Gilroy Extends Moratorium on New Data Centers
The city council voted to halt new data center applications through September 2027 to address infrastructure and environmental concerns.
Updated on Oct. 27, 2026 in Data Centers
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Gilroy officials have extended a moratorium on new data center applications for an additional 10 months and 15 days. This decision prohibits the city from accepting or approving new data processing establishments as local leaders evaluate infrastructure impacts.
Why it matters
The extension allows the city to study how data centers affect electricity, water usage, noise levels, and generator emissions. This pause follows community concerns regarding the construction of an Amazon Web Services site in the area.
The city currently classifies data centers as data processing establishments under its zoning codes. This moratorium is enacted under California Government Code Section 65858 and does not impact the Amazon Web Services facility approved in 2025.
The players
Gilroy City Council
This local governing body is responsible for municipal zoning decisions and public policy for the city of Gilroy.
Amazon Web Services
This cloud computing subsidiary of Amazon is currently constructing a data center facility within the city of Gilroy.
Morgan Hill City Council
This municipal government body in a neighboring city recently implemented its own long-term moratorium on data center development.
The details
City staff are currently reviewing regulations from other California municipalities while preparing for a comprehensive zoning code update. Residents and local business owners will be invited to offer input during the upcoming planning review process.
Timeline
The Amazon Web Services data center was approved in 2025.
The initial 45-day moratorium was adopted on Sept. 14, 2026.
The council voted to extend the moratorium on Oct. 19, 2026.
The current moratorium extension expires on Sept. 3, 2027.
The Tech Race
The council invoked California Government Code Section 65858 to legally pause new development, a common regulatory tool used when infrastructure demands outpace local zoning policies. This move reflects a broader trend of California cities reassessing the utility requirements of data centers against community capacity.
Residents and business owners can participate in the upcoming zoning review process to voice concerns regarding noise, traffic, and resource consumption. The moratorium ensures no new applications will be processed, providing a period of stability for local infrastructure planning.
The takeaway
This moratorium provides the city with time to establish new regulations governing large-scale utility and resource usage. Residents should monitor future city council agendas to engage in the public outreach sessions scheduled for the zoning update process.
What happens next
The city will launch a comprehensive zoning code update in the coming months, which will include opportunities for public feedback from residents and local business stakeholders.
Further reading
Learn more about local infrastructure policy in the Data Centers section.
Source note: This article includes information reported by Gilroy Dispatch.
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