New York has enacted the first statewide data center moratorium in the U.S. after Gov. Kathy Hochul signed an executive order halting the issuance of new permits.
The executive order, which Hochul signed on Tuesday morning, directs the state’s Department of Environmental Conservation to pause the distribution of environmental permits on hyperscale data centers for up to one year.
While that freeze is underway, Hochul directed the state’s Department of Public Service to create a Generic Environmental Impact Statement for data centers, which aims to hold developing data centers to consistent standards, per the announcement.
As it stands, data centers that have received all necessary permits will not be stalled. The moratorium applies to projects that use 50 megawatts of power or more and still require permit approval from the DEC.
“As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” Hochul said in a news release detailing the order.
The moratorium is another step in the state government’s ongoing debate regarding what to do about data centers. The state’s legislature last month passed a wider-ranging bill that would apply to builds of 20 megawatts or more, but it has not yet been sent to Hochul’s desk, according to Reuters.
Builder reactions
Construction organizations decried the moratorium.
“It effectively slams the door on those projects, and that sends a hell of a message to people looking to make huge investments in New York that maybe they should look twice,” Mike Elmendorf, president and CEO of Associated General Contractors of New York State, told Construction Dive.
Carlo Scissura, president and CEO of the New York Building Congress, said the move will wreak economic havoc on New York.
“This data center moratorium will damage our state's economy, its workforce, and our competitive standing in the industries of tomorrow: plain and simple,” Sciccura said in a statement emailed to Construction Dive. “And our message is simple: A blanket moratorium is the wrong tool for a real-world problem that demands careful consideration.”
Elmendorf added that the moratorium puts his association’s members who have taken on data center work but not yet received permits in a tough spot.
“These are huge, complicated projects,” Elmendorf said. “Not only do you see that opportunity very likely disappearing, but these companies have passed up on pursuing other opportunities because they've been preparing to go build a data center. So it's very disappointing.”
Brian Sampson, president of the Empire State Chapter of Associated Builders and Contractors said the development puts his state at a competitive disadvantage.
"This moratorium is another missed opportunity for New York. Data centers create high-quality construction jobs, strengthen our economy, and attract the kind of long-term private investment every state should be competing for,” Sampson wrote in an email to Construction Dive. “Instead, New York has chosen to hit the pause button, sending yet another signal that businesses looking to invest and grow may be better off doing it somewhere else. That's the wrong message at the wrong time."
Data center projects have been the construction industry’s golden goose in 2026. Over the past year, these megaprojects have surged while most other areas of the construction industry have faltered. Outside of the data centers themselves, utility and specialty firms have also found success in creating related infrastructure for these megaprojects.
Community pushback
Although data centers have been a boon for the construction industry, communities across the country have fought fiercely against the hyperscaler surge in their backyards. Questions about the access to and price of power, clean drinking water and other community impacts have dominated debates.
“Technology should make our lives better, not pollute our water, strain our energy grid, or drive up our utility bills,” said New York State Sen. Kristen Gonzalez in Hochul’s news release.
Indeed, power access in New York has become a hot-button issue. The state’s aging power grid, along with already-strict environmental policies, has somewhat hindered the data center buildout in the state.
Hochul also ordered DPS to consider a mechanism to offset higher utility costs by making data centers pay for grid improvements, participate in demand response programs, support clean energy and establish an insurance pool that developers would contribute to.
That approach would echo actions some construction pros have already called for to head off the push for moratoriums. Earlier this year, panelists at the New York Build conference recommended that data center projects develop a community benefits plan to help assuage public pushback.
In a precursor to the reactions to today’s news, panelists then saw blanket moratoriums as potentially throwing the baby out with the bathwater.
“When you say no, the industry is going to move on,” said Rob LoBuono, principal at San Francisco-based design firm Gensler, during the panel. “We should be saying yes, but with the right requirements.”
