By Trey Wilson, Texas Real Estate and Water Lawyer · Updated August 26, 2026
Across Texas, local governments are reaching for whatever authority they think they have to slow or stop data center development. Some of those tools are solid. Some are symbolic. At least one has already cost a county money. Here is my read on what actually holds up, and what it means for the landowner on either side of the fence.
In the space of about seven months, a Texas county adopted a construction moratorium and rescinded it three weeks later under a $100 million lawsuit. Two county attorneys asked the Attorney General whether counties can do this at all, and got no answer. One county passed a resolution and simultaneously asked the Governor for the authority it had just implied it lacked. A city banned data centers in every zoning district. Several other cities pointedly did not, choosing permit conditions instead and saying out loud that a ban would draw a lawsuit they could not afford.
If you own Texas land, the important question is not which of those governments is right about policy. It is which of those tools will still be standing in two years, because that determines whether the project next door gets built, and whether the buyer under contract on your ground walks away.
My read is that the answer sorts less by geography or politics than by legal authority.
What This Guide Covers
- The short version
- The scorecard: eight approaches, ranked by durability
- The line that decides almost everything
- What counties have tried, and how it has gone
- What cities have tried, and why most are not banning
- The outright ban: how strong is it really?
- The preemption fight, and one rumor to ignore
- The quiet tool that gets far less attention
- If you were planning to sell
- If you are the neighbor
- The first 48 hours
- Frequently asked questions
The Short Version
Cities have real power here. Counties mostly do not. A Texas home-rule city with zoning can restrict data centers heavily and may be able to prohibit them outright. A Texas county has no general zoning authority, no moratorium statute, and an Attorney General opinion already saying a commissioners court cannot pause development this way.
The most durable local tool is not a ban. It is a special use permit requirement paired with performance standards on setbacks, noise, cooling technology, and water. Most Texas cities acting on this are choosing that route deliberately, because it achieves most of the effect while attracting far less litigation risk.
The least durable is a county moratorium. One Texas county adopted one, was sued for $100 million within two weeks, rescinded within three, and agreed to pay the developer’s fees.
The most underused is utility service. Water, wastewater, and reclaimed water commitments are city decisions that work inside the city, in the extraterritorial jurisdiction, and sometimes beyond. A city denied a data center’s service agreement months before it ever adopted a zoning restriction.
Roughly half the data centers planned for Texas are reported to be sited in unincorporated areas, which is exactly where local government has the least power to act. That is not a coincidence. It is the industry reading the same legal map.
One rumor to ignore. Several websites report that a Texas statute took effect in 2026 preempting city data center bans. No such law exists. The Legislature did not meet in 2026.
The Scorecard: Eight Approaches, Ranked by Durability
Texas local governments acting on data centers are, so far as I can tell, drawing on eight tools. They are not equally defensible, and the gap between the strongest and the weakest looks to me like a wide one.
The rankings below are my assessment based on the authority discussed in this article. They are not settled law, and reasonable Texas lawyers could sort some of these differently.
| Approach | Where it is being used | How well it holds up |
|---|---|---|
| Special use permit plus performance standards Data centers allowed only in named districts, only with council approval, subject to setbacks, noise caps, cooling and water conditions | Lewisville, Kerrville, Forney, Mesquite, New Braunfels; proposed in San Antonio | Strongest. Squarely within Chapter 211 zoning authority, individualized, and reviewed under the most deferential standard Texas law offers. Rarely litigated because it is hard to attack. |
| Utility service control Denying or conditioning water, wastewater, and reclaimed water service agreements | San Marcos, Kerrville | Very strong, and underused. Not a zoning act, so it is not limited by zoning’s geographic reach. Reaches projects a city cannot zone. |
| Restricting to one or two districts Permitting data centers only in heavy industrial zones, of which few exist | Lockhart, and effectively the San Marcos position before June | Strong. A classic districting decision of the sort Texas courts have upheld since 1934. Achieves much of a ban’s effect without being one. |
| Incentive-agreement conditions Chapter 380 and 381 agreements and Chapter 312 tax abatements conditioned on standards | Cities and counties statewide | Strong, but voluntary. A government may decline to give away what it was never required to give. Works only where the developer wants an incentive. |
| County discretionary-approval pause A resolution pausing abatements, development agreements, and variances | Hays County | Lawful but limited. Declining discretionary approvals is within county power. It cannot stop a project that needs nothing discretionary. |
| Municipal moratorium A temporary pause on permit processing | Under consideration in San Antonio | Lawful but procedurally fragile. Chapter 212, Subchapter E imposes hearings, findings, a three-fourths vote on final reading, a 90-day term, a 180-day cap, a two-year re-adoption bar, and a mandatory waiver process. Most defects are procedural, and procedural defects are provable. |
| Citywide prohibition Making data centers ineligible in every zoning district | San Marcos | Untested. Doctrinally stronger than its critics claim and weaker than its supporters hope. No Texas court has squarely upheld or struck one down. |
| County moratorium A commissioners court order pausing construction | Adopted and rescinded in Hill County; rejected twice in Hood County; in force in Austin County in modified form | Weakest. Counties have no general zoning power and no moratorium statute. The Attorney General has already said a commissioners court has no such authority as to solar facilities. |
Notice what the top of that list has in common. The most durable tools are the ones that regulate how a data center gets built rather than whether one may exist. My read is that Texas law sits considerably more comfortably with conditions than with prohibitions, and that the local governments which seem to grasp this are getting more of what they want with less exposure.
The Line That Decides Almost Everything
Before any of the eight tools matters, one threshold question decides which are even available: is the land inside a city, inside a city’s extraterritorial jurisdiction, or in unincorporated county territory?
Cities have a real grant of authority
Under Chapter 211 of the Texas Local Government Code, a municipality may regulate “the location and use of buildings, other structures, and land for business, industrial, residential, or other purposes,” and may divide itself into districts of whatever number, shape, and size the governing body considers best. Home-rule cities, meaning cities over 5,000 population that have adopted a home-rule charter, exercise that authority with substantial independence. There are roughly 350 of them in Texas.
Counties have almost nothing
There is no county counterpart to Chapter 211. What exists is Chapter 231, titled County Zoning Authority, which turns out to be a patchwork of narrow, place-specific grants: parts of Padre Island, a slice of Val Verde County near Amistad, restricted zones around military installations, the areas around a specific list of named lakes and reservoirs, the El Paso Mission Trail, and the unincorporated area of Hood County.
Bexar, Comal, Guadalupe, Medina, and Atascosa Counties appear nowhere on that list. Neither do most Texas counties. That the Legislature had to legislate lake by lake is, to my mind, strong evidence that no general county zoning power exists.
Counties do have subdivision platting authority under Chapter 232, which reaches roads, drainage, and plat mechanics. It does not reach use. And a single large tract that is never subdivided may not trigger county platting authority at all.
Which is precisely where the industry is building
Of the data centers currently planned for development in Texas, roughly half are reported to be sited in unincorporated areas.
Read that alongside the paragraph above it. The landowner most exposed to a data center in Texas is usually the one whose local government has the least power to do anything about it. Cheap land, no zoning, and a commissioners court that cannot say no.
So if you are reading this from a place with a rural route address and no city limit sign nearby, the ban you saw in the news does not apply to you, and your county almost certainly cannot enact one. Your options lie elsewhere, and the later sections of this guide are about finding them.
Before anything else, establish which jurisdiction your land actually sits in. Pull the city limit and ETJ maps rather than relying on your mailing address. Every remedy in this guide, and every deadline attached to it, changes with that answer.
Call 210-354-7600.
Representing Texas Land Owners. Not Data Center Developers.
What Counties Have Tried, and How It Has Gone
The county record is the clearest evidence in this whole area, because several counties have now run the experiment.
The Attorney General answered the question in 2023, about solar
In Opinion AC-0003, issued in August 2023, the Office of the Attorney General addressed whether a commissioners court could adopt a moratorium on commercial utility-scale solar projects. The opinion held that county authority “is limited to that which is expressly granted by state law or necessarily implied from express powers,” and concluded that “a commissioners court has no specific authority to impose a ‘moratorium’ on a solar facility.” It added that a moratorium adopted under the Transportation Code provisions the county had cited, if aimed at anything beyond county road use, would likely be held to exceed the commissioners court’s authority and therefore be invalid and unenforceable.
Nothing in that reasoning strikes me as specific to solar. It reads more like a statement about what Texas counties are.
What happened when a county did it anyway
Hill County adopted a one-year construction pause in unincorporated areas in May 2026, covering battery storage over five megawatts, power generation over five megawatts, and data centers over a stated square-footage threshold. A developer sued in federal court within about two weeks, seeking $100 million and alleging the county acted ultra vires because Texas counties are creatures of statute with no inherent police power, together with takings and due process claims.
The county rescinded the moratorium in early June and replaced it with a project review checklist requiring disclosures on infrastructure, traffic, water, and resource impacts. The suit was dismissed with prejudice in July on the plaintiff’s own stipulation, and the county agreed to pay $100,000 in legal fees.
No court decided anything, so the episode settles no legal question. But the county’s own conduct, and the fee payment, suggest how its counsel assessed the risk.
Two counties asked, and are still waiting
Two county attorneys have since put the data center version of the question to the Attorney General. RQ-0633-KP, from Hood County, asks whether the county may declare a moratorium on industrial development. RQ-0634-KP, from Delta County, asks seven questions about county authority over energy and data facilities, including whether any such authority could extend to “data centers or data mining facilities, particularly those implicating cybersecurity, water use, or critical infrastructure concerns.”
Both were received in late February 2026. Neither has been answered. The statutory period for issuing an opinion has run on both, though the statute permits the Attorney General to notify the requestor in writing that an opinion will be delayed, and such notices are not published.
Whenever either opinion issues, it is likely to be the most consequential development in this area for landowners in unincorporated Texas. Both are worth watching.
The workarounds, and what they tell you
Counties that read the room have gotten creative, and the creativity is itself informative.
Hays County adopted a resolution, not an ordinance, pausing discretionary approvals for high-water-use development, meaning tax abatements, development agreements, and variances, and created a review board. It also petitioned the Governor for a special session to obtain expanded authority for counties to protect water availability. A county publicly asking the Legislature for more authority is difficult for me to read as anything other than a county doubting the authority it already has.
Austin County structured its pause around equipment-sourcing audits under the Lone Star Infrastructure Protection Act rather than as a flat construction ban. Whether that survives depends on whether a court sees it as what it says it is or as a use prohibition wearing a different hat.
The design principle I see running through all of it is the line between discretionary and ministerial. A county has wide latitude to decline an incentive it was never obligated to grant. It has no latitude to refuse to process a plat that meets its published standards.
Disaster declarations do not fill the gap, and drought proclamations have been used as a hook. Under Section 418.108 of the Texas Government Code, a local disaster declaration may not be continued or renewed for more than seven days without the governing body’s consent. The section grants evacuation and entry, exit, and occupancy control powers, and attaches short outside limits to the restrictions it authorizes. Nothing in it authorizes suspending permit or plat review, and nothing in it supports a 180-day anything.
What Cities Have Tried, and Why Most Are Not Banning
The municipal picture is more varied and, for a landowner, more consequential, because these tools carry real force.
The pattern worth seeing is that most Texas cities acting on data centers are not banning them. They are making them conditional, expensive, and slow.
- Lewisville requires a special use permit, allows data centers only in light industrial, warehouse, and heavy industrial districts, prohibits them in residential districts, requires hearings before both the planning commission and the council, and reviews noise and water capacity for compatibility.
- Forney made data centers a conditional use in several districts, imposed a minimum 1,000-foot separation from any residentially zoned or residentially used property, and required all cooling, ventilation, generator, and power equipment to be fully enclosed.
- Kerrville restricted rather than banned, and added water capacity approvals requiring developers to disclose cooling systems and water usage. Its planning director’s stated reasoning comes close to the thesis of this article: an outright ban usually ends up more contested.
- Mesquite has been briefed on a framework with a five-acre minimum lot, a 65 decibel cap, technical and noise studies, utility demand analysis, and a water impact plan, and would not apply it to projects already in progress.
- Lockhart defined data centers and confined them to heavy industry, which as a practical matter means two areas of the city.
- El Paso has moved on a framework with a 300-foot minimum from residential neighborhoods and ecological sites plus a special use permit requirement.
- New Braunfels declined a moratorium in August 2026 and instead directed staff to require a special use permit citywide, limit data centers to industrial districts, mandate closed-loop dry cooling, impose noise restrictions with acoustic walls, require quarter-mile buffers from neighborhoods of twenty or more homes, schools, medical facilities, and water bodies, require developer-provided water rights, and charge wastewater impact fees.
- Alvin, which has no zoning at all, passed a resolution saying it does not want data centers. Its own assistant city manager described resolutions as not having a lot of meat to them.
Compare that list against the durability scorecard. Almost every one of those cities landed in the top three rows. I do not read that as timidity. It looks to me like competent municipal lawyering.
For a landowner, the difference between a ban and a conditional-use regime is the difference between a closed door and a negotiation. Under a special use permit regime, your buyer’s project is not prohibited; it is subject to conditions. Conditions are negotiable, appealable, and, when they cross into demands for land or money, potentially subject to the constitutional limits on exactions that the U.S. Supreme Court extended to legislatively imposed permit conditions in 2024. That is a materially better position for a seller than a prohibition, and it is often a materially better position for a neighbor too, because conditions are enforceable in a way that a project simply moving to the county is not.
The Outright Ban: How Strong Is It Really?
One Texas city has gone all the way. In June 2026, San Marcos amended its Land Use Matrix to make data centers ineligible in every zoning district, on a 4-3 vote, as part of a broader overhaul of its development code that also revised permitting, parkland dedication, and tree mitigation.
A state senator has said publicly that the ordinance is unlawful and expects it to be challenged. As of late August 2026, no one has sued.
Here is my assessment, which does not match either side’s talking points.
The ordinance is stronger than its critics say
The standard of review is a steep climb for challengers. Zoning is a legislative act, and the ordinance arrives in court presumed valid. In City of Brookside Village v. Comeau, the Supreme Court of Texas held that courts have no authority to interfere unless an ordinance is unreasonable and arbitrary, a clear abuse of municipal discretion, and that the challenger bears an “extraordinary burden” to show that no conclusive or even controversial or issuable fact or condition existed authorizing passage. If reasonable minds may differ, the restriction stands. In Mayhew v. Town of Sunnyvale, the court held that if it is at least fairly debatable that the decision was rationally related to legitimate government interests, it must be upheld. Water supply and grid capacity in a fast-growing city strike me as well within the range of concerns a council could rationally act on.
The comprehensive plan argument looks weak to me. Section 211.004 requires zoning “adopted in accordance with a comprehensive plan,” and its list of design purposes is disjunctive, so a city needs to satisfy only one. And in Powell v. City of Houston, the Texas Supreme Court held that comprehensive zoning ordinances satisfy the comprehensive plan requirement of Section 211.004. Where a prohibition rides inside a comprehensive code rewrite implementing an adopted plan, I have trouble seeing where this argument goes.
Spot zoning and uniformity appear to me to cut for the city. In City of Pharr v. Tippitt, spot zoning was defined as an ordinance that singles out a small tract for treatment differing from surrounding land. A prohibition applied identically everywhere is the conceptual opposite, and Section 211.005(b)’s uniformity requirement is fully satisfied by it. The counterintuitive consequence, if I have this right, is that a partial ban would be more exposed on these grounds than a total one.
Texas does not appear to have adopted a rule against banning a use everywhere. There is a doctrine shifting the burden to the municipality once a challenger shows total exclusion of a lawful use. It is Pennsylvania law, traceable to Beaver Gasoline Co. v. Zoning Hearing Board of Osborne Borough and described in Miller & Son Paving, Inc. v. Wrightstown Township. I have located no Texas decision adopting it, and Texas courts have shown no appetite for importing it. A challenger arguing total exclusion in Texas is arguing from out-of-state persuasive authority into the teeth of the ordinary reasonableness test.
And weaker than its supporters hope
The theory with actual Texas traction is retroactivity, not total exclusion. In Zaatari v. City of Austin, the Third Court of Appeals struck down Austin’s elimination of non-owner-occupied short-term rentals under the Texas Constitution’s prohibition on retroactive laws. But in Modern Builders, LLC v. City of Fort Worth, decided in May 2026, the Second Court of Appeals upheld a ban on short-term rentals in all single-family districts and distinguished Zaatari because Austin had expressly allowed the use by ordinance since 2012 while Fort Worth never had, so the Fort Worth owners lacked any settled expectation.
That distinction seems to me to transfer closely. A retroactivity challenge is a real weapon for an owner whose use the city previously authorized, and close to useless for a would-be new entrant.
There is also a live procedural question worth watching in any of these adoptions. Where a prohibition is added by floor amendment at a second reading, under a published caption that promised to “provide standards” for a use rather than to prohibit it, the sufficiency of the notice is a fair question. Procedural attacks sometimes succeed in Texas where substantive attacks fail, and this one has not been tested.
The Texas Supreme Court has already declined to answer
In 2023, in City of Grapevine v. Muns, two justices wrote separately when the court denied review, noting that the case implicated the extent to which municipal bans on short-term rentals pass constitutional muster under the Takings and Due Course of Law Clauses, and that the denial expressed no comment on the merits. The court passed because of what it called complex anterior questions of exhaustion and enforcement.
So when someone says a ban on development has never been upheld in court, the accurate and more useful response is narrower: no Texas court has squarely upheld a citywide prohibition of a lawful use, and no Texas court has squarely struck one down. The question is open, and whichever city gets sued first is likely to answer it for everyone.
The Preemption Fight, and One Rumor to Ignore
Two statutes are being invoked against city bans. Both, in my view, have problems the coverage has not worked through.
HB 2559 governs moratoriums
House Bill 2559, effective September 1, 2025, tightened the municipal moratorium provisions in Chapter 212, Subchapter E. A city adopting a development moratorium must now hold two public hearings not less than twenty-eight days apart, publish notice on the 30th day before a hearing, make a final determination not later than the 12th day after the second hearing, give the ordinance at least two readings not less than twenty-eight days apart, and pass it on final reading by the affirmative vote of at least three-fourths of all members of the governing body. The moratorium expires in ninety days unless extended on written findings, cannot exceed an aggregate of 180 days, and cannot be re-adopted for two years as to the same harm, property type, or geographic area.
The argument being made is that a permanent zoning prohibition is a de facto moratorium exceeding 180 days. The difficulty is that Subchapter E regulates moratoriums, and a permanent amendment to a use table is not one. Land use practitioners quoted on the question have said the same.
There is also an irony in the argument. If such an ordinance were a moratorium, a 4-3 vote would fail the three-fourths requirement outright. The characterization is not a technicality. It may be the difference between a valid ordinance and a void one.
There is a second problem with the moratorium theory that appears to have gone unnoticed. Section 212.131(4) defines “commercial property” for the moratorium subchapter to exclude “heavy industrial use, or use as a quarry.” Section 212.131(3) defines “property development” by reference to residential or commercial property, and Section 212.132 applies the subchapter only to moratoriums affecting residential property, commercial property, or both.
A data center classified as heavy industrial appears to fall outside Subchapter E entirely. Whether that means a city may impose such a moratorium free of the subchapter’s limits, or lacks the power altogether because the subchapter is the exclusive grant, is unanswered. I have located no Texas case, no Attorney General opinion, and no commentary addressing it. Note also that heavy industrial classification is exactly where several cities are choosing to put data centers, which makes the question more than academic.
The Death Star law does not list the zoning statute
House Bill 2127, the Texas Regulatory Consistency Act of 2023, is not a general grant of preemption. It inserts a field-preemption section into each of several substantive codes and creates a private cause of action codified at Chapter 102A of the Civil Practice and Remedies Code.
Section 102A.002 enumerates the fields: the Agriculture Code, the Business and Commerce Code, the Finance Code, three chapters of the Health and Safety Code, the Insurance Code, the Labor Code, the Natural Resources Code, the Occupations Code, the Property Code, and one section of the Local Government Code.
That one section is Section 229.901, which governs animal businesses.
Municipal zoning authority lives in Title 7 of the Local Government Code. Title 7 is not an enumerated field. On the statutory text, I do not see how the Regulatory Consistency Act reaches municipal zoning, subdivision regulation, platting, or drainage authority.
The Act does supply a real litigation vector that landowners should not dismiss. Any person with an injury in fact, actual or threatened, or a trade association representing that person, has standing. Immunity is waived. Remedies are declaratory and injunctive relief plus fees, though not damages, and there is a three-month pre-suit notice requirement. A well-funded trade association could file tomorrow. The question is whether it clears the enumerated list.
As for the Act’s own validity, the Third Court of Appeals reversed a 2023 trial court ruling that had held it unconstitutional, and did so on standing, because no ordinance had yet been challenged under it. That is not a merits holding. The constitutional attack revives the moment someone invokes the statute against a specific ordinance.
There is no data center preemption statute
Several websites report that a Senate Bill 2272 took effect in 2026 barring Texas municipalities from prohibiting data centers in industrially zoned areas. This is not accurate, and it is circulating widely enough to be worth correcting.
Senate Bill 2272 of the 89th Legislature concerned air quality permits for concrete crushing facilities and concrete plants, and it died in committee in the spring of 2025. More fundamentally, no Texas legislative session of any kind convened in 2026. The 89th Legislature met in regular session and in two called sessions, all of which adjourned in 2025, and the next regular session begins in January 2027.
Calls for a special session followed the Governor‘s August 2026 directive to state regulators, but none has been called. Whether the next Legislature gives counties more authority or takes authority away from cities is the open question, and both directions have advocates.
The Quiet Tool That Gets Far Less Attention
Everything above concerns land use authority. The most effective tool in Texas right now may not be a land use tool at all.
Months before San Marcos prohibited anything, its council denied a preliminary service agreement for a proposed data center on a 5-2 vote, after water supply concerns had dominated nearly a year of deliberation. That was a utility decision. It stopped the project anyway.
The same dynamic reaches past the city line. A council member has publicly noted that a facility sitting just outside the city is already approaching the city about reclaimed water, and put the point plainly: the idea that these facilities can just exist without connecting to something is not the reality. Kerrville built the same logic into its code through water capacity approvals requiring disclosure of cooling systems and water usage amounts.
For a landowner this cuts both ways, and both are worth understanding.
If you are the neighbor, the service commitment is often a more realistic pressure point than the zoning map, and it operates in the extraterritorial jurisdiction and sometimes beyond, where zoning does not reach. Service extension decisions, capacity commitments, wastewater agreements, and reclaimed water contracts all carry public processes.
If you are the seller, that same fact is a risk you should be pricing into your contract. A buyer who cannot get a service commitment cannot build, and a purchase agreement that treats utility service as the buyer’s problem after closing is a very different document from one that makes it a condition precedent. These questions run into the groundwater issues covered in our guide on whether a data center will drain your water well and the deal terms in the guide to selling property for a data center.
Section 245.001(1) of the Local Government Code defines “permit” to include a “contract or other agreement for construction related to, or provision of, service from a water or wastewater utility owned, operated, or controlled by a regulatory agency.” In a data center matter the utility service application may be the earliest qualifying filing in the chain, which means it may be the filing that starts the vested rights clock discussed in the next section. That is not obvious, and it is the kind of detail that decides cases.
Water is the stated reason behind most of these ordinances, and the public figures are all over the map. One Central Texas project was reported at a one-time system fill in the tens of thousands of gallons. Another was reported at tens of thousands of gallons per day. A third was described as consuming more than twenty-five million gallons annually. A developer in another city disclosed annual use of 300,000 to 400,000 gallons, roughly three households.
Those numbers are not necessarily inconsistent, because they measure different things about different cooling designs. A genuinely closed-loop or air-cooled system fills once and recirculates; an evaporative system consumes continuously. The questions that separate them are makeup water, blowdown, whether evaporative assist engages in summer peak, and what the design actually does in a Texas August rather than in the brochure.
Any landowner evaluating a project, and any council member voting on one, should insist on the design basis and the peak-condition figures rather than the annual average. In my view that single question is worth more than the entire public debate about gallons.
If You Were Planning to Sell
Almost everything written about local data center restrictions is written for the neighbor who wants one. Very little is written for the owner who had a contract, a price, and a closing date, and now has an ordinance.
That owner has real claims. They are harder than they look, and one of them has a fuse.
Chapter 245 vested rights, and the application you may wish you had filed
Chapter 245 is the strongest tool I know of here, and it turns on one question: was an application on file before the ordinance took effect?
Section 245.002(a) requires a regulatory agency to consider a permit application solely on the basis of the requirements in effect at the time the original application is filed. Rights accrue on filing an application giving the agency fair notice of the project and the nature of the permit sought. Where a series of permits is required, the rules in effect at the first filing govern all of them. Section 245.006 waives the political subdivision’s immunity from suit and allows fees to the prevailing party. Chapter 245 binds counties as well as cities.
The exemption at Section 245.004(2) is where I see practitioners go wrong. It exempts municipal zoning regulations that do not affect a list of items including “property classification.” Read the double negative. A zoning regulation that does affect property classification is not exempt, and is therefore inside Chapter 245’s protection.
The authority is thin and in tension. In FLCT, Ltd. v. City of Frisco, a memorandum opinion, the Fort Worth court read the exemption narrowly, holding that a property’s classification pertains to the larger district in which it is zoned and that an ordinance adding restrictions within an existing district affected that classification. Against that, in Milestone Potranco Development, Ltd. v. City of San Antonio, the Fourth Court of Appeals stated the baseline that zoning regulations are excepted from the vested rights statutes. One intermediate court reading it broadly, one stating the baseline the other way, and no Texas Supreme Court decision. I would not treat this question as settled.
Two limits are firm. Chapter 245 protects permit applicants, not owners merely under contract or marketing land. And in Anderton v. City of Cedar Hill, the Dallas court held that the ongoing operation of a business is not a project creating vested rights.
This produces the most time-sensitive advice in this guide. If a data center transaction is pending on your land and a moratorium or code amendment is being discussed at your city hall, filing a qualifying application before the ordinance takes effect may create rights that survive it. Sections 212.138 and 212.139 expressly preserve Chapter 245 rights against a later municipal moratorium and bar a moratorium that would prohibit or delay processing a zoning application filed before its effective date.
The window closes when the ordinance passes. There is no way to reopen it afterward.
Chapter 2007, and a 180-day fuse that runs against counties only
The Private Real Property Rights Preservation Act is friendlier than constitutional takings doctrine, and it contains a trap.
Section 2007.002(5)(B) defines a statutory taking as a governmental action that restricts an owner’s rights and is the producing cause of a reduction of at least 25 percent in market value, comparing value as if the action were not in effect against value as if it were. A bright line, far easier than the multi-factor constitutional test, and a signed developer contract is unusually good evidence of the first number.
The remedy is unusual too. The owner is entitled to invalidation of the action; the court must still determine the damages figure; and the governmental entity then elects whether to pay it and keep the regulation or refuse and lose the regulation as applied to that owner. For a landowner whose objective is to complete a sale, rescission is often worth more than the check.
Three catches, and the first is decisive.
First, Section 2007.003(b)(1) excludes actions by a municipality, except for a narrow category covering a municipal action effective in the extraterritorial jurisdiction that does not impose identical requirements throughout the entire ETJ. A city zoning ordinance inside the city limits is categorically outside Chapter 2007. Counties have no equivalent carve-out. This is counterintuitive and it determines which claims exist.
Second, Section 2007.021(b) requires suit within 180 days after the owner knew or should have known that the action restricted the owner’s rights. Six months negotiating with a commissioners court can consume the entire claim.
Third, Section 2007.026 awards fees to a prevailing owner and to a prevailing governmental entity. It runs both ways.
Before litigating value against a county, check the paperwork. Section 2007.043 requires a governmental entity to prepare a written takings impact assessment before giving the public notice required by Section 2007.042, and Section 2007.044(a) provides that a governmental action requiring such an assessment is void if an assessment is not prepared.
Whether a county prepared a compliant assessment and published the required notice is a documentary question answerable from the county clerk’s file. No appraiser, no hydrologist, no battle of experts. In my experience it should be the first thing anyone looks at in a county-order case, and it is rarely what anyone looks at first.
Why the constitutional takings claim is harder than it sounds
Sheffield Development Co. v. City of Glenn Heights reads to me as close to the worst case a Texas landowner could face, on facts that rhyme with this situation. A developer closed on 194 undeveloped acres. Three days later the city imposed a moratorium on plat filings, extended repeatedly over roughly fifteen months. The city then rezoned to require larger minimum lots, cutting permitted density roughly in half. The jury found value fell from $970,000 to $485,000.
The Texas Supreme Court held there was no compensable taking. The economic impact was not severe enough where substantial value remained, the investment-backed expectations were speculative, and the rezoning was general in character rather than aimed at the plaintiff.
Mayhew explains why the expectation problem is structural: the existing and permitted uses of the property constitute the primary expectation affected by regulation. An owner marketing raw ranch land to a data center developer has a prospective expectation, not an existing or permitted one. The pending contract is excellent evidence of value under Chapter 2007’s 25 percent test and comparatively weak as an investment-backed expectation under the constitutional analysis. Those are different roles for the same document, and conflating them, in my experience, produces bad advice.
How diminished value is proved, and what it is worth, is covered in more depth in our guide on whether a data center next door lowers your property value.
What changed in 2025
One thing has moved in the landowner’s direction. In The Commons of Lake Houston, Ltd. v. City of Houston, decided in March 2025, the Texas Supreme Court held that a regulation can cause a compensable Texas taking even if it results from a valid exercise of the government’s police power, and that whether a regulation is a valid police power exercise is simply irrelevant to whether it causes a compensable taking.
For decades Texas local governments defended land use restrictions by asserting that a legitimate police power exercise is categorically immune. That defense appears to be gone. Every data center ordinance adopted in Texas since March 2025 has been adopted into what I read as a materially more landowner-favorable environment than the one that produced Sheffield.
Two caveats keep this honest. Commons removed a defense; it did not lower the substantive bar, and Sheffield remains good law on the factors themselves. And the decision is recent enough that its subsequent history is worth checking before anyone relies on its finality.
If You Are the Neighbor
Most neighbors reach for a lawyer when they should first reach for a petition.
The Legislature restructured the zoning protest mechanism in 2025 through House Bill 24, repealing the old provisions in Section 211.006 and relocating them to new Section 211.0061. A written, signed protest by the owners of at least 20 percent of the area covered by a proposed change, or at least 20 percent of the adjoining land extending 200 feet from that area, requires the affirmative vote of at least three-fourths of all members of the governing body for the change to take effect.
House Bill 24 narrowed that tool, but only for housing. Section 211.0061(b)(3) raises the threshold to 60 percent and drops the vote to a simple majority where the change allows more residential development without adding commercial or industrial uses. And Section 211.0063 removes the protest procedure entirely for a “proposed comprehensive zoning change,” defined as a change allowing more residential development uniformly across districts, a new citywide code or map, or a residential-increasing overlay along a major corridor.
An industrial rezoning for a data center is none of those things. Neighboring landowners remain squarely in the 20 percent, 200-foot, three-fourths track.
Two details govern whether the petition works. Streets and alleys are counted in the area calculation. And the area is computed in the aggregate across all tracts subject to the change rather than tract by tract, which makes a large multi-tract rezoning meaningfully harder to protest than a single-parcel one.
Two notice provisions are also worth knowing. Section 211.006(a-1) requires notice at least ten days before a hearing when a proposed change would make a currently conforming use nonconforming, in specified bolded language warning that the owner may lose the right to continue the current use. And Section 211.0073 requires a home-rule city to post a 24 by 48 inch notice sign on the affected property at least ten days before the zoning commission hearing, maintained until final determination.
If those steps were skipped, document it contemporaneously. Photograph the absence of the sign. Keep the envelope.
Nonconforming use status is a reprieve, not a shield. Under Board of Adjustment v. Wende, a nonconforming use must be actual rather than merely contemplated when the restriction takes effect. And under City of University Park v. Benners, property owners acquire no constitutionally protected vested right in a use once commenced or a zoning classification once made, and a city may terminate a nonconforming use through reasonable amortization. What counts as a reasonable amortization period for a nine-figure industrial facility has never been decided in Texas.
Where This Is Headed
Three things will determine the next chapter, and landowners on both sides should be watching all of them.
The pending Attorney General opinions. Two requests squarely presenting county authority over data center moratoriums have been pending since February 2026. Whichever way they come out, they will settle the county question for practical purposes.
The first lawsuit against a citywide prohibition. No one has sued yet. When someone does, Texas gets an answer to a question its Supreme Court has twice declined to reach.
The 2027 legislative session. The Legislature convenes in January 2027 and will face pressure from both directions: to give counties authority they currently lack, and to strip cities of authority they currently have. The record built between now and then, including whatever happens to the ordinances already adopted, will shape which way that goes.
In the meantime, the state layer continues to move separately. The Governor’s August 2026 directive to state regulators paused interconnection review for a large queue of projects, but it operates at the state regulatory level and does not change local government authority in either direction. That directive is covered in our analysis of what the pause does and does not do.
The First 48 Hours
If a local government near you has acted, or is about to, these steps preserve options. They cost very little and cannot be taken retroactively.
- Establish which jurisdiction you are in. Inside the city limits, inside the ETJ, or unincorporated. Pull the maps rather than relying on your mailing address.
- Get the instrument, not the news story. The ordinance or order, the agenda packet, the staff report, the exhibits, and the minutes. Whether a measure is a moratorium, a zoning amendment, a resolution, or a permit condition decides most of these disputes, and you cannot tell from a headline.
- Find out whether anything was filed. If a developer had a project on your land, determine whether any application, plat, plan, or utility service agreement was filed before the effective date, and get the date-stamped copy. This single fact may be worth more than everything else combined.
- If a county acted, request the takings impact assessment. Ask the clerk for the written assessment and the published notice. If neither exists, that is a statutory defect, not a judgment call.
- Calendar deadlines by claim, not generally. A statutory takings claim against a county runs 180 days from when you knew or should have known. A protest petition must be filed before the vote. A waiver request under a municipal moratorium requires a council vote within ten days. These are different clocks.
- Document conditions now. Whether you hope to sell or hope to stop the project, photograph and record current conditions: wells and water levels, drainage patterns, road surfaces, fences, and improvements. If a project is eventually built, today’s record is the baseline everything is measured against later.
- Preserve everything from the developer. Letters of intent, options, correspondence, appraisals, and offers. If value is ever litigated, an arms-length offer is among the strongest evidence available.
A local ordinance can be an opportunity or a loss depending on which side of it your land sits, and the legal tools are different in each case. If your city or county has acted, or has one of these items on an upcoming agenda, the useful conversation is about what is actually on file and which deadline is already running.
Call 210-354-7600 to discuss your situation.
Representing Texas Land Owners. Not Data Center Developers.
Related Guides
- Texas Data Center Landowner Attorney, the hub for this series
- A Texas Landowner’s Guide to Selling Property for a Data Center
- Living Next to a Data Center: A Texas Landowner’s Guide
- Will a Data Center Drain My Water Well?
- What Happens When Data Center Construction Floods My Land?
- When Data Center Lights or Noise Interfere With Your Property Enjoyment
- Will a Data Center Next Door Lower My Property Value?
- Texas Data Center Litigation: Challenging Governmental Approvals
- Texas Data Centers: What Filings Are Actually Required?
- Governor Abbott Paused Texas Data Centers: What It Means for Landowners
Frequently Asked Questions
Can a Texas city ban data centers?
A home-rule city with zoning can certainly restrict them heavily, and one Texas city has now prohibited them in every zoning district. Whether a total prohibition survives has not been decided. Chapter 211 of the Local Government Code gives cities broad authority over the use of land, a zoning ordinance arrives in court presumed valid, and Texas does not appear to have adopted the rule followed in some other states that a total exclusion of a lawful use is presumptively invalid. In 2023 the Texas Supreme Court declined to decide the closest analogous question.
Can a Texas county ban data centers or adopt a moratorium?
Almost certainly not. Texas counties have no general zoning power, and the moratorium chapter of the Local Government Code applies to municipalities. In 2023 the Attorney General concluded that a commissioners court has no specific authority to impose a moratorium on a solar facility, reasoning that county authority is limited to what state law expressly grants or necessarily implies. One Texas county adopted a data center moratorium in 2026, was sued for $100 million, rescinded it within three weeks, and paid the developer’s fees.
Which local restrictions on data centers actually hold up in Texas?
In my assessment the most durable is a special use permit requirement paired with performance standards on setbacks, noise, cooling technology, and water use, which is what most Texas cities acting on this have chosen. Also strong are limiting data centers to one or two industrial districts, conditioning incentive agreements, and controlling water and wastewater service. Municipal moratoriums are lawful but procedurally demanding. Citywide prohibitions are untested. County moratoriums are the weakest of all.
Did a new Texas law preempt city data center bans?
No. Reports that a Senate Bill 2272 took effect in 2026 and preempted city data center bans in industrial areas are inaccurate. That bill concerned air quality permits for concrete plants and died in committee in 2025. The Texas Legislature did not convene in any session in 2026, and the next regular session begins in January 2027. There is currently no Texas statute addressing whether a city may prohibit data centers.
Does the Texas Regulatory Consistency Act stop a city from restricting data centers?
Probably not on the statutory text. House Bill 2127 preempts local regulation only in fields occupied by an enumerated list of codes. The only Local Government Code provision on that list is Section 229.901, which concerns animal businesses. Municipal zoning authority sits in Title 7 of the Local Government Code, which is not an enumerated field. The Act does create a private cause of action with an immunity waiver, so a challenge could be brought, but it would have to clear that threshold problem.
Why are so many Texas data centers being built in unincorporated areas?
Because that is where local government has the least authority. Texas counties have no general zoning power and cannot prohibit a land use. Roughly half the data centers planned for Texas are sited in unincorporated areas. The practical consequence is that the landowner most exposed to a data center is usually the one whose local government can do the least about it.
My land was under contract to a data center developer and the local government acted. Do I have a claim?
Possibly, and the answer turns first on whether any permit application for the project was filed before the ordinance took effect. If it was, Chapter 245 may require review under the earlier rules. If nothing was filed, the available theories are harder. Note also that the Texas statutory takings act generally does not apply to municipal actions inside city limits, so a city ordinance and a county order produce very different claims.
How long do I have to sue over a county order that killed my land sale?
A claim under the Private Real Property Rights Preservation Act must be filed not later than 180 days after the owner knew or should have known that the governmental action restricted or limited the owner’s rights. Other theories carry different and sometimes much longer deadlines. Do not assume one deadline governs everything, and do not assume that time spent negotiating with the county preserves your rights.
Does a ban mean a landowner gets paid for lost value?
Usually not automatically. In one leading case the Texas Supreme Court held that a moratorium followed by a rezoning that cut a property’s value roughly in half was not a compensable taking. The statutory route, which uses a 25 percent value reduction test, is easier but applies mainly to counties and carries a short deadline. A 2025 Texas Supreme Court decision did remove the argument that a valid police power exercise is automatically immune from takings liability.
What can a neighbor do before the council votes?
Organize a written protest petition. Under Section 211.0061 of the Local Government Code, a protest signed by owners of at least 20 percent of the area covered by a proposed change, or 20 percent of the land within 200 feet of it, requires a three-fourths vote of the entire governing body for the change to pass. The Legislature narrowed this in 2025 for changes that increase residential development, but left it fully intact for industrial rezonings, which is what a data center requires.
Can a Texas city stop a data center outside its city limits?
Not through zoning, which generally stops at the corporate limits. But most data centers need water, wastewater, and often reclaimed water service, and cities control those decisions. One Texas city denied a preliminary service agreement for a proposed data center months before it adopted any zoning restriction. Utility service is frequently the real chokepoint, and it operates where zoning authority does not.