Real estate players often fret over new laws that could restrict their work, but as states like Pennsylvania roll out rules for the data center sector, some are embracing them.

Gov. Josh Shapiro last month enacted new restrictions on the data center sector with an executive order. The move has generated headlines as it represents a pivot away from data centers for Shapiro, a rumored presidential hopeful who last year boosted the industry at a Pittsburgh event alongside President Donald Trump.

But some data center builders have welcomed the new rules. At least one believes these guardrails encourage well-considered projects and weed out speculators with little regard for community impact.

“This is really separating responsible developers from those who are just coming in and trying to make a quick buck,” Pennsylvania Data Center Partners CEO Igal Feibush told Bisnow.

“I wouldn’t look at this as anti-data center development at all,” he added. “This is the governor providing some protections for communities who didn’t see this coming and want to know there’s someone looking out for them.”

The order enacted Aug. 19 requires municipal approval before a new data center project can be reviewed by the state and bars the sector from Shapiro’s signature Fast Track permitting program.

It also heavily incentivizes compliance with the Governor’s Responsible Infrastructure Development program, a broad set of guidelines that, among other things, seek to minimize water usage and have developers buy or create their own power to avoid impacting average ratepayers. 

Projects that don’t comply will not be eligible for rolling permit application reviews or Pennsylvania’s sales tax exemption for data center developers.

When rolling out his executive order, Shapiro specifically called out “speculative proposals” that have increasingly overwhelmed local officials and the commonwealth’s utility providers in recent months.

Environmental advocate Katie Blume, the legislative director for Conservation Voters of Pennsylvania, raised a similar concern last month.

“We have so much speculation in Pennsylvania — like, gold rush speculation on these data centers,” Blume told Utility Dive.

“A lot of this [order] is going to be weeding out those bad actors because they’re not going to want to spend five years in the permitting process.”

Disincentivizing investors that pursue data center approvals for undeveloped land with the hopes of selling it off to an unspecified builder or end user down the line is good for long-term players like Feibush, he said.

“There's a lot of money in buying land and selling it to data center developers like myself,” Feibush said. “A lot of people are out there thinking it's the gold rush.”

Feibush said the executive order will be a boon for developers like him, who seek to hold their projects long term and can provide more clarity and transparency to local communities about how they will be impacted by the final product.

Feibush has a tenant secured for the 1.4-gigawatt, 4M SF Pennsylvania Data Center 1 campus his firm is building 20 miles west of Harrisburg, which is set to deliver in late 2027. He declined to reveal the user’s identity but said that information will become public in the coming weeks.

TECfusions, another data center builder with a major presence in Pennsylvania, celebrated its compliance with Shapiro's rules for the firm’s newest project, which delivered 30 miles north of Pittsburgh in New Kensington last month.

The facility was built with capacity for up to 3 gigawatts and will be fueled by an on-site natural gas-powered microgrid.

“Pennsylvania has set a clear standard: data center development must be real, responsible and accountable to the communities in which it operates,” TECfusions founder Simon Tusha said in a statement.

As data centers have become increasingly unpopular this year, new restrictions have been passed nationwide. 

Texas Gov. Greg Abbott paused new data center power connections in the industry hotbed last month. Some developers speaking at a Bisnow event in Texas shortly thereafter expressed similar sentiments about his order, saying it would help weed out illegitimate developers and “make sure it's the responsible players in this industry” that are allowed to build.

Some national data center industry leaders do have concerns over Shapiro’s executive order.

Data Center Coalition Executive Vice President of State Policy and Government Affairs Dan Diorio is worried that the shifting regulatory climate in Pennsylvania could create uncertainty for the industry and the economic impact he expects it to bring.

“In distinguishing speculative proposals from real projects, it’s important that rules are not changed midstream impacting ongoing investment in verified and responsible data center projects,” the Pennsylvania native told Bisnow in an emailed statement.

“Data centers take compliance and accountability seriously, building only where they are authorized to do so under local, state, and federal rules and regulations … One-size-fits-all policies that stifle investment and job creation are not the path forward.”