San Francisco Pauses New Data Center Approvals
The city enacts a 45-day moratorium to reassess grid and environmental impacts of high-energy computing facilities.
Updated on Oct. 21, 2026 in Data Centers
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San Francisco officials have imposed a 45-day moratorium on new data center approvals, directly impacting a bid by KG Growth Partners to convert the San Francisco Centre at 845 Market Street into a hardware facility. The temporary zoning freeze is intended to allow the city to study the energy and neighborhood effects of such developments.
Why it matters
Current data center building codes date back to 2001, failing to address the massive infrastructure demands of modern AI-driven computing. This legislative pause highlights the growing tension between urban redevelopment and the intense resource requirements of regional data facilities.
Data centers accounted for 4.4% of total U.S. electricity usage in 2023, a figure the Lawrence Berkeley National Laboratory projects could climb to 12% by 2028. This rapid scale-up has triggered local regulatory reviews regarding the sustainability of high-density energy facilities in urban centers.
The players
KG Growth Partners
A development firm currently bidding to repurpose a prominent downtown mall space into a hardware facility.
San Francisco Unified School District
The local educational authority that holds a 75,675-square-foot land lease under the San Francisco Centre through 2043.
Daniel Lurie
The Mayor of San Francisco who signed the interim zoning moratorium to study the impact of data centers.
Lawrence Berkeley National Laboratory
A Department of Energy national lab that provides research and projections on national energy consumption trends.
The details
Developers are attempting to brand the proposed site at 845 Market Street as a regenerative urban energy center, a strategy intended to minimize the perceived impact of hardware cooling and power load requirements. The city’s review will evaluate the physical demands these facilities place on the power grid and water infrastructure, a process initiated because existing zoning codes established in 2001 were not designed for modern high-performance computing clusters.
Timeline
2001: Original data center codes were written.
2023: Data centers consumed 4.4% of U.S. electricity.
July 2026: The Prado Group and Presidio Bay Ventures dropped their purchase of the site.
October 6, 2026: Supervisors approved the moratorium.
October 16, 2026: Mayor Daniel Lurie signed the interim zoning moratorium.
The Tech Race
This moratorium represents a shift from the static regulatory environment established by the 2001 data center codes toward active municipal oversight. As demand for specialized hardware facilities grows, San Francisco is setting a precedent for auditing the grid-level costs of urban AI expansion.
The 45-day moratorium halts new approvals for data facilities, potentially delaying the conversion of the city’s major downtown real estate. Residents and business owners near Market Street will see the site remain in its current state while officials study the long-term infrastructure consequences.
The takeaway
The city’s decision to pause approvals suggests that municipal zoning is struggling to keep pace with the power intensity of current data center designs. Stakeholders should track the findings of the 45-day moratorium review to understand how future projects at 845 Market Street may be restricted.
Further reading
For broader trends on infrastructure requirements, visit /tech/data-centers/.
Source note: This article includes information reported by Environment+Energy Leader.
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