Marion County currently has no zoning definition for a data center. A facility drawing utility-scale power, running banks of cooling equipment around the clock, and testing diesel generators on a schedule is classified under the same general categories as any other industrial or commercial use. That gap is about to close — and if you own a home near a proposed site, the details matter.
The Department of Metropolitan Development (DMD) released a draft data-center zoning amendment in April 2026, took public comment through May 18, and then did something worth noting: it tightened the rules in response to that comment. The revised amendment is scheduled for a hearing before the Metropolitan Development Commission (MDC) on July 1, 2026. If the MDC approves it, the amendment moves to a City-County Council committee and then a full council vote.
Here is what the ordinance would and would not do for nearby residential owners — and how the property tax side of data centers actually works.
How the proposal got stricter
Data centers became a live political issue in Indianapolis this spring. On May 4, 2026, the City-County Council unanimously approved a special resolution asking the MDC to temporarily hold off on new data center approvals until formal regulations were adopted. The resolution is non-binding — councilors on both sides acknowledged it does not carry the force of law — and no true moratorium was enacted, despite some councilors and groups like the Citizens Action Coalition and Hoosier Environmental Council pushing for one.
Against that backdrop, the DMD revised its April draft. The two headline changes plus a new reporting requirement:
| Standard | April 2026 draft | Revised proposal |
|---|---|---|
| Setback from protected districts (parks, historic preservation areas) | 200 feet | 400 feet |
| Maximum noise at or beyond the property line | 65 decibels | 55 decibels |
| Annual public reporting | Not required | Required — energy use, water use, noise levels, generator testing frequency, filed with the MDC |
The revised amendment keeps requirements carried over from the April draft: developers must submit water management, electrical capacity, and noise mitigation plans, and the utility provider must verify that adequate electrical capacity exists to serve the facility.
For context on why 55 decibels matters: data center cooling systems produce a continuous low-frequency hum that residents near facilities in other markets have described as the dominant complaint. A property-line cap of 55 dB — roughly the level of a quiet conversation — is meaningfully stricter than the 65 dB in the first draft.
What the rules do not cover
This is the part homeowners near active sites need to understand clearly.
Warning
The proposed standards apply to projects going through zoning after adoption. Data centers already approved or already in the zoning pipeline would not be subject to the new rules — a point community members raised repeatedly during the comment period.
Two significant Marion County projects were approved in 2026 before any of this takes effect:
- Metrobloks (a California developer): a $500 million complex on 14 acres at 2505 N. Sherman Ave., the former drive-in theater site.
- Sabey Data Centers (Seattle): a Decatur Township facility spanning roughly 18 football fields.
Critics, including the Citizens Action Coalition and Hoosier Environmental Council, have also argued the proposal does not address broader health and environmental impacts — it is a zoning ordinance, not an environmental permit. It governs where a facility can sit, how loud it can be at the line, and what it must disclose. It does not cap water draw or power demand.
The property tax side: how data centers are assessed and abated
For homeowners, the zoning fight is about noise and proximity. But data centers also change the tax base of the townships and school districts they land in — and the mechanics are unusual.
A data center's assessed value is dominated by personal property — servers, network gear, UPS systems, cooling infrastructure — rather than the building itself. A hyperscale facility can carry hundreds of millions in personal property AV on top of its real property AV. We covered the statewide picture, including LEAP and the AWS New Carlisle campus, in our Indiana data center assessment guide.
The second mechanic is abatement. Under IC 6-1.1-12.1, the City-County Council can designate a parcel as an Economic Revitalization Area and grant a phased deduction on new investment — typically 10 years, stepping from 100% abated down to fully taxable. Marion County has historically been less aggressive on data center abatements than counties like Boone or St. Joseph, but each deal is negotiated project by project and approved by the council. If an abatement is granted, the facility contributes little to the tax rolls in its early years and phases in over a decade — a dynamic we detailed in our review of Marion County industrial abatement phase-outs.
The practical takeaway: a new data center near you is not an immediate windfall for your school district, and it is not an immediate spike in the commercial tax base that relieves residential bills. The revenue arrives on the abatement schedule, if and when one is granted. For how Marion County values commercial and industrial property generally, see our 2026 commercial and industrial assessment overview.
Will a data center affect your home's value?
Honest answer: the evidence is thin, and anyone quoting you a precise percentage is guessing. Data centers are a young land use in residential-adjacent settings, and there is no established body of Marion County sales data isolating their effect.
What can be said carefully:
- Nuisance factors are real and documentable. Continuous mechanical noise, generator testing, truck traffic during construction, and lighting are the complaints that recur in other markets. The revised ordinance's 55 dB cap and 400-foot setback exist precisely because these concerns were raised here.
- If your home's market value is affected, your assessment should reflect it. Indiana assessments are supposed to track market value-in-use. An external condition that demonstrably depresses what buyers will pay for your home is legitimate appeal evidence — but it requires actual sales data, not assertion. Watch what homes near the Sherman Avenue and Decatur Township sites actually sell for over the next few years.
- Do not pre-emptively assume a loss. A facility that meets a 55 dB property-line standard behind a 400-foot setback may have no measurable effect on nearby sales at all.
How to weigh in
The process still has several steps where public input counts:
- MDC hearing, July 1, 2026 — the commission hears the revised amendment. MDC meetings are public and include time for comment on agenda items.
- Council committee — if the MDC approves, the amendment moves to a City-County Council committee hearing.
- Full council vote — final adoption requires the full City-County Council.
Separately, individual data center projects still require their own zoning approvals — rezones and variances come with notice to nearby owners and public hearings. If a specific site is proposed near you, that project-level hearing is where site-specific conditions (landscaping, berms, orientation of mechanical equipment) get negotiated.
Keep an eye on your own numbers
Whatever happens on July 1, the way to protect yourself is with data, not anxiety. Use our Marion County property explorer to see your current assessment and how it compares to your neighbors, and our property lookup tool to pull your parcel's assessed value, classification, and nearby sales in one place.
If a nearby development — data center or otherwise — coincides with an assessment that no longer matches what homes around you are selling for, our tax appeal service builds the comparable-sales evidence package and files on your behalf.