Houston passes two-year pause on data centers as state weighs AIDEA land transfer

The Houston City Council voted unanimously Thursday to stop data center permits within city limits for two years. The ordinance bars the city from accepting, processing, approving or issuing data center permits. It also halts the construction, establishment and operation of data centers for that period. It carries enforcement and penalty provisions and an expiration date.

Council members said the pause gives Houston time to write planning and zoning rules before any data center proposal can move forward. No one from the public spoke at the hearing on the measure.

Councilmember Lisa Johansen wrote most of the ordinance. "I brought forth an ordinance to ban data centers in the city of Houston," Johansen said. She said Council Members Dan Lewis and Jeff Brasel specifically had concerns about that version. "So I think we came to a happy medium," she said.

Deputy Mayor Brasel said his part was to "modify it a little bit into being temporary." He said the change "gives us an opportunity to get our renewed planning and zoning folks on track with plenty of time to make that happen." Councilmember Kent Mitchell called it "a great compromise to a good idea."

A separate state decision is pending on land near the city. The Department of Natural Resources proposes to give nearly 20,000 acres of state land about two miles north of Houston to the Alaska Industrial Development and Export Authority at no cost, as Alaska News has reported. In a letter to the natural resources commissioner, the Alaska State Senate Resources Committee said the land would go to a multi-use industrial and energy development district whose most prominent feature is a hyperscale data center. The committee argued the transfer does not meet the state's public purpose requirement. At a joint meeting of the Senate and House Resources committees Thursday, legislative attorneys said the transfer may fail that test while the authority's executive director said state law already settles it, and Senate Resources Chair Cathy Giessel said the governor had denied the natural resources commissioner's attendance.

Describing that hearing to the council, Senator George Rauscher said the authority would keep data centers among the possible uses for the land, even as its officials kept saying no data center was planned. Rauscher said "that just tells me the whole land trade is going to happen." He said the authority's officials also told legislators that Houston's government has a big say in what happens inside the city.

Representative Kevin McCabe said the department, not the authority, makes the decision. "I'm not convinced, like Senator Rauscher is, that it's going to happen," McCabe said. "I think there's lots and lots of pressure on DNR."

Rauscher said he believed a Senate meeting on the issue was moved to Oct. 26.