Oregon Pauses State Land Deals for Data Centers Through 2027

Oregon Governor Tina Kotek has ordered state agencies to immediately pause all unapproved requests for state-owned land transactions intended for new data center projects. The directive, which remains in effect until July 1, 2027, signals a sharp pivot in how the state manages the rapid expansion of AI-driven infrastructure.

The pause applies to a wide range of state-owned property transactions, including leases, rentals, sales, transfers, easements, rights-of-way, and land-use permits. This move follows the governor's recent cancellation of a 32-acre land sale at the Mill Creek Corporate Center in Salem, which had been earmarked for a data center project by Verrus. According to Governor Kotek, the decision is necessary because data center corporations are asking communities to "absorb enormous demands" on natural resources, energy, and infrastructure.

Managing the AI Boom

This state-level freeze is part of a broader strategy to regulate the growth of the tech sector. In January 2026, Governor Kotek convened the Oregon Data Center Advisory Committee to develop formal policy recommendations. The administration is also leveraging the Protecting Oregonians With Energy Responsibility (POWER) Act, signed into law in 2025, which requires large energy users to pay a more equitable share of the costs associated with infrastructure upgrades.

Oregon's state government is not acting alone. Local municipalities, including Hillsboro, Salem, and Woodburn, have already pursued or enacted their own moratoriums on data center development as they grapple with the physical requirements of these facilities.

Resource Strain and Community Impact

At the heart of the pause is a growing conflict between the economic potential of the AI boom and the sustainability of local resources. State officials have expressed concern over the "enormous demands" these facilities place on the power grid and water supplies. Specifically, the Oregon Water Resources Department has noted a lack of comprehensive data regarding the actual volume of water consumed by data centers, making it difficult to assess long-term environmental risks.

Governor Kotek has been blunt about the perceived imbalance of the current growth model, stating that data center corporations are "taking Oregon out to an expensive dinner and leaving our environment, communities, and people to foot the bill."

The Path to 2027

Unless the governor's office or the Oregon Legislature alters the directive, the freeze on state land will persist for several years. This window provides the state time to establish a regulatory framework that balances technological investment with community protections.

Industry observers are now looking toward the 2027 legislative session to see if these temporary measures evolve into permanent land-use laws. The outcome will likely serve as a precedent for other states facing similar pressures to accommodate the massive energy and water footprints of the global AI infrastructure race.