San Marcos has approved what appears to be Texas’ first citywide data center ban through a zoning amendment. The ordinance, approved in a 4-3 City Council vote on June 16, 2026, prohibits new data centers within city limits and could influence how other Texas municipalities regulate similar facilities.
Key Takeaways
- San Marcos became the first Texas city to prohibit data centers through its zoning code.
- The San Marcos City Council approved the amendment in a 4-3 vote
- The ordinance makes data centers an ineligible land use throughout the city.
- City officials cited concerns about water use, electricity demand, and infrastructure capacity.
San Marcos approved a zoning amendment that prohibits future data center development anywhere within city limits. The action makes data centers an ineligible land use under the city’s land development code.
A Citywide Zoning Prohibition
The San Marcos City Council voted 4-3 on June 16, 2026, to amend local zoning rules by defining data centers as a prohibited land use. The ordinance does not create a temporary pause or moratorium. Instead, it changes the city’s zoning code to prevent new data centers from being built within municipal boundaries.
City officials said the action followed concerns raised by residents about the potential effect of large-scale computing facilities on local water supplies, electricity infrastructure, and long-term land-use planning.
San Marcos currently has no approved data center projects within city limits. However, proposed facilities in nearby unincorporated areas of Hays County helped prompt local discussion about how similar developments could affect the city in the future.
Texas communities have increasingly examined how technology infrastructure affects resource planning, including concerns about data center water sourcing as cooling demand grows across the state.
Why Did San Marcos Ban Data Centers?
San Marcos based the ordinance on infrastructure concerns rather than an active data center project inside the city.
Water, Power, and Local Capacity
Public discussion intensified after a proposed 200-acre development outside city limits raised questions about projected water consumption and electricity demand. Earlier in 2026, residents attended multiple City Council meetings to speak about whether similar facilities should be allowed in or near the community.
The debate also involved a proposal by Highlander SM One LLC, a Fort Worth-based developer seeking annexation into the city. The council ultimately rejected that annexation request.
Council member Amanda Rodriguez first introduced a proposal to prohibit data centers in March 2026. Although the measure initially failed, it later returned for reconsideration after Council member Lorenzo Gonzalez requested another vote. Council member Alyssa Garza seconded the motion, allowing the proposal to move forward.
During the final council meeting, Gonzalez said the expected economic benefits remained uncertain while community concerns had not been fully addressed. Garza said the zoning amendment would give the city a clear policy for evaluating future proposals.
How Could the San Marcos Ordinance Be Challenged?
San Marcos may face legal scrutiny because state officials and local governments continue to debate how municipal zoning authority applies to data center restrictions.
State Law Questions
State Sen. Paul Bettencourt has argued that the city’s action could conflict with House Bill 2559, enacted in 2025, and with the 2023 state law commonly referred to as the “Death Star Law,” which limits certain local regulations that conflict with state law.
Land-use experts have distinguished the San Marcos ordinance from a development moratorium because the city permanently amended its zoning code instead of temporarily suspending development approvals. They have also noted that home-rule cities generally have broader zoning authority than counties, although courts have not fully addressed how recent state laws interact with those local powers.
City officials have maintained that the ordinance is a lawful exercise of San Marcos’ home-rule authority and zoning responsibilities.
How Are Other Texas Communities Responding?
San Marcos has become a reference point for municipalities evaluating how to regulate future data center projects.
Different Local Approaches
Several Texas communities have considered restrictions but have taken different approaches based on the authority available to them. Earlier in June, Hill County withdrew a proposed moratorium after legal action from a developer. Hood County also reconsidered a similar proposal after questions were raised about county authority.
Other cities have chosen to limit where data centers may be built instead of banning them outright. Lockhart amended its zoning code to confine data centers to heavy industrial districts, while Kerrville adopted additional zoning requirements and water-related review standards for future proposals.
Communities without zoning authority have generally relied on nonbinding resolutions expressing opposition to future data center development.
The debate also overlaps with broader infrastructure planning as Texas responds to rising power demand. Recent attention on Texas Energy Fund projects shows how electricity demand continues to shape state and local planning decisions.
What Could the Decision Mean for Future Development?
San Marcos has established the first citywide zoning prohibition on data centers in Texas, but the long-term impact will depend on whether the ordinance is challenged in court and how state law is interpreted.
Limits of the Ordinance
The ordinance does not affect projects outside city limits, including developments proposed in unincorporated Hays County. It applies only to land uses within San Marcos through the city’s zoning regulations.
Municipal officials in other Texas communities have indicated they are following the San Marcos decision as they evaluate their own planning tools for future data center proposals.
Whether additional cities pursue similar ordinances may depend on future court decisions, legislative action, and local planning priorities.
Frequently Asked Questions
Why did San Marcos ban data centers?
City officials cited concerns about potential impacts on water resources, electricity infrastructure, and long-term land-use planning. The decision followed months of public meetings and community discussion.
Does the ordinance affect projects outside San Marcos?
No. The zoning amendment applies only within San Marcos city limits. It does not regulate developments proposed in unincorporated areas of Hays County.
Why are other Texas cities watching San Marcos?
Other municipalities are considering how to regulate future data center development. Because San Marcos is the first Texas city to adopt a citywide zoning prohibition, its ordinance may influence how other local governments approach similar land-use decisions.
