within a half mile of transit stations and of its popular Beltline, a network of public parks, multi-use trails, transit and affordable housing along a historic 22-mile railroad.
Projects already underway before the ordinance goes into effect may continue. The list includes a 300,000 square foot data center to be constructed in downtown Atlanta by CIM Group as part of a $4.2 billion mixed-use development, Centennial Yards, partly financed by municipal bonds.
Outside the city of Atlanta, some counties have also taken steps to gain control over the proliferation of data centers within their boundaries. Two of them, Coweta and Douglas, have imposed moratoriums on all new projects within the asset class and companies’ rezoning requests until their implications for communities have been determined.
Legislators in both the Georgia House and Senate have responded to public pressure by passing a bill to suspend tax breaks granted to data centers. However, the bill was vetoed by the Governor, even though, according to the non-profit organization Good Jobs First, state and local sales tax exemptions will cost Georgia $296 million in 2025.
While Atlanta’s ordinance is one of the most comprehensive in the nation, some other jurisdictions are also working on some stricter rules.
In Virginia, considered the epicenter of the U.S. data center sector, a bipartisan group of legislators has introduced a series of bills to tighten regulation of the industry. Last year, the state's Fairfax County approved an ordinance regulating some aspects of data center operations. A more stringent measure was adopted in Loudoun County in March 2025: data centers must now receive a “special exception” that requires a legislative review and public hearings; additional standards are now being developed.
California requires data centers to meet certain standards for heating and cooling systems and to use energy-efficient technologies. Additionally, the state requires reporting of climate impacts and greenhouse gas emissions and additional legislation is under consideration.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
