title
Zoning Regulations for Data Centers
memo
TO: Honorable Mayor and City Councilmembers
FROM: Colleen Tribby, City Manager
Prepared By: Amy Million, Community Development Director
EXECUTIVE SUMMARY:
summary
The City Council will receive a report and discuss zoning regulations for data centers. The City Council requested this under Item 9 at the September 1, 2026 City Council meeting.
recommendation header
STAFF RECOMMENDATION:
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recommendation text
Receive the report and provide direction.
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FINANCIAL IMPACT:
None.
DESCRIPTION:
Background
On September 1, 2026, the City Council requested that Staff schedule a discussion regarding zoning regulations for data centers. To provide context for this discussion, Staff prepared the following background information regarding data centers.
A ″data center″ is a facility for housing computer systems designed and equipped for the primary purpose of processing, storing, or distributing large amounts of electronic data. Typically, these facilities require a dedicated uninterruptible power supply and cooling systems. While most data centers rely on the electric grid as their primary source of power, they usually provide on-site electricity generation for backup power, most commonly through diesel-powered generators. These backup generators are designed to run only during emergencies, testing, and maintenance. Data centers typically generate a large number of temporary construction jobs but few permanent jobs (approximately one worker per 5,000 square feet).
While the functions and designs of data centers have changed with expanding technology, they are not a contemporary phenomenon. Data centers have been operational in the United States for decades and have expanded along with technology. Starting in the 1960s, data centers housed mainframe computers for large corporations, universities, and governments. The significant expansion in recent years has been in response to increased demand for data storage, data analytics, artificial intelligence, automation, self-driving cars, and other expanding and emerging technologies.
According to Data Center Map, which tracks data centers worldwide, there are currently 10,967 data centers across 174 countries, of which 4,029 (36.7%) are in the United States. According to the California Energy Commission (CEC), there are more than 200 active data centers in California, making it one of the nation’s leading states in data center development, behind only Texas and Virginia.
Data Center Benefits
Revenue generation is typically the main benefit to the local community where a data center is located. Common revenue sources include:
• Property taxes from the land and buildings, which are often worth hundreds of millions of dollars;
• Annual taxes on equipment reported to the Alameda County Assessor;
• Sales taxes on purchases of construction materials, electrical equipment, computers, and other goods if the municipality is used as the point of sale; and
• Utility-related revenue from utility franchise fees.
Data Center Impacts
Each community is unique in its concerns regarding data centers, as are the potential impacts from each data center. However, some common concerns with data centers include:
• High energy use leading to increased energy costs;
• High water use, particularly from cooling systems;
• Noise from cooling systems and backup generators;
• Air quality impacts from backup generators;
• Aesthetic impacts of large, windowless buildings, and related negative impacts on property values and quality of life; and
• Limited permanent job generation.
Cities that allow data centers commonly use zoning to mitigate impacts by regulating where data centers can be located and how they can operate. Each jurisdiction can tailor these regulations to address the unique concerns of the community and help mitigate potential impacts. In most jurisdictions that allow them, data centers are classified as an industrial use and allowed in industrial zoning districts. Locating data centers with other industrial users helps ensure compatibility with adjacent land uses. Other mitigation measures in zoning regulations often include noise limits at the property line, requirements for closed-loop or air cooling and renewable-diesel generators, building setbacks and screening, and community benefit agreements.
Data Center Regulations in Dublin
General Plan
A data center could arguably fit within the General Plan land use designations of Industrial Park or Business Park/Industrial. However, the development would need to comply with the established “no nuisance” standards related to emissions, noise, dust, glare, and odor (General Plan Sections 1.8.1.5 and 1.8.1.6). The General Plan also has several policies directed towards promoting energy conservation and efficiency in new and existing buildings (General Plan Chapters 12 and 13). Power and water, noise, and air emissions from backup generators would be the main project-level issues that are likely inconsistent with these General Plan policies. In addition, the areas east of Fallon Road that have an Industrial Park land use designation are located within the Fallon East Economic Development Zone (EDZ). The EDZ policies in the General Plan emphasize employment-generating uses and other economic development priorities (General Plan Section 11.7.1). Data centers do not appear to be consistent with those policies. Attachment 1 provides an overview of the relevant General Plan policies.
Sections 2.1 and 2.2 of the General Plan address development potential, including jobs generated per land use. Table 1 provides an overview of the applicable land use designations and their focus on job-generating uses in the industrial areas. A typical data center employs far fewer people per square foot than these land use designations assume.
Table 1. General Plan Employee Density
|
Land Use Designation |
Employee Density* |
Planning Area |
|
Industrial Park |
590 sq ft/employee |
Eastern Extended |
|
Business Park/Industrial |
360-490 sq ft/employee |
Primary |
|
Business Park/Industrial: Outdoor Storage |
360-490 sq ft/employee |
Primary |
* Employee density measurements for General Plan purposes are based on gross building square footage and are used to estimate the number of jobs within each classification.
Zoning Ordinance
The Dublin Zoning Ordinance does not specifically identify data centers as a permitted, conditionally permitted, or prohibited use. Per the Dublin Municipal Code (DMC) (Section 8.04.060.C), if a proposed use of land is not specifically included in the Zoning Ordinance, the use is not allowed, unless the Community Development Director finds all of the following:
a. Characteristics and activities. The characteristics of, and activities associated with the proposed use are in substantial conformity with those of one or more of the uses included in the Use Types permitted by the zoning district, and will not involve a higher level of activity, intensity, or population density than the uses included in the Use Types permitted in the zoning district.
b. General Plan and Specific Plans. The proposed use will be consistent with the goals, objectives and policies of the General Plan and applicable Specific Plans.
c. Purpose and Intent of zoning district. The proposed use will meet the purpose and intent of the zoning district that applies to the site.
The Dublin Municipal Code Chapter 8 (Zoning Ordinance) includes a list of permitted and conditionally permitted Industrial Use Types (DMC Section 8.12.050). In addition, a list of permitted and conditionally permitted industrial uses is included in planned development zoning districts that allow industrial uses. All of these use types must meet the Industrial Performance Standards established in DMC Section 8.28 or the respective planned development zoning district (e.g., noise, radioactivity, air pollution, glare or heat, odor, dust, etc.). The characteristics and activities of a typical data center do not appear to be similar to the Industrial Use Types listed in the Zoning Ordinance and planned development zoning districts that allow industrial uses, and do not appear to meet the purpose and intent of the industrial zoning districts.
Building Code Regulations
The California Building Code has been amended to address the impacts of data centers. The 2025 Building Energy Efficiency Standards (Title 24, Part 6), effective January 1, 2026, impose new cooling system efficiency, economizer performance, fan power, and containment requirements on new data center construction, additions, and alterations affecting cooling or electrical systems.
Environmental Review and California Energy Commission Oversight
The CEC has licensing jurisdiction over the energy infrastructure for data centers based on their size. If on-site backup electricity generation is less than 50 megawatts (MW), the municipality is responsible for permitting and environmental review. Between 50 and 100 MW, the operator may apply to the CEC for a Small Power Plant Exemption from licensing. As part of the approval process for the Small Power Plant Exemption, the CEC will complete the environmental review. The municipality will consider the environmental document prepared by the CEC as part of the permitting process. At 100 MW or more, the CEC has exclusive licensing authority and conducts the environmental review.
State Legislation
On September 21, 2026, Governor Newsom signed into law seven new bills focusing on data centers. These new laws increase the regulatory scrutiny associated with developing and operating data centers in California. Table 2 below provides an overview of this legislation, which will be effective January 1, 2027.
Table 2. New Legislation
|
Bill No. |
Overview |
|
SB 1168, SB 886, and AB 2383 |
Directs a California Public Utilities Commission study of future data center rates and shifts electric infrastructure costs away from residential customers and toward data center operators. |
|
AB 2469, AB 1577, and AB 2619 |
Mandates disclosures or estimates of water usage and use of other resources (energy). Requires applicants to provide a water supply assessment, water scarcity plan, efficiency measures, and pay for water infrastructure, if needed. |
|
SB 887 |
Makes data centers ineligible for blanket exemptions from environmental review under the California Environmental Quality Act and offers an expedited court schedule if a project is challenged. |
Data Center Regulations in Other Alameda County Agencies
Communities across California are actively evaluating the impacts of data centers, and many have adopted moratoriums on the establishment of new data centers to allow the time necessary to evaluate the land use impacts and potential standards. Table 3 is a summary of data center regulations in Alameda County. Attachment 2 provides a summary of actions taken in other areas of California, focusing on those that have recently identified the need to evaluate the topic.
Table 3. Data Centers and Regulations in Alameda County Agencies
|
Agency |
# Data Centers * |
Data Center Summary |
Adopted Moratorium |
Current Zoning Regulations |
Proposed Zoning Regulations |
|
Hayward |
4 |
3 operating: two Amazon Web Services sites (24 MW and 35 MW) and Hayward Exchange @ 92 (49 MW). 1 under construction. |
October 20, 2026 (Active) |
Major Conditional Use Permit in industrial areas |
Directed to conduct additional analysis on the impacts on natural resources, and depending on the conclusions of that analysis, to develop updated regulations or an outright ban on data centers. |
|
Oakland |
4 |
3 operating: small to mid-size network and colocation sites. 1 proposed: 20 MW. |
October 6, 2026 (Active) |
Does not regulate the resource use, utility demand, operational characteristics, environmental impacts, or cumulative impacts. |
Directed to study environmental and infrastructure impacts and update planning and building codes. |
|
Livermore |
1 |
1 operating, institutional: Lawrence Livermore National Laboratory computing (federal facility). |
n/a |
Regulate only under general industrial/ commercial use categories, with no distinct definition, overlay, or standard set located in current code. |
n/a |
|
Pleasanton |
0 |
None identified. |
n/a |
Regulate only under general industrial/ commercial use categories, with no distinct definition, overlay, or standard set located in current code. |
n/a |
|
County (unincorp.) |
0 |
None identified. |
n/a |
Regulate only under general industrial/ commercial use categories, with no distinct definition, overlay, or standard set located in current code. |
n/a |
* Data center counts for Hayward come from the City of Hayward’s Data Center Development Applications page. Counts for other jurisdictions come from industry trackers (MoreThanJustParks, Inflect, Datacenters.com) as of November 2026 and may overstate or understate permitted facilities.
Conclusion and Next Steps
Although Dublin does not expressly prohibit data centers, a typical data center would likely have difficulty complying with the City’s existing General Plan and zoning regulations. Because the current regulations do not directly address this use, how a proposal would be evaluated is uncertain for both applicants and the community. To provide that clarity, the City Council could either adopt a policy that expressly bans data centers or establish regulations that clearly permit data centers that meet defined development standards. Based on the direction of the City Council, Staff will take the appropriate steps to prepare a policy for future consideration by the City Council.
STRATEGIC PLAN INITIATIVE:
None.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
The City Council Agenda was posted.
ATTACHMENTS:
1) General Plan Consistency Table
2) Summary of Data Center Regulations Outside of Alameda County