Why a Moratorium Is the Blunt Instrument — and What the Municipalities Planning Code Already Offers

Why a Moratorium Is the Blunt Instrument — and What the Municipalities Planning Code Already Offers

Pennsylvania lawmakers are currently weighing three very different bills that would let municipalities pause data center development — proposals ranging from a modest 180-day local timeout to a mandatory three-year statewide freeze.  This article examines the pending legislation, why a statewide or even local moratorium is the wrong tool to allow municipalities time address data centers, and why the Pennsylvania Municipalities Planning Code’s existing curative amendment process already does the job better.      

From Factories to Server Farms:  A Familiar Pattern

A century ago, massive factories belched smoke and pollutants to manufacture iron, steel, and chemicals. Those facilities consumed enormous amounts of water, power, and natural resources, but they were integral to a booming economy. Today, large data centers consume water, electricity, and natural resources of their own, and raise concerns for neighbors and the larger community, ranging from noise, to emissions, to heat island effects. Like their factory predecessors, data centers have become the backbone of an economic transformation, as artificial intelligence, cloud computing, remote storage and digital streaming demand more computational power than ever before.

But where the old factories traditionally clustered along rivers and rail lines, data centers are being proposed for communities of every kind — industrial sites, greenfield parcels, and the edges of suburbia alike. When new land uses arise, municipalities scramble to address them in zoning ordinances while navigating competing objectives. One way to pause certain types of new and controversial development is by imposing a moratorium. That can be a blunt instrument.

While legislators around the country, including Pennsylvania, are considering moratoria on data centers, there is another, and better, option available under existing Pennsylvania law for most municipalities in the Commonwealth. While competing bills in Harrisburg offer municipalities a pause in their review of data center applications, Section 609.2 of the Municipalities Planning Code (“MPC”) already gives municipalities time to evaluate zoning ordinances and to update them to address new land uses. In short, the MPC already supplies a more measured tool that does the one thing a moratorium is supposed to do: buy a community time to fix the gaps in its zoning ordinance to appropriately address and provide for land uses.

States Reach for the Pause Button

Few land uses have become as contentious as quickly as data centers. They offer a municipality the promise of substantial private investment, new tax revenue, and a place in the digital economy. But the post-construction on-site jobs (or lack thereof), large physical presence in the community, noise, emissions, power and water concerns create controversy. Local officials, confronted with billion-dollar proposals and ordinances that never contemplated them, become caught between the opportunity for development and the objections of existing community members. And, particularly with a rapidly changing technology, local government officials may be considering zoning and land use approvals for infrastructure that they do not fully understand yet. When the rules have not caught up to the use, a natural instinct is to hit “pause”.

A recent example of this approach occurred in Maine. Its Legislature passed LD 307, which would have barred state and local permitting of data centers drawing twenty megawatts or more until November 2027 and created a council to study the industry’s effects on ratepayers, the power grid, and the environment. In substance it was effectively an eighteen-month statewide moratorium on many data center developments. Maine’s Governor Janet Mills vetoed it in April 2026, and the Legislature failed to override her veto. Notably, the veto did not rest on an objection to a pause, the Governor actually supported it, but the legislation did not exclude a particular project. Had LD 307 been drafted a bit differently, Maine would have frozen large-scale data center development across the entire state. Maine is not alone: lawmakers across the country have introduced data center moratorium bills of their own.

Why the Pennsylvania Fight Runs Through Harrisburg

Pennsylvania is now part of the same conversation, but its governing structure makes the question more complicated than it first appears. The Commonwealth is well-known for its large number of local governments. Many of these municipalities have their own zoning ordinances under the MPC. With the controversial nature of data centers, one would reasonably expect to find outright bans of data centers in municipalities across Pennsylvania.

However, outright bans of certain land uses at the municipal level in Pennsylvania are difficult. For decades, Pennsylvania courts have held that a municipality may not zone a lawful use out of existence. From Exton Quarries, Inc. v. Zoning Board of Adjustment, 228 A.2d 169 (Pa. 1967), to Appeal of Girsh, 263 A.2d 395 (Pa. 1970), to Fernley v. Board of Supervisors of Schuylkill Township, 502 A.2d 585 (Pa. 1985), the prevailing rule is that every legitimate use must be permitted somewhere in the community, and that a municipality which makes no realistic provision for a use invites a court to make that provision for it. Surrick v. Zoning Hearing Board of Upper Providence Township, 382 A.2d 105 (Pa. 1977). A community cannot simply declare that data centers are unwelcome and ban them outright.

A municipality also cannot buy time by freezing applications on its own initiative. In Naylor v. Township of Hellam, 764 A.2d 1155 (Pa. 2001), the Pennsylvania Supreme Court struck down a township’s one-year moratorium on new development, holding that the MPC does not grant municipalities freestanding power to suspend land use decisions. In other words, a Pennsylvania municipality cannot ban a lawful use nor declare a unilateral time-out on it. That is why the Pennsylvania data center moratorium debate has migrated to Harrisburg. If a data center pause is going to happen, the authority has to come from the General Assembly — either by banning the use directly or by granting municipalities a power they do not presently possess.

Moratorium Zoning Bills are Under Consideration in Pennsylvania

There are bills working their way through the General Assembly to address data centers. The House has already passed a series of data center measures addressing ratepayer protection, transparency, and water and energy disclosure, though those have stalled in the Senate. With its recent announcement of voluntary GRID (Governor’s Responsible Infrastructure Development) standards for data center developers to follow, the Shapiro Administration seems to have no appetite to ban data centers. On the zoning front, three pending bills speak directly to the moratorium question, and they differ sharply in their reach.

The most modest is House Bill 2496, introduced by Representative Paul Friel. It would add a new Section 607.1 to the MPC and allow a municipality, by resolution adopted at a public meeting, to pause processing new data center applications for up to 180 days while the municipality revises its ordinance. It asks little of the municipality beyond the resolution itself; there is no requirement that the community first declare its zoning ordinance to be deficient.

A bigger change to the status quo comes from Senate Bill 1345 and its House companion, House Bill 2533. These bills would add a new Section 622 to the MPC, which would permit a municipality, by ordinance, to impose an optional data center moratorium of up to 18 months — but only on “high impact” data centers. The bills define a “high impact” data center as one with a “critical IT load of 25 megawatts or higher”. The drafting in these bills is careful. A potential moratorium at the local level would require a public hearing and written findings of necessity and it would have to identify and make reasonable progress on specific study activities such as water, wastewater, grid, public-safety, and environmental assessments. Likewise, this approach could not disturb approvals already granted, the bills include a hardship-waiver process, and would require consultation with the county planning agency. A companion pair of bills, Senate Bill 1344 and House Bill 2532, would repeal Pennsylvania’s Computer Data Center Equipment Exemption Program and direct the revenue to the Motor License Fund to reduce the gas tax.

An even more expansive proposal is Senate Bill 1359, introduced by Senator Katie Muth, the “Statewide Hyperscale Data Center Moratorium Act”. It would impose a mandatory 36-month statewide moratorium on the development and permitting of hyperscale data centers, sweep in the power plants and transmission infrastructure built to serve them, and bar approvals regardless of when an application was filed. Despite the “hyperscale” label, the SB 1359 data center threshold reaches as low as one megawatt in territories served by smaller electric utilities.

Are These the Right Approaches to Address Data Center Development?

The three bills fall into two camps, and they are not equally defensible. Muth’s statewide ban is the hardest to justify, because it answers a question of development locations with a one-size-fits-all rule that bans the land use entirely. A data center that would strain one municipality’s water supply could be an ideal tenant for a brownfield two counties away with idle capacity and no neighbors to disturb. A three-year statewide freeze is a blunt instrument that equally places the sensible projects and the troubling ones on hold. An outright ban also forfeits the tax revenue and investment that come with them, and replaces thousands of local siting judgments with a single judgment made in Harrisburg. For a problem that is fundamentally about where a use belongs, a statewide prohibition has many problems.

The Coleman/Walsh and the Friel bills take a different approach and preserve more of the local decisional authority, leaving the substantive work of zoning where it has been delegated. But it is worth noting what these more locally-focused bills are actually trying to accomplish: they would hand municipalities a lawful, time-limited pause in which to study the use and rewrite a zoning ordinance to address data centers. That is something the MPC already provides.

Is the Better Tool to Address Data Center Zoning Already on the Books?

Section 609.2 of the MPC allows a municipality to declare, by formal action, that its own zoning ordinance is substantively invalid because it fails to provide for a lawful use, and then to take up to 180 days to enact a curative amendment correcting the deficiency. During that window, the municipality is not required to entertain competing curative amendments filed by landowners on the same question. This is the lawful version of the pause that Naylor said a municipality otherwise lacks — and it has long been part of the MPC. No new legislation is needed.

Three features make this the right instrument to deal with data centers. First, there is predictability. This process is already a part of Pennsylvania law. Nothing new is being created here to address a particular land use that does not apply to other land uses. Second, this keeps control local. The community that knows its own water supply, electric grid capacity, road network, and neighborhoods is the one that decides how to address data centers in that community.

Third, it does not run the land use out of town. The municipal curative amendment pause is a means to an end, and the end is a real ordinance. When the 180 day period under Section 609.2 of the MPC is up, the municipality has to provide for data centers somewhere appropriate, on terms that the municipality has had time to think through. That is entirely consistent with the line of cases that forbids exclusion. It forces a community to do the hard work of deciding where these facilities go and under what conditions, instead of deferring that decision indefinitely behind a moratorium.

Where Data Centers Actually Fit

Data centers are not right for every neighborhood, and no one should pretend otherwise. But, there are many places where data centers can be located that can serve an economic purpose and mitigate impacts on broader communities. These locations can be the legacy industrial areas that this discussion began with. Shuttered mill sites and aging brownfields often come with exactly what a data center needs: heavy electrical service, access to water, and developed infrastructure. For a municipality burdened with defunct industrial relics that have been off the tax rolls for decades, a data center operator can be a rare thing: a buyer willing to pay real money for the property, an infusion of tax revenue, and the impetus to clean up and repurpose a site that no one else has wanted for a generation.

A statewide moratorium would foreclose those deals along with everything else. The municipal curative amendment does the opposite. It uses an existing procedure under the law that gives a community the breathing room to write rules that channel data centers toward the places they belong, which are often the same industrial sites where the last economic transformation left its mark. The century-old factory and the modern data center are two chapters of the same story. Pennsylvania does not need Harrisburg to freeze the next chapter or to single out particular industries for different treatment than other uses. Rather, Pennsylvania needs to let its municipalities write ordinances — deliberately, locally, and within the framework the MPC already provides in order to provide certainty for property owners and developers who want to create and preserve things of value and economic opportunities.

Houston Harbaugh’s Renewable Energy, Zoning and Land Use practice assists property owners, developers, and other clients with zoning and land use matters across Pennsylvania. If you have a question about a zoning ordinance, a proposed data center development, or a land use issue affecting your property, contact attorney Brendan A. O’Donnell at 412-288-2226 or odonnellba@hh-law.com.This post is for informational purposes only and is not intended to, nor should it be relied on, to provide legal advice.