Virginia siting rules and local moratoriums for AI data centers

In short

Virginia has no statewide law that says where an AI data center can be built. Each county, city, and town controls siting through its own zoning ordinance, using powers granted by the state in Title 15.2 of the Virginia Code. Va. Code tit. 15.2, ch. 22. Local governments cannot impose a true moratorium, because Virginia law requires each application to be decided on its own facts, but since 2024 several large data center markets have restricted or eliminated by right approval, with Loudoun County requiring a special exception permit with public hearings for all AI data centers as of March 2025. Loudoun County statement, Loudoun County Data Center Standards, Fairfax County Data Centers amendment. At the state level, the General Assembly has proposed but not enacted a temporary moratorium or mandatory site assessments. The 2024 JLARC study recommended against a state role. The main legal pressure points are whether retroactive local rule changes violate a developer’s vested rights, and whether the state will eventually step in.

Who controls AI data center siting in Virginia?

Local governments control siting. They do it through zoning ordinances adopted under Title 15.2 of the Virginia Code. Virginia is a Dillon’s Rule state, which means local governments have only the powers the General Assembly expressly grants them. The zoning enabling act in Title 15.2 gives localities the power to divide land into districts and say what uses are allowed in each. Va. Code § 15.2-2280. There is no separate, statewide statute that specifically regulates where data centers may be built.

A locality’s zoning ordinance can allow a use by right. By right means the use is allowed automatically if the developer meets the ordinance’s dimensional and other standards, with no discretionary review. Or the ordinance can make a use a special exception. A special exception is a use that is not allowed by right but may be allowed if the governing body or zoning board grants a permit after a public hearing, and the applicant meets conditions the issuing body may impose. Va. Code § 15.2-2201, Va. Code § 15.2-2286, Va. Code § 15.2-2309. Most of the recent tightening by counties has moved AI data centers from the by right list to the special exception list.

Localities can also accept voluntary in-kind proffers from a developer as part of a conditional rezoning, if the proffers are reasonably related to the project, and certain high-growth and urban county executive form localities may also accept cash proffers. Va. Code § 15.2-2297, Va. Code § 15.2-2298, Va. Code § 15.2-2303.

Can a Virginia county enact an AI data center moratorium?

No. Virginia law does not allow a locality to impose a blanket refusal to accept or decide AI data center applications. In March 2024, Loudoun County formally stated that its Board of Supervisors has no legal authority to implement a moratorium. The county attorney’s office explained that the enabling statutes require each rezoning or special exception application to be decided on its individual merits. Loudoun County statement.

A county can still achieve a similar practical result by changing its zoning ordinance to eliminate AI data center development and require a special exception or special use permit for every project. When every new AI data center must go through a public hearing and meet stricter standards, the approval process can become so burdensome that few projects move forward quickly. Several counties have done exactly this since 2024.

The General Assembly, unlike a locality, can enact a temporary statewide moratorium. In the 2026 session, Delegate Shin introduced HB 1515, which would have prohibited localities from granting any final approval for a new data center until the earlier of two events, namely all pending interconnection requests for AI data centers are fulfilled, or July 1, 2028. HB 1515. The bill was continued to the next session in the House Rules Committee on a voice vote on February 6, 2026. It did not become law.

What has the General Assembly done about data center siting?

In December 2024, the Joint Legislative Audit and Review Commission (JLARC), the General Assembly’s nonpartisan research agency, issued a major report on data centers. The report concluded that there is not currently a compelling reason for the state to set local requirements for data centers or to intervene in local approval decisions. Instead, JLARC recommended that the state expressly give localities the authority to require water use estimates, sound modeling studies, and maximum allowable sound levels for data center projects. JLARC report.

That led to a series of bills. In 2025, HB 1601 and SB 1449 would have added a new statute requiring a locality to demand a site assessment before approving any rezoning, special exception, or special use permit for a high energy use facility (defined as 100 MW or more). The assessment would examine noise effects on nearby homes and schools, and the electric utility would have to submit a form about new generation and transmission. Both chambers passed the bill, but Governor Youngkin vetoed it, stating that it limited local discretion, created unnecessary red tape, and imposed a one size fits all approach. HB 1601 text and veto message.

In the 2026 session, more than 60 bills related to AI data centers were to be considered. MultiState, Virginia LIS, Virginia LIS, Virginia LIS. Three notable ones are as follows.

• HB 1515 (Shin), the temporary statewide moratorium described above. Continued to the next session.
• HB 511 (McAuliff), would require localities that already address AI data centers in their zoning codes to classify them as industrial uses, review their locations, adjust zoning maps, consider setbacks and building heights, and require commitments to mitigate residential impacts. It applies only if the locality’s zoning already addresses data centers or if the locality is revising its zoning ordinance to include data centers. It was incorporated into HB 153, which passed and was signed into law. HB 511.
• SB 552 (Sturtevant), would require a Department of Environmental Quality review of site assessments for large AI data centers (one megawatt or more of critical IT load), covering noise, light, water, air, traffic, and construction impacts. DEQ could impose civil penalties. The bill failed to report from the Local Government committee on a tie vote. SB 552.

So far, none of these have become law. Governor Spanberger, who took office in January 2026, has said that AI data centers need to pay for their own energy while giving local communities the information they need to make informed decisions. MultiState.

How are the biggest data center counties changing their rules?

A wave of local tightening began in 2024, driven by concerns about noise, energy demand, and residential encroachment. The five counties with the most significant changes are Loudoun, Fairfax, Prince William, and Henrico, along with a cluster of smaller counties.

Loudoun County, from by right to special exception for all AI data centers

Loudoun County hosts the largest concentration of AI data centers in the world. Nearly half of its property tax revenue comes from them, which has allowed a nearly 30 percent reduction in the residential property tax rate over the past decade. Loudoun County, Loudoun County. On February 6, 2024, the County Board initiated a project to review and update policies and standards for AI data center and electrical substation uses, and in March 2024 it formally declared it had no legal authority to impose a moratorium. Loudoun County statement and Loudoun AI data center standards page.

Phase 1 of the rewrite was adopted on March 18, 2025. It eliminated by right AI data center development throughout the county. From that date forward, every new AI data center must go through the special exception (SPEX) process, which includes public hearings before the Planning Commission and the Board of Supervisors. The amendment included a grandfathering provision, namely applications already under review as of February 12, 2025 and that are on parcels more than 500 feet from a residential area may proceed under the old rules, provided there are no substantial changes to the application. Zoning analysis.

Phase 2, now underway, will write use specific zoning standards for AI data centers, substations, microgrids, and generators. Loudoun’s Phase 2 timeline anticipates Board adoption around March 2027. Loudoun Phase 2 page.

Fairfax County, new setback, noise, and design requirements

Fairfax County adopted ZO 112.1-2024-9 on September 10, 2024, effective the next day. The ordinance did not eliminate by right AI data centers everywhere, but it imposed a set of new requirements that sharply constrain where they can go. Fairfax County AI data center page. Key rules include

• A 200 foot setback from any residential lot line for AI data center buildings, and a 300 foot setback for ground-level equipment unless it is fully screened.
• A one mile buffer from any Metrorail station entrance. An AI data center closer than one mile requires a special exception.
• Pre construction and post occupancy noise studies, plus a requirement that all operating equipment be fully enclosed or screened.
• Building design standards, including main entrance features and facade articulation every 150 feet with windows or similar openings. Size limits apply in lighter industrial districts.

Projects that submitted site plans before July 16, 2024 are grandfathered. The Plaza 500 data center in Bren Mar, a 461,444 square foot project, submitted its plan in February 2024 and qualifies under the prior rules. Rose Hill Coalition. As of early 2024, 4.4 million square feet of AI data centers were under construction in Fairfax, more than doubling the existing inventory.

Prince William County, dismantling the overlay district

Prince William County created the Data Center Opportunity Zone Overlay District (DCOZOD) in 2016 to promote AI data center development in areas with existing infrastructure. PWC Data Center Overlay FAQ, PWC Zoning Ordinance § 32-509.03. For years, a project outside the overlay could proceed without special approval, which attracted heavy investment. AI data center tax revenue increased nearly twenty six fold from 2012 to 2023, accounting for 74 percent of the county’s commercial assessed value growth in 2023. PWC TY2023 report.

Rising local opposition and the controversial approval of the PW Digital Gateway tech corridor rezoning, which went forward without a water-use study, prompted a re-evaluation. On March 3, 2026, the Board of Supervisors initiated a zoning text amendment (DPA2026-00006) to curtail by right development significantly. The proposed ZTA would eliminate by right approval for AI data centers on eligible parcels inside the overlay and require a Special Use Permit (SUP) for all AI data centers. It would also close the overlay to future expansion, limiting eligibility for remaining parcels to five specific pathways. PWC DCOZOD ZTA page and PWC DCOZOD ZTA page, PWC DCOZOD ZTA page . Supervisor Tom Gordy said the overlay has outlived its useful purpose. The final adoption date is uncertain as of this writing.

Henrico County, retroactive elimination of by right

Henrico County adopted its Data Center Comprehensive Plan Amendment on June 10, 2025. The amendment is striking because it applies retroactively. Stand alone AI data centers anywhere in the county now require a Provisional Use Permit (PUP), which means public hearings before the Planning Commission and the Board of Supervisors. The adopted rules did not include vesting provisions for unapproved data center proposals. AI data centers already approved, under construction, or in operation are not subject to the new rules. Henrico adopted rules, County explanation, Henrico adopted rules, News report.

Other requirements include

• A minimum 500 foot setback between AI data center buildings and any residentially zoned or residentially used property, plus a 100 foot vegetative buffer equivalent to Type B50 landscaping.
• Pre-construction and post-occupancy noise studies.
• Opaque fencing and landscaped buffers around substations.

Henrico had roughly 20,000 acres zoned for office, business, or industrial use where AI data centers were previously by right. The county hosts 37 AI data centers of varying sizes, including a Meta campus and QTS at White Oak Technology Park. Henrico County Planning Department. One developer, Centra Logistics, had spent more than $700,000 on a proposed 1 million square foot campus before the rule change. That project must now secure a PUP through public hearings.

Other counties, a patchwork of restrictions

Several smaller counties have also acted.

• Campbell County adopted an emergency ordinance on December 2, 2025, removing AI data centers from the by right list in heavy industrial zones and moving them to the special use permit list. Cardinal News. The Board later voted to delay permanent adoption for 120 days while a neighbor’s petition to review a zoning administrator’s determination was pending.
• York County adopted an AI data center ordinance on June 17, 2025, requiring applicants to submit letters from energy and water companies confirming they can handle the facility’s full capacity demand. If they cannot, the Board of Supervisors may reject the proposal. The ordinance also requires a sound study, setbacks, vegetative buffers, and five year energy use reporting. Virginia Mercury.
• Chesapeake City Council rejected an AI data center rezoning in June 2025 after environmental and disruption concerns. Virginia Mercury.
• Culpeper County approved the Red Ace Data Center campus, rezoning 69.19 acres from rural to light industrial. Tax alert.

How the rules compare across counties

What are the legal risks for a project caught by a retroactive rule change?

The Henrico County amendment, which applies to projects already in progress, raises a central legal question, namely whether a developer has a vested right to proceed under the rules that existed when it bought the land or started spending money? Virginia law provides some protection through the concept of vested rights, but the case law is unsettled for AI data centers.

Virginia Code § 15.2-2307 is the typical source for arguing that a project has vested. However, no Virginia appellate court has addressed how that law applies to AI data center projects that had not yet received a formal permit but had made significant expenditures. The Centra Logistics situation in Henrico, where the developer spent more than $700,000 before the rule change, now must secure a PUP as the county reviews vesting requests for some existing data center proposals. Richmond BizSense.

In Campbell County, the zoning administrator originally found that the MESH Capital plan met the old by right criteria, but a neighbor petitioned for review of that determination. That procedural fight highlights another risk, namely even when a local official says a project complies, neighbors can challenge that decision through an administrative appeal. Cardinal News.

Because the law on vesting is unsettled, developers in Virginia should assume that a locality can change the rules mid stream unless the developer already has a final, unappealable site plan or building permit.

Where is the pressure heading next?

Several pressures are building.

• Loudoun County’s Phase 2 will write detailed standards for noise, generators, and transmission infrastructure. Phase 2 will review and potentially revisit use-specific standards for AI data centers and utility substations, including noise, onsite power generation, and energy storage. Loudoun Phase 2 Data Center Standards page.
• Prince William County’s ZTA to end by right status inside the DCOZOD is under consideration, with a formal work session likely in the fall. InsideNoVa.
• The 2026 General Assembly session produced no enacted siting legislation, but the volume of bills and the close committee votes show that the push for state involvement is not going away. The moratorium bill (HB 1515) was continued rather than defeated, keeping it alive for 2027.
• Dominion Energy’s contracted AI data center capacity has grown to about 47 GW, nearly double what it was in mid 2024. Data Center Dynamics. That grid constraint gives moratorium advocates a concrete argument that the state should not approve more AI data centers until the power supply catches up.
• The Virginia AI data center sales and use tax exemption, currently the largest economic development incentive for the industry, expires in 2035. JLARC report. Any discussion of changing the tax treatment could further alter where and how projects get built.

Key takeaways

• Virginia has no statewide AI data center siting law. Each locality controls where AI data centers go through its zoning ordinance.
• Local governments cannot legally impose a moratorium, but they can and do make the approval process much harder by requiring a special exception or special use permit for every project.
• The General Assembly’s JLARC study recommended against state intervention in local siting decisions, but recommended giving localities more explicit tools for noise and water studies.
• The 2025 state bill requiring site assessments for large projects passed the legislature but was vetoed by the Governor. The 2026 session saw more than 60 AI data center bills, including a temporary moratorium, but none passed.
• The most restrictive local changes have come in Loudoun (by right eliminated, Phase 2 standards pending), Henrico (retroactive elimination of by right, no grandfathering), and Prince William (overlay district being dismantled). Fairfax added stringent dimensional rules.
• Retroactive rule changes raise unsettled vesting rights questions. A developer without a final approved site plan risks being caught.
• The trend is clearly toward more local restrictions, with pressure growing at the state level to address grid capacity and land use conflicts.

Frequently asked questions

Q:Does Virginia have a statewide AI data center siting law?

A:
No. Siting is controlled by each locality through its zoning ordinance under Title 15.2 of the Virginia Code. Va. Code tit. 15.2, ch. 22.

Q:Can a Virginia county enact a data center moratorium?

A:
A locality cannot impose a blanket moratorium because Virginia law requires each application to be decided on its own merits. The General Assembly could enact a temporary statewide moratorium, and a bill to do so (HB 1515) was continued to the next session in 2026. HB 1515.

Q:What is a special exception?

A:
A special exception is a use not permitted in a particular district except by a special use permit granted under the provisions of Chapter 22 of Title 15.2 and any zoning ordinances adopted under it. It is defined in Va. Code § 15.2-2201. Va. Code § 15.2-2201.

Q:What counties have eliminated by right AI data center development?

A:
As of mid-2026, Loudoun County, Henrico County (retroactively), and Campbell County (temporarily) have eliminated by right status. Prince William County is moving to eliminate it within its overlay district. Fairfax County has not fully eliminated it but imposed strict setbacks and a Metro station buffer that make by right development difficult in many areas.

Q:Can a locality apply new AI data center rules to a project already in the pipeline?

A:
It is legally unsettled. Henrico County’s 2025 amendment applies retroactively with no grandfathering. A developer may argue it has vested rights under Virginia law, but no appellate court has ruled on AI data center vesting. Developers should secure a final, unappealable site plan or building permit to reduce risk.

Q:What did the JLARC report recommend?

A:
The 2024 JLARC report on AI data centers found no compelling reason for the state to set local siting requirements or override local decisions. It recommended that the state give localities clear authority to require water-use estimates, sound-modeling studies, and maximum sound levels. JLARC.

Q:Did any 2026 state AI data center bills pass?

A:
No. More than 60 AI data center-related bills were filed. The moratorium bill (HB 1515) was carried over to 2027 and the DEQ site assessment bill (SB 552) failed, while the zoning standards bill (HB 511) was incorporated into HB 153, which passed and was signed into law. Virginia LIS, Virginia LIS, Virginia LIS

Q:What is the Dillon’s Rule and how does it affect AI data center siting?

A:
Virginia is a Dillon’s Rule state, meaning local governments have only the powers specifically granted by the General Assembly. The zoning power in Title 15.2 gives localities authority to regulate land use, but they cannot go beyond that grant. This is why a locality cannot impose a moratorium unless the state authorizes it. Local Government Autonomy and the Dillon Rule in Virginia.

Q:Does the state’s AI data center tax exemption affect siting?

A:
Not directly, but it influences where developers choose to build. The exemption under Va. Code § 58.1-3506 is a major incentive. It is scheduled to expire in 2035, and any change could alter the economics of building in Virginia. Va. Code § 58.1-609.3 and JLARC report.

Q:What should a developer do to protect its project?

A:
Monitor each locality’s zoning ordinances closely, especially as Phase 2 and overlay changes advance. Engage early with the planning department. If a locality is considering a rule change, get a complete site plan application on file before any cutoff date, because some counties have grandfathered projects submitted before a specific date. Be aware that retroactive changes are possible and that legal challenges based on vested rights are uncertain.

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Junde Liu, JD, LL.M. (Taxation) candidate at UF Law. Originally published on Compute Law Blog. This article is general information and does not constitute legal advice. Reading it does not create an attorney client relationship. The reader should not act on the basis of any content here without first consulting a licensed attorney in the relevant state. Last reviewed for accuracy May 23, 2026.