San Marcos Becomes First Texas City to Ban Data Centers, Setting Up a State Preemption Fight

Policy & Markets Regulatory State & Local Regulation
Marin Holt
June 30, 2026
0
216
5 minutes read

Council vote: 4-3
First Texas city to ban data centers: First
Vote date: June 16, 2026
Planned Texas data centers: 248
Texas home-rule cities: 352

Listen to this article

The San Marcos City Council voted 4-3 on June 16, 2026 to prohibit data centers across the entire city, making the Central Texas college town the first Texas city to ban the facilities outright. The council rewrote its land development code to define data centers and make them ineligible for every zoning district, citing the electricity and water that large data centers pull from the local community. The vote sets up a direct test of how far Texas home-rule cities go in blocking development the state wants to encourage.

What Changed

Before the vote, San Marcos had no zoning language that named data centers, leaving them to be permitted like other industrial uses. The revised code now defines the facilities and removes them from every district, closing the door on new construction inside city limits. Council members pointed to the strain that concentrated computing loads place on local power and water supply, a concern echoed across Texas as roughly 248 data centers move through planning statewide, nearly half of them in unincorporated areas beyond any city’s zoning reach.

Critical Perspective

San Marcos banned data centers on a 4-3 council vote, yet the ordinance stops at the city line while close to 50% of the 248 facilities in Texas’s pipeline sit on unincorporated land no municipality can zone. Tucson, Arizona showed the softer version of this last year when its council rejected the water-hungry Project Blue data center outright, but Arizona never passed the kind of state preemption law Texas holds to overrule its cities. Texas built exactly that override: the 2023 ‘Death Star’ law, House Bill 2127, survived its constitutional challenge in Travis County and stayed in force, and Senator Paul Bettencourt has signaled he will turn it against San Marcos. If a single 4-3 vote is all it takes to start a preemption fight, how many of Texas’s 352 home-rule cities will actually spend years in court to defend a ban the legislature was built to erase?

Why It Matters

The outcome will shape the influence cities across the country hold as data center demand collides with local water and grid limits. If the San Marcos ordinance holds, other Texas municipalities gain a template for saying no; if the state overrides it, the fight shifts to whether counties, which govern the unincorporated land where most large facilities land, get any authority at all. Lockhart council member Taylor Burge summed up the stakes bluntly: every city is watching what happens to San Marcos.

Enforcement Reality

The ban runs straight into Texas laws written to curb this kind of local restriction. House Bill 2559, passed in 2025, bars cities from imposing open-ended moratoriums on property development, and the 2023 statute critics call the “Death Star” law blocks municipalities from enacting ordinances that conflict with state policy. State Senator Paul Bettencourt, a Houston Republican, has signaled he will contest the ordinance, arguing that cities should not use zoning to ban a use everywhere. With 352 Texas cities holding home-rule powers, San Marcos becomes the first test case for whether a citywide data center ban survives state preemption, and how fast Austin moves to strike it down.