New York Becomes First US State to Impose a Data Centre Construction Moratorium, Freezing $10B Pipeline
Bisnow · 14 July 2026
TL;DR
New York Governor Kathy Hochul has signed an executive order imposing a one-year moratorium on new data centre construction — the first statewide ban of its kind in the United States. The freeze applies to facilities with a capacity of at least 50 megawatts and halts an estimated $10B development pipeline. The order directs the Department of Public Service to establish a working group within 60 days to study grid interconnection impacts, while Empire State Development must produce a community investment framework guiding localities in negotiating benefits such as infrastructure upgrades, childcare funding, and direct financial support. Hochul is also pursuing legislation to repeal sales tax exemptions for data centres. The moratorium may be lifted early if the regulatory review concludes ahead of schedule.
Our take
While this story originates in New York, it carries meaningful signals for South Africa's fast-growing data centre sector — and for the property investors, developers, and municipalities eyeing large-scale digital infrastructure as a new asset class. South Africa is actively courting hyperscale operators, with major campuses announced in Johannesburg, Cape Town, and along the Eastern Cape coast. Local municipalities and provincial governments have been competing on incentives — rates rebates, bulk infrastructure support, and streamlined approvals — without yet establishing clear frameworks for community benefit or grid impact assessment. New York's moratorium illustrates what happens when rapid data centre growth outpaces energy planning: consumer electricity costs rise, grid queues balloon, and political backlash follows. Eskom's constrained grid makes South Africa even more exposed to this risk. For SA commercial property developers and investors, the lesson is practical: projects that proactively address energy self-sufficiency (solar, battery storage, wheeling agreements), community benefit commitments, and labour standards are better positioned to survive regulatory scrutiny — and to attract anchor tenants who need long-term certainty. Getting ahead of regulation is cheaper than being caught by it.