Cities and towns in Michigan continue to grapple with data center developments and pressures from public opposition, infrastructure needs and the potential economic benefits.
A new guide from University of Michigan researchers may help local leaders make decisions about what’s best for their communities. It's called: What Michigan Local Governments Should Know About Data Centers.
Sarah Mills is one of the co-authors of the publication. She says municipalities should be proactive about planning for future proposals because if it's not data centers, it's going to be something else due the state's needs for new economic development.
"Right now, the industry of interest is data centers. A couple of years ago, it was battery manufacturing facilities. And all of these land uses, communities have just reacted to, and that's never a good idea. Your gut reactions are not usually the best ones" she said. "If their zoning ordinance doesn't already mention data centers, that's one of the first things that they need to think about."
Mills says it's been decades since there has been a major push in Michigan to update zoning laws for widespread industrial development in the state, which means zoning considerations may now be out of date.
"We've had neighborhoods develop around our industrial zones. And so, it may make sense to say, 'Hey, once upon a time, this was an isolated industrial district, now it's not, and we do care about how noisy it is on the periphery of that industrial zone.'"
Michigan's Zoning Law
Many Michiganders have had extremely negative reactions to data center proposals and have asked their elected leaders to outright ban the industry from their communities. Mills says because of state law, it's not that simple.
Michigan's Zoning Enabling Act says local governments cannot make ordinances or decisions that "have the effect of totally prohibiting the establishment of a land use within a local unit of government in the presence of a demonstrated need for that land use within either that local unit of government or the surrounding area within the state."
"It is true the law says you can't ban a lawful land use for which there is a need, and the law also allows you to constrain the impacts that those land uses have in your community and determine also where within your community it makes the most sense," Mills explained.
That could mean creating standards for noise and light pollution or creating wide boundaries for an industrial district that don't cross into residential areas.
"Local governments can try to balance these two things ... how much space they allow and what standards they apply."
Some communities are enacting moratoriums on development to allow them to catch up on their zoning codes. A bipartisan group of state lawmakers have proposed a statewide pause on data centers for similar reasons, but the package is unlikely to become law because Governor Gretchen Whitmer has said she would not support that kind of measure.
Where the state can step in
Mills says while it is important that local governments maintain control over their zoning, there are other areas under the state's purview.
"There are state level regulations associated, for example, with water use or with electricity prices, for example," she said." These are things that are regulated at the state level, and I think that there could well be opportunities for the state to be more explicit about how it is treating data centers."
She says that includes ensuring developers will be the ones responsible for the costs of projects, whether they succeed or fail.
"If something has been started to be built, making sure that you can reclaim that site in the future, we don't have more brownfields," she said.
"The Public Service Commission is thinking about what's called stranded assets. ... The data centers say that we need to build more electricity, how do [make sure] they're paying for that, rather than us paying for it?"
Michiganders are set to elect a new governor this year as well as vote on who will represent locally at the state Legislature. Many candidates have already begun to make their stance known on data centers which could lead to change in policy further down the line depending on how voters make their voices heard.
Interview Highlights
On how she hopes local governments use the guide
What we hoped to do with the guide is help them understand what is true and false and provide information on the impacts of a data center, positive and negative, to the best of our ability right now. And then also, the second half of the guide provides a couple of considerations that local governments can take into account as they are looking particularly at their zoning ordinance.
On what Michigan's zoning law says about banning land uses, like a data center
It effectively says that local zoning, and I'm quoting here, "shall not have the effect of totally prohibiting the establishment of a land use." There's a couple of exceptions, but they're pretty rare. On the other hand, it doesn't need to be a free for all for all land uses. Again, thinking what that element of the Zoning Enabling Act means is that you've got to figure out a space for everything, but you can apply standards.
On state versus local control in regulations and zoning
There's pros and cons of the state regulating things versus local governments regulating things. So, already there are state level regulations associated, for example, with water use or with electricity prices, for example. These are things that are regulated at the state level, and I think that there could well be opportunities for the state to be more explicit about how it is treating data centers, and those are areas that are historically in state government purview. On the other hand, generally speaking, where land uses are allowed to go and where they fit into the community is why we have zoning. And typically, the sense from many local governments is that local governments are best placed to determine where within their community different kinds of land uses fit.
Interview Transcript
Sophia Saliby: Cities and towns in Michigan continue to grapple with data center developments and pressures from public opposition, infrastructure needs and the potential economic benefits.
A new guide from University of Michigan researchers may help these local leaders make decisions about what’s best for their communities.
Sarah Mills is one of the co-authors of the publication, and she joins me now. Thank you for being here.
Sarah Mills: Thanks for having me.
Saliby: How do you think local governments should use this guide that you've created?
Mills: What we hoped to do with the guide is help them understand what is true and false and provide information on the impacts of a data center, positive and negative, to the best of our ability right now.
And then also, the second half of the guide provides a couple of considerations that local governments can take into account as they are looking particularly at their zoning ordinance.
Saliby: What do you think people, residents, citizens might not understand about a local government's role in regulating data center developments?
Since I think I've seen a lot of communities that once one is announced or proposed, people immediately have a very strong reaction.
Mills: Well, I think what they should know is that most of the local control associated with a data center comes through the zoning ordinance, and local governments have set procedures that are set at the state level about how they need to take up new land uses in the context of their zoning ordinance.
So, the local government is going to have to go through those procedures that are outlined in the Zoning Enabling Act, both to potentially amend their zoning ordinance to think about this new land use, if their zoning ordinance doesn't already mention data centers, that's one of the first things that they need to think about.
But then any data center development actual proposal that might come in the future would go through a separate process of evaluating that application.
Saliby: Would it make things easier for the state to step in and have more regulations on these things, or is it better to keep that local control over zoning?
Mills: Oh, that's a really good question. There's pros and cons of the state regulating things versus local governments regulating things. So, already there are state level regulations associated, for example, with water use or with electricity prices, for example. These are things that are regulated at the state level, and I think that there could well be opportunities for the state to be more explicit about how it is treating data centers, and those are areas that are historically in state government purview.
On the other hand, generally speaking, where land uses are allowed to go and where they fit into the community is why we have zoning. And typically, the sense from many local governments is that local governments are best placed to determine where within their community different kinds of land uses fit. Now, one of the things that's really important is that those decisions about where, for example, industrial uses go, I would say a data center is an industrial use, that zoning is supposed to be based on a community plan. And in that community plan, we think about what are our land use needs and goals for the future? Where might there be places where land uses are incompatible with each other?
So typically, industry is the thing that is louder, that might be smelly, and so we put a lot of industries together in kind of industrial zones. And so, looking to the community's plan about where we're anticipating industry, and then adopting and then modifying our zoning to kind of match that plan is how communities can best be prepared for thinking about data centers or any other industry for that matter.
Saliby: I want to ask you about something I've heard, which is that a city or town can't outright ban data centers as a land use in zoning.
But I've also heard there can be gray areas for communities that might be completely opposed to any kind of development. Is that a thing that you've seen?
Mills: That is right. What you're hearing is directly from the Michigan Zoning Enabling Act. It effectively says that local zoning, and I'm quoting here, "shall not have the effect of totally prohibiting the establishment of a land use." There's a couple of exceptions, but they're pretty rare. On the other hand, it doesn't need to be a free for all for all land uses. Again, thinking what that element of the Zoning Enabling Act means is that you've got to figure out a space for everything, but you can apply standards.
And one of the things our guide talks about is thinking about quality of life standards. So noise, for example, you can say, here is the place where data centers are allowed, but we're concerned about the noise or the light pollution that might come off of this industrial facility, and so we are going to set standards that limit the sound going beyond the property boundaries of kind of the industrial district.
So, it is true the law says you can't ban a lawful land use for which there is a need, and the law also allows you to constrain the impacts that those land uses have in your community and determine also where within your community it makes the most sense.
Saliby: Sarah Mills is a University of Michigan researcher. Her guide: What Michigan Local Governments Should Know About Data Centers is available online now. Thank you for joining us.
Mills: Thanks for having me.
This conversation has been edited for clarity and conciseness.
