Indianapolis pauses new data centers through 2027 as officials weigh tougher rules

Indianapolis is putting the brakes on new data centers until 2027 to give city leaders time to decide what further restrictions, if any, should govern future proposals.

Here's what to know

The Indianapolis Metropolitan Development Commission approved folding the pause into a zoning ordinance by a 6-0 vote to establish minimum standards for data center developments while leaving room to consider tighter limits, according to WISH-TV .

Attorney Chris Steinmetz told the commission that state law prevents the moratorium from reaching projects already in progress, so developments with prior approval are not affected.

After the vote, Bryce Gustafson, program director for the Citizens Action Coalition, said, "I feel a lot right now. I feel a sense of relief." He added, "But we also realize this is essentially half time. There's a lot of work to be done around getting good guardrails around these data center projects."

City-County Councilman Michael-Paul Hart, the only City-County Council member to oppose the moratorium, said Indianapolis should tighten its standards without shutting the door on new proposals. The Republican councilman said, "Saying 'no' to everything is not a responsible thing to do."

More background

This battle extends far beyond zoning maps. Data centers are emerging as a major point of debate in communities across the country because they sit at the intersection of economic development, electricity demand, water use, and the fast-growing expansion of AI tools.

AI can offer significant benefits, including helping utilities forecast demand, cut waste, and better integrate solar and wind power into the grid. However, the servers that power AI models and cloud computing can also require enormous amounts of electricity and water for cooling, raising concerns about strain on local infrastructure, higher utility costs, and security risks.

Residents have been urging city leaders to step in before more facilities are built. Among them is Elder Mmoja Ajabu, who wanted the moratorium to cover projects already underway, saying that data centers "make plenty of money. But at the expense of people's lives."

Large industrial energy users can affect power planning, land use, traffic, noise, and neighborhood resources, even as cities weigh the promise of jobs and tax revenue.

What's being done?

City-County Councilman Dan Boots, a Democrat, said the council has already set aside funding for an outside study on possible regulations as Indianapolis uses the moratorium period to work on stronger zoning rules.

Before deciding what local standards should be, Boots said officials are examining approaches used elsewhere. "Our intent is to come to a rational, reasonable compromise that protects the people but also protects the economic interests of Indianapolis going forward," he explained.

On September 16, the commission is scheduled to consider major tax abatements for the Sabey and Metrobloks data centers.

Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here .