The Gilroy City Council on Sept. 14 unanimously approved a temporary citywide moratorium on new data center development while city officials develop new zoning, siting, development and operational standards that are specific to such projects in the future.
The interim urgency ordinance takes effect immediately and will remain in place for 45 days, according to city staff. Under state law, the council may extend the moratorium in two phases, with a maximum total period of two years.
While the moratorium is in effect, the city cannot accept, process or approve applications and entitlements for new data center facilities, city staff said.
A new data center is under construction on Camino Arroyo by Amazon Web Services. That project was approved in 2025 by the city’s community development director, without any requirements for review by the planning commission or city council.
The City of Gilroy has received a pre-application from Amazon for another data center, but no formal application has been filed, city staff said. Any future application would be subject to the moratorium and likely rejected.
The temporary moratorium will not affect construction of the Camino Arroyo data center.
Data centers have become a hot topic in Gilroy and the surrounding area since construction started on the Camino Arroyo facility. Residents have spoken up about the potential impact on the environment and clamored for tighter land use policies—including a moratorium—that could prohibit or slow the development of more data centers.
On Aug. 17, the Gilroy council voted to require more public outreach and planning commission review for all proposed projects that require an environmental impact report, including data centers.
In neighboring Morgan Hill, the city council on Aug. 26 approved its own temporary moratorium on data centers in order to give staff more time to research their options for new zoning rules.
The Gilroy City Council adopted the moratorium under California Government Code Section 65858, which allows cities to temporarily prohibit certain land uses while considering changes to their zoning regulations when immediate action is necessary to protect public health, safety and welfare, city staff said.
“Our residents have asked for a greater voice in decisions about major development in Gilroy, and we are listening,” Mayor Greg Bozzo said in a statement. “The Council’s action to place a temporary moratorium on data centers gives the city and community time to take a closer look at the standards that should apply to any future data center development. The next phase is about working with the community to determine what standards are appropriate for Gilroy going forward.”
Gilroy’s current zoning code does not specifically define data centers as a distinct land use. Instead, data centers are classified under a broader category of data processing establishments, according to city staff.
During the pause, the city will study potential changes to the city code and develop proposed recommendations, led by the community development department and the planning commission for consideration by the council, city staff said.
“While the scope of the review is not yet determined, it would likely consider a broad array of issues associated with data center development, such as water use and cooling technology, electrical demand and grid capacity, noise, aesthetics, backup generator emissions and other potential impacts. Community input will also be incorporated as part of this evaluation to help inform the development of any proposed changes,” city staff said in a press release.
City officials said they will provide additional opportunities for community participation and input as the moratorium and city code review move forward. Staff will also report back to the city council before the initial 45-day moratorium expires. The council may consider extending the moratorium as allowed under state law.
This article was first published in the Gilroy Dispatch.
