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Executive Order Summary
On Aug. 11, 2026, Chicago Mayor Brandon Johnson signed Executive Order No. 2026-5 (the order), directing city departments to take immediate steps to strengthen oversight of data center development and calling on the Chicago City Council to enact a temporary moratorium on new data centers and the material expansion of existing facilities. The order took effect immediately upon publication and imposes enhanced requirements for air pollution permits, noise control, and planned development review while the city develops a comprehensive regulatory framework.
The order follows an 18-month review by the city’s Sustainable Data Centers Working Group, established pursuant to City Council Ordinance SO2024-0008201. The working group issued its final report in July 2026, recommending that the city adopt a comprehensive policy framework to ensure that future data center development aligns with Chicago’s environmental, economic, infrastructure, and community priorities. Chicago currently has approximately 39 data centers, the majority of which are enterprise or colocation facilities located in or near the central business district. The city states that its existing regulations were adopted before the emergence of modern data centers and do not adequately address data centers’ demands on the electrical grid, water resources, air quality, public infrastructure, or surrounding communities.
Air Pollution Control and Noise Regulations
Per the requirements in the order, the city’s chief sustainability officer, who also serves as commissioner of the Department of Environment, must impose conditions on air pollution control permits for regulated equipment and areas at data centers, including conditions directed at emissions from diesel backup generators such as particulate matter, nitrogen oxides, and carbon monoxide. The chief sustainability officer must also review the city’s existing regulatory framework for noise emissions from mechanical stationary sources at data centers, including cooling equipment, diesel emergency generators, and other mechanical systems. Within 90 days of the order’s effective date, subject to extension by the mayor and following the applicable public notice process, the chief sustainability officer must publish rules governing data center air pollution control permits and rules for the administration and enforcement of the city’s noise provisions as applied to data centers. Certificates of operation must reflect compliance with the strengthened air pollution permit conditions.
Planned Development Review
The commissioner of the DPD must ensure that every proposed planned development that includes a data center receives enhanced review. In evaluating proposals, the DPD commissioner must specifically consider projected electricity demand, water consumption, emergency and backup power generation, air emissions, noise, cumulative environmental impacts, transportation impacts, emergency response capacity, and impacts on neighboring communities.
Upon receipt of a planned development application that includes a data center, the DPD commissioner must promptly notify the commissioners of Buildings, Business Affairs and Consumer Protection, the Environment, and Water Management. Each notified department must provide written recommendations within 60 days (or another period, as arranged with DPD) identifying conditions appropriate to protect public health, safety, affordability, the environment, and the general welfare. After consultation between the relevant departments, the DPD commissioner must include in any proposed planned development ordinance all conditions identified by the commissioners. Section 3 of the order automatically rescinds if the Chicago City Council enacts a moratorium on new or expanded data centers.
Task Force
The order establishes an Interdepartmental Data Center Environment and Community Protection Task Force, co-chaired by the chief sustainability officer and the mayor’s chief of policy. The task force includes representatives from the city’s Department of Buildings, Department of the Environment, Department of Planning and Development, Department of Technology and Innovation, and Department of Water Management.
The task force must evaluate and, where appropriate, implement the working group’s recommendations. It must also draft proposed amendments to the city’s Municipal Code and proposed rules governing data centers — including rules pertaining to departmental permitting, impact controls, licensing standards, zoning regulations, and reporting requirements. The task force must ensure its work incorporates input from Chicago residents, relevant subject matter experts, and stakeholders. Recommendations and draft regulatory language are due to the mayor on or before March 15, 2027, or another date that is approved by the mayor but is still consistent with the timing and duration of any moratorium approved by the Chicago City Council.
Proposed Moratorium
The order does not itself enact a moratorium on data centers and expressly recognizes that the Chicago City Council possesses exclusive legislative authority to impose one. Instead, the mayor calls upon the City Council to adopt a “narrowly tailored, time-limited moratorium” on new data center development and material expansions of existing data centers while the city completes a comprehensive modernization of its regulatory framework. The order characterizes these as necessary because the city “should not approve the construction of new data centers or the material expansion of existing facilities under an inadequate regulatory framework.” Neither the order nor any introduced legislation defines “material expansion,” specifies the proposed moratorium’s duration, identifies potential exemptions, or addresses how projects already in the pipeline would be treated.
Chicago is Part of a Broader Regulatory Trend
Johnson’s order reflects a broader national pattern of scrutiny on data center and AI infrastructure. As discussed in a previous GT Alert, on Aug. 3, 2026, Texas Gov. Greg Abbott directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) to audit data center projects in the interconnection queue before they advance, delaying ERCOT’s Batch Zero review. Virginia separately approved a temporary $0.011-per-kilowatt-hour tax on electricity consumed by certain data centers beginning July 1, 2026. Chicago also joined 40 other global cities in June 2026 to launch the Global Urban Data Centers Pact, a shared commitment to cleaner energy, lower costs, and healthier communities. These developments may suggest that developers, investors, utilities, and communities may see closer review of grid, water, environmental, fiscal, and local impacts across jurisdictions.
The two 90-day rulemaking processes for air pollution and noise introduce near-term compliance variables, while the enhanced planned development review, with its 60-day departmental consultation period and requirement that DPD include all identified conditions, may lengthen approval timelines and increase development costs.
Strategic Considerations for Data Centers
Until the city’s task force delivers its recommendations, developers remain unable to underwrite to permanent standards that have not been articulated. Chicago’s approach may also set a precedent for other municipalities considering moratoria or new enhanced requirements for data center resource use and community impacts.
A transparent, purpose-built framework may provide long-term clarity, reduce the risk of post-approval disputes, and give operators standards to design around. It also may help stakeholders address misinformation about water, air, and community impacts and explain data centers’ contributions to jobs, technological growth, and the tax base.
Practical Considerations
Parties negotiating data center leases, build-to-suit arrangements, and development agreements should consider reviewing milestones, extension rights, force majeure, and risk-allocation provisions.
Stakeholders in the broader Chicago data center space may wish to consider the following:
- Compile information about their data center, including the economic benefits of the data center, job creation, attraction of other high-skill and high-paying businesses, and community partnerships. Work to dispel incorrect information about their data center.
- Participate in the chief sustainability officer’s public notice and rulemaking process for air pollution and noise standards and seek opportunities to provide technical input to the task force.
- Assess pipeline and entitlement status, including pending applications, approved planned developments, permits, and development agreements; identify exposure to potential review or moratorium provisions.
- Monitor any forthcoming City Council moratorium legislation, including scope, duration, definitions, and exemptions.