Phoenix Implements New Zoning Regulations for Data Centers

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A proposed design for a modern data center in Phoenix that aligns with new zoning regulations

News Summary

Phoenix is set to implement new zoning regulations for data centers in response to their rapid growth. The regulations aim to mitigate impacts on local communities by directing facilities away from urban cores, addressing resource consumption, and enhancing architectural appeal. Key meetings will inform recommendations, with the Planning Commission meeting set for June 5, 2025. As data centers’ energy demands grow, these regulations seek to improve sustainability practices and ensure suitable locations are selected for future developments.

Phoenix is set to implement new zoning regulations for data centers in response to their rapid growth both in the Valley and across the nation. The Phoenix Planning and Development Department has recommended that these regulations be approved at the upcoming Planning Commission meeting on June 5, 2025. The regulations aim to address critical factors such as the location, appearance, and resource consumption—including electricity and water—of data centers.

As part of the preparations for the commission meeting, various village planning committees are being briefed on the proposed regulations, which may lead to recommendations. One key meeting will take place on May 19, 2025, focused specifically on the zoning changes for the Ahwatukee Foothills Village Planning Committee.

The new zoning regulations are designed to guide data centers away from urban cores and areas designated for mixed-use developments. Instead, these facilities will be directed toward locations that blend more harmoniously with their surroundings while minimizing potential negative impacts on local communities. The proposed regulatory changes align with the city’s General Plan, which outlines development strategies for the next decade.

Data centers play an essential role in housing the technological infrastructure necessary for the storage, processing, and management of digital information. However, they also come with challenges. These facilities consume substantial amounts of land, generate relatively few employment opportunities, and require significant amounts of electricity and water. A report by Colliers International Group highlights a staggering increase of over 245% in the market share of new and planned data centers in the Phoenix Metro area since 2019.

Existing data centers in the Phoenix Valley already consume an estimated 2,000 megawatts of electricity, and new facilities that have been approved are expected to demand an additional 3,000 megawatts upon operation. Consumption varies dramatically depending on the size of the facility. Smaller centers, measuring 5,000 to 20,000 square feet, typically consume between 1 to 5 megawatts each day, while larger hyperscale facilities can demand between 20 to over 100 megawatts. Considering that a single megawatt can supply the annual electricity needs of 400 to 900 homes, the overall energy demands of these facilities raise significant concerns, particularly in light of rising applications of artificial intelligence that further heighten energy use.

To mitigate these challenges, Arizona’s tax incentives for investments in data centers—renewed in 2021—target investments of at least $50 million in Pima and Maricopa counties and $25 million in other counties. The proposed General Plan amendments will clarify definitions for data centers, specify which zoning districts they can occupy, and establish performance, development, and design standards tailored for these facilities.

Among the key aspects of the proposed regulations is a requirement for data centers to enhance their visual appeal by incorporating varied architectural designs, moving away from the typical concrete box style. Furthermore, the new regulations are set to adopt sustainability practices to maximize energy efficiency, encouraging facilities to utilize green construction codes. They will also need to verify that utility companies possess adequate capacity in the power grid to meet their energy demands.

The city is prioritizing land use strategies that emphasize significant job growth and multifamily housing, rather than facilities that provide minimal employment like data centers. Plans dictate that these data centers will be situated in designated redevelopment areas that necessitate infrastructure improvements; however, the specific locations have yet to be disclosed.

With the Planning Commission meeting on June 5, 2025, and a City Council vote expected shortly after on June 18, 2025, the proposed regulations are poised to shape the future landscape of data centers in Phoenix significantly.