In Michigan, a growing number of communities are halting the approval of data center developments, with 52 municipalities implementing temporary moratoriums to pause permit processes. These pauses, typically lasting six months to a year, aim to give local governments time to evaluate and potentially regulate the burgeoning industry better.
Michigan’s appeal as a location for AI data centers stems from its cool climate, abundant freshwater resources, and favorable tax policies, including a recent sales tax exemption. According to The Gander, more than 30 data center projects are either underway or planned in the state. However, communities must weigh the economic benefits of these projects against concerns over their environmental impact, including significant water and energy usage.
“Can’t we just say no?” The Complexity of Banning Data Centers
Residents in Michigan are increasingly vocal about their concerns regarding data centers, urging local officials to impose stricter regulations. In Lyon Township, where the 1.8 million square-foot Project Flex is planned, organizer Craig Kreutzberg expressed frustration over the water consumption associated with such facilities. “Water is a very precious resource, and the fact that these data centers are just consuming millions and millions and millions of gallons of water just part of business as usual, is infuriating,” Kreutzberg said.
Catherine Mullhaupt of the Michigan Townships Association clarified that outright bans on data centers aren’t possible under state law. The Michigan Zoning Enabling Act prevents “exclusionary zoning” if there is a proven need for the land use. Moratoriums, however, are a common tool for municipalities to pause and plan for new types of land use, as was seen with wind turbines in the 2000s.
Legal experts like Michael D. Homier support using moratoriums to craft new regulations for emerging industries. He noted that while rural areas might be attractive for tech companies due to cheaper land, they may lack the necessary infrastructure to support large data centers.
Future Steps Post-Moratorium
Communities often rely on their long-range master plans post-moratorium to guide future land use, including where data centers might fit. These plans help municipalities classify land into categories such as residential, commercial, or industrial. All zoning Michigan municipalities are required to have a master plan.
Lawyer Christopher Patterson explained that communities are now conducting impact studies on things like water usage and noise, using this data to draft specific regulations for data centers. He noted that zoning gives each community the flexibility to tailor regulations to their unique circumstances.
As Michigan communities work through these challenges, state lawmakers are considering broader measures. Proposed bills in the Michigan Senate aim to impose a statewide moratorium and introduce stricter regulations on data center developments.
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