Mayor Brandon Johnson and a group of City Council members introduced an ordinance on September 23, 2026, that would pause new data center development in Chicago for 12 months. The pause is meant to give city departments time to write permanent rules on electricity demand, water use, air emissions, and noise before more projects move forward.

Key Takeaways

• The proposed ordinance would impose a 12-month temporary pause on data center development in Chicago while the city finalizes new regulations.
• Chicago has approximately 39 data centers, most of them enterprise or colocation facilities in or near the central business district.
• Executive Order 2026-5, signed August 11, already requires enhanced review of data center planned developments, including a 60-day consultation among five city departments.
• A city task force must deliver draft data center regulations to the mayor by March 15, 2027.
• The City Council holds exclusive authority to enact a moratorium. The executive order could only request one.
• In June, Illinois Gov. JB Pritzker paused agreements under the state’s Data Center Investment Program.

The Ordinance Turns an August Request Into Legislation

The September ordinance is the second step in a process that began over the summer. On August 11, Mayor Brandon Johnson signed Executive Order 2026-5, which tightened oversight of data center development and called on the City Council to adopt a narrowly tailored, time-limited moratorium on new facilities and material expansions of existing ones.

The executive order could not create the moratorium on its own. It acknowledged that the City Council holds exclusive legislative authority over that decision. The ordinance introduced on September 23 puts a specific proposal before aldermen, with a 12-month duration. Alds. Maria Hadden (49th), who chairs the Committee on Environmental Protection and Energy, Lamont Robinson (4th), and Leni Manaa-Hoppenworth (48th) are listed as cosponsors.

In a statement released with the ordinance, Mayor Brandon Johnson said the city welcomes innovation and investment but that growth must protect the health, safety, and quality of life of Chicago residents. He described the city as “open for business” but “not for sale.”

Chicago’s Existing Rules Predate Modern Data Centers

The case for a pause rests on a finding from the city’s Sustainable Data Centers Working Group. The City Council created the group in 2024, and after 18 months of review it issued a final report in July 2026. The report concluded that Chicago’s regulations were written before modern data centers existed and do not adequately address their demands on the electrical grid, water supply, air quality, and surrounding neighborhoods.

That gap is increasingly practical. Newer facilities built for cloud computing and artificial intelligence draw far more power than the office-adjacent server rooms Chicago’s zoning code was written around. They also depend on diesel backup generators and large cooling systems, which create emissions and noise that existing permits were not designed to address.

The Executive Order Already Changed How Projects Are Reviewed

Even without a moratorium, the August executive order changed the approval process for data centers in Chicago. Under Executive Order 2026-5, the Department of Planning and Development must give enhanced review to every proposed planned development that includes a data center. That review covers projected electricity demand, water consumption, backup power generation, air emissions, noise, cumulative environmental impacts, and effects on nearby communities.

Four other departments are notified of each application: Buildings, Business Affairs and Consumer Protection, the Environment, and Water Management. Each has 60 days to recommend conditions, and the planning commissioner must include all of those conditions in the proposed ordinance sent to aldermen. The order also directs the city’s chief sustainability officer to issue new air permit and noise rules within 90 days. Those rules target generator emissions such as particulate matter, nitrogen oxides, and carbon monoxide.

One provision links the two policies directly. The enhanced planned development review in Section 3 of the executive order automatically rescinds if the City Council enacts a moratorium. The two measures are designed to work in sequence rather than overlap.

A 12-Month Pause Creates Timing Questions for Developers

The economic stakes for Chicago involve timing more than a yes-or-no decision on data centers. The city’s Interdepartmental Data Center Environment and Community Protection Task Force has until March 15, 2027, to deliver draft Municipal Code amendments and rules covering permitting, zoning, licensing, and reporting. Those rules would still need City Council approval, so a 12-month pause starting this fall would roughly match the time needed to draft and adopt permanent standards.

For developers, that year matters. Legal analysts at Greenberg Traurig noted after the August order that developers cannot underwrite projects to permanent standards that have not yet been written. They also flagged that the executive order left several points undefined: what counts as a “material expansion,” how exemptions would work, and how projects already in the pipeline would be treated. The ordinance’s final text will determine whether those gaps are closed. Aldermen are likely to focus on those definitions in committee.

The trade-offs are local. Data centers bring construction jobs and property tax revenue with relatively light demand on city services such as schools and transit. They also concentrate large loads on the regional electric grid, which feeds into the broader debate over utility costs for residential customers. A pause delays both sides of that equation. It holds off new tax base and construction activity in exchange for rules intended to set costs and conditions before the next wave of projects arrives.

Chicago Joins a Wider Regional and National Review

Chicago is not acting alone. In June, Gov. JB Pritzker paused agreements under the Illinois Data Center Investment Program, the state’s main incentive for such projects. In the western suburbs, the West Chicago City Council unanimously approved a 180-day moratorium on July 20 covering new data centers and battery energy storage systems in all zoning districts.

Beyond Illinois, Texas ordered audits of data center projects in the state’s grid interconnection queue in August. Virginia began a temporary per-kilowatt-hour tax on electricity used by certain data centers on July 1. Chicago also joined 40 other cities in June to launch the Global Urban Data Centers Pact, a shared commitment to cleaner energy and lower costs.

The Chicago ordinance now moves to committee. If aldermen approve a pause, the city will have about a year to show that its new framework can bring data center investment back under clearer rules than the ones it replaces.

FAQs

What does the Chicago data center moratorium ordinance do?

The ordinance proposes a 12-month temporary pause on data center development in Chicago. The pause would give city departments time to finalize permanent regulations on energy use, water consumption, emissions, and noise.

Is the Chicago data center moratorium in effect now?

No. The ordinance was introduced on September 23, 2026, and must be approved by the City Council. The City Council holds exclusive authority to enact a moratorium.

How many data centers are in Chicago?

Chicago has approximately 39 data centers. Most are enterprise or colocation facilities located in or near the central business district.

What is Chicago Executive Order 2026-5?

Executive Order 2026-5, signed August 11, 2026, requires enhanced city review of data center planned developments and new air and noise rules. It also created a task force to draft permanent regulations by March 15, 2027.

Has Illinois paused data center incentives?

Yes. In June 2026, Gov. JB Pritzker paused agreements under the Illinois Data Center Investment Program while the state develops a broader framework.