San Jose has released its first draft of uniform standards for large data centers, proposing rules that would force the power-hungry facilities to install built-in sound barriers, use downward-pointing shielded lighting, and notify nearby residents before breaking ground. The draft comes as the city tracks a dozen pending applications for projects requiring at least 20 megawatts of power, and as neighbors in South San Jose have spent weeks complaining about a persistent hum and glare from facilities already operating near their homes.
The proposal, covering large data centers and other technology facilities with major electricity and water demand, was detailed by The Mercury News. Under the draft rules, data-center developers would need to notify residents within 1,500 feet of a proposed site before it moves forward. Covered facilities would also face annual city checks of their power, water and sewer usage, according to the same report.
Clean Power and Water Limits for the Biggest Facilities
The strictest requirements would apply to data centers drawing 20 megawatts or more, the threshold the city already uses to flag large energy-use projects. Those facilities would be required to run on 100% clean power and would be barred from using drinking water in open cooling systems, per the Mercury News report. Backup generator testing at those same large facilities would be capped at 25 hours per year, with the proposed rules also including generator limits and broader environmental monitoring.
City officials say the standards are meant to address energy, water, air quality, backup generators and other environmental impacts tied to the facilities, according to the Mercury News account. Data-center companies would also be required to comply with state prevailing-wage and skilled-and-trained-workforce requirements under the draft.
Mayor Says City Found a Middle Path
Mayor Matt Mahan and Councilmembers Pamela Campos, David Cohen, Peter Ortiz and Domingo Candelas have proposed expanding and formalizing the city's existing approach to data centers and other large-load projects, according to a statement from the Office of Mayor Matt Mahan. The proposed standards would evaluate building appearance, visual impacts, green roofs, solar panels and compatibility with surrounding neighborhoods and land uses, the mayor's office said.
Mahan has framed the approach as neither unrestricted development nor an outright prohibition. He said San Jose is pursuing tailored regulations rather than a data-center ban, and described the city as having found a middle path between unfettered capitalism and banning change, per the Mercury News report. He added that San Jose has an opportunity and responsibility to regulate technological change for people, and said the process will continue through at least three large public meetings over two months.
Noise Complaints Pushed the Issue Into the Open
The push for tighter standards follows months of friction in South San Jose, where residents told Mahan that nearby data centers create a low, constant hum and bright lights shining into their backyards, according to NBC Bay Area. Neighbors said the noise can get even louder when temperatures rise last month, and Mahan went to the neighborhood in person to hear the noise for himself. He told the station he would work with data centers to address the complaints, suggesting, Maybe they can put some insulation or shielding around the fans.
City planning official Manuel Pineda said public input raised concerns about noise and sewer impacts, and that the city is establishing robust monitoring programs to address emerging issues, according to the Mercury News report. Public feedback shaped the proposed rules, the report noted, reflecting the same complaints Mahan heard directly from residents.
Money, Timeline and What Happens to Projects Already in the Pipeline
San Jose is considering developer fees to fund affordable housing and strengthen the power grid, and plans to ensure tax revenue from equipment sales remains in the city, per the Mercury News account. The city expects each data center to generate between $3 million and $7 million annually, a projection that lands against a backdrop of strained finances: San Jose had a $50 million shortfall this year and projects multimillion-dollar deficits over the next two years. The mayor's office separately said the city will evaluate options for reinvesting data-center tax revenue in communities surrounding project sites, and that potential investments could include funding for affordable housing, workforce development, and improvements to parks and other public spaces.
The draft standards still have to clear several steps before taking effect. A community forum on the proposal is set for Thursday, October 15, from 6 to 8 p.m. at San Jose City Hall council chambers and via Zoom, where residents can weigh in on the draft. City staff are expected to present final draft standards and accompanying ordinances to the Planning Commission on November 18, with the proposal expected to reach the City Council on December 8 and a second, final council vote scheduled for December 15. Once adopted, the city would also review projects already in its development pipeline to assess whether they meet the new standards, the mayor's office said — a step that follows a June memorandum in which the Rules and Open Government Committee directed the City Manager to bring forward uniform standards and best practices.
A Statewide Reckoning Over Data Centers
San Jose's draft arrives amid a broader state push on the issue. Gov. Gavin Newsom signed seven bills concerning data-center impacts, with measures aimed at protecting electric customers from paying for data-center grid upgrades, requiring transparency on water usage, and curbing environmental exemptions for the facilities, according to the Office of Gov. Gavin Newsom. Depending on the size of a data center's backup power generators, environmental review may fall to the California Energy Commission, per the City of San José.
The stakes extend beyond any single neighborhood. Data centers have sparked protests nationally over how the infrastructure underpinning artificial intelligence might stress power grids and local water systems, according to The Verge, which also reported that hyperscale facilities are increasingly moving away from affluent urban areas into more rural ones as AI drives their expansion. In early 2026, data centers accounted for about 1,000 megawatts, or 2 percent of California ISO peak electricity demand, according to the California Energy Commission's planning forecast.
