Data Center Ban OKd In East Bay: Report

CONTRA COSTA COUNTY, CA — Local leaders put the brakes on one of the fastest-growing pieces of the artificial intelligence economy, approving a temporary ban on data centers that could reshape how East Contra Costa County handles the industry.

The Oakley City Council voted Tuesday unanimously to impose a 45-day moratorium that blocks the city from accepting, processing, or approving any land use applications tied to data centers, according to reports.

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The move makes Oakley the first Bay Area city to take such action, even as neighboring tech hubs continue to absorb the massive energy demands of AI-driven infrastructure.

City officials framed the pause as a necessary reset, the East Bay Times reported. Staff will use the window to study how data centers affect electricity and water systems, gather public input, and draft zoning rules that define where — and if — the facilities belong.

Oakley’s municipal code currently does include data centers — rules do not define, classify, or regulate data centers. The city's code doesn’t list “data centers” as a permitted, conditional, or prohibited use in any zoning district, leaving decision-makers without a framework as development proposals begin to surface.

That means staff and decision-makers would have to turn to other, similar categories, such as warehouses or light industrial, which would create inconsistency and could be inadequate for energy- and water-intensive centers.

City Attorney Derek Cole warned that without clear standards, officials would be forced to evaluate projects on a case-by-case basis, the East Bay Times reported.

The council will hear an additional extension in May. The temporary moratorium can be extended twice, according to Cole. The council will consider the first extension of the pause – an additional 10 months and 15 days – in May, the Contra Costa Times reported. The council can extend the pause twice.

Councilmembers voted 5-0 in favor of the urgency ordinance, which would create a joint meeting with the council and the planning commission.

Councilmember Shannon Shaw pushed for the urgency, saying the moratorium marks the first step toward a workable policy, the East Bay Times reported.

“I want this to be as strong as possible. I do not want data centers to come in. I don’t want anything to happen where we don’t end up with a quorum. I want to take every possibility of this slipping through the cracks,” Shaw said, the Contra Costa Times reported.

Mayor Hugh Henderson set a clear deadline, calling for finalized zoning rules before the end of the calendar year, according to reports.

The vote follows weeks of tension tied to the Bridgehead Industrial Project on Oakley’s northwest side, the East Bay Times reported. The development initially included data centers, but the developer pulled that component at the last minute in March after residents raised alarms about environmental and health impacts, including strain on power and water systems.

Across California, more than 280 data centers already operate, according to industry data. The San Francisco Bay Area alone has 160 data centers, most of which are concentrated in Santa Clara and San Jose. Silicon Valley is the third-largest data center market in the US. Key players include Digital Realty, Equinix, CoreSite, and Vantage, according to Datacenters.com.

According to Baxtel, the San Francisco Bay Area is the 9th-largest market in the United States and the 9th-largest in the Americas. There are currently 9 data centers under construction in the San Francisco Bay Area.