San Marcos becomes first Texas city to ban data centers, testing local control
San Marcos, Texas, has become the first city in the state to ban new data centers through zoning laws, testing how much local control municipalities have over large-scale industrial development. The move comes amid growing concerns over energy and water usage by data centers across Texas.
Background
- Data centers are massive facilities of computer servers powering cloud computing and AI. They consume huge amounts of electricity and water (for cooling), straining local grids and water supplies.
- San Marcos is a fast-growing Central Texas city (home to Texas State University) between Austin and San Antonio, both major data center hubs.
- In June 2026, San Marcos became the first Texas city to ban new data centers via zoning law — a test of local control vs. state authority. Texas has historically given data centers tax breaks and fast permits.
- The ban reflects concerns about grid reliability (Texas has its own grid, ERCOT), water use in a drought region, and few local jobs compared to resource consumption.
- State lawmakers have proposed bills limiting cities' ability to restrict data centers. San Marcos' move makes it a test case for how much land-use control cities retain.