At least 52 Michigan communities have enacted data center moratoriums — temporary pauses that stop the acceptance or approval of permits for certain types of developments.
These pauses won't last forever; most are initially only set to be in place for six months to a year. What communities do with the time they've bought themselves will determine whether they end up with real, enforceable ways to regulate projects from one of the fastest-growing industries in the country.
Michigan has become an attractive destination for AI data centers thanks to its cooler climate, abundant freshwater, and a recent sales tax exemption. At least 30 AI-related data center projects have been built or are in the works, according to reporting by The Gander. But for the municipalities being asked to host them, the calculus is harder: weigh the promised jobs and investment against water and energy consumption that can strain local infrastructure.
“Can't we just say no?” Michigan law does not allow an outright data center ban
Many residents across the state are livid about data centers, and want local elected officials to get serious about regulating them. Craig Kreutzberg is an organizer in Lyon Township, where a 1.8 million square-foot data center complex called Project Flex is in the works. Kreutzberg said the project is not a good fit for his community.
“Just from a water standpoint alone, having lived in Michigan for the vast majority of my life, 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, the director of member information services at the Michigan Townships Association, said the idea that a municipality can “ban data centers” is a common misconception.
“Township officials are normal folks, normal people,” Mullhaupt said. “Everybody starts — unless they've had experience with this — with the concept of, ‘can't we just say no?' What we want people to understand is that there is a process when things that you might think are distressing or scary or different come across the horizon.”
However, under the Michigan Zoning Enabling Act, local governments are not allowed to implement "exclusionary zoning” — meaning totally banning a certain land use — if the land exists and there is a “demonstrated need” for that land use.
Mullhaupt said moratoriums have often been used to respond to a new or developing land use type, such as wind turbines in the early 2000s.
Michael D. Homier, a lawyer who advises Michigan municipalities about their response to data centers, said it is perfectly reasonable to use a moratorium to develop a new regulatory framework.
“If you have a zoning ordinance that doesn't touch on the regulatory aspect of these emerging land uses, then I think you owe it to your constituents or your residents to then develop those regulations to mitigate those potential adverse consequences,” Homier said.
Homier said tech companies are especially attracted to rural farming areas because of the relative affordability of land. However, he said in some cases, there really may not be the appropriate land or resources for a data center and that an industrial or brownfield area would be a more suitable location.
“I'm not taking the position and haven't taken the position that all data centers are bad,” Homier said. “But locating hyperscale data centers in the middle of rural Michigan doesn't seem to be a wise idea to me.”
Ultimately, if a tech company disputes the strictness of a zoning code, it is up to the courts to decide what is acceptable.
What comes next after a moratorium?
Christopher Patterson is a lawyer who works with various municipalities on data center moratoriums and building data center regulatory frameworks.
According to Patterson, once a moratorium is passed, communities turn to their long‑range master plans, which lay out decades-long land use goals and help them understand, in principle, where a use like a data center could fit.
Generally, a master plan acts as the foundation for zoning — the way municipalities divide land into classifications like residential, commercial, or industrial to ensure orderly growth and protect public safety. While not every Michigan municipality zones, all that do are required to have a master plan.
Then, communities get to work drafting or revising the text of their zoning ordinances to decide which specific zoning districts are appropriate for different types of data centers, and set concrete standards for those facilities.
“The interesting and helpful part about zoning is that it is an individual community's own plan, and it's their goals, which they are then placing in that written zoning ordinance, so everybody's sort of going down their own path,” Patterson said. “Every individual community needs to do their homework.”
He said communities are conducting impact studies about water consumption, electric capacity, noise, and more.
“I think you'll see everything from environmental regulations, stormwater, water hydraulics, well feasibility, refuse, construction schedules, noise during those preliminary construction phases of some of these larger projects, and regulations that are probably going to be a little bit more nuanced in breaking down the categories and the sizes of data centers,” Patterson said.
A moratorium’s length must hold up to a legal ‘"reasonableness" standard based on how much time and research is needed to refine zoning codes. Patterson thinks six months to a year might be a “pretty tight timeline” for developing a real regulatory framework, but said case law shows that moratoriums of that length are generally defensible in court.
“When you have a use that you're trying to appreciate all of the land use characteristics necessary to classify it, and at the same time, if you're a municipality going through the master planning process, plus going to then look at the regulatory text of your ordinance, it's going to take some time,” Patterson said.
In Lyon Township, the moratorium came too late for at least one project. Kreutzberg said he is encouraged by an 180-day moratorium on new data center applications that Lyon Township officials enacted in May, but is frustrated that it won’t impact the already-approved Project Flex, a 1.8 million-square-foot hyperscale planned data center campus.
He knows AI is “here to stay,” but wants to see data centers stay miles away from residential areas.
“I would want to see restrictions and regulations put in place so that no data center had any discernible impact whatsoever on the community at large,” Kreutzberg said. “If you are hard set on having your hyperscale data center go on this spot, then, okay, here's the list of non-negotiable criteria that have to be met."
The pressure on local communities hasn't gone unnoticed in Lansing. Lawmakers in the Michigan Senate have proposed bills that would implement a moratorium statewide for one year, while a different set of bills would implement stricter guardrails and requirements for the projects.
