In Congress and in statehouses throughout the United States, lawmakers continue to introduce legislation designed to bar citizens of foreign adversaries from being able to purchase real property. Ostensibly aimed at preventing a short list of enemy governments from controlling the American food supply or spying on military facilities, these laws’ most cited rationale is fear of Chinese Communist Party (CCP) influence on American soil. Sponsors argue that such legislation would safeguard agricultural land, defense, and critical infrastructure from malign foreign influence. However, much of the legislation introduced so far extends well beyond this ambit, restricting even those with no discernable ties to the CCP or other organs of Chinese state power.
These bills – which are opposed by groups including the National Asian Pacific American Bar Association, where I previously served as Policy Director and continue to advise – raise significant concerns regarding the balancing of national security equities against civil liberties, federal preemption grounds, and present a host of unintended consequences with the potential to harm the economies of affected states. Opponents of these bills have described such legislation as a revival of unconstitutional anti-Asian land laws — a class of law once called “alien land laws” — and an ongoing threat to the civil rights of all Asian Americans, regardless of ethnic background.
Did You Say “Asians” or “Agents”?
On May 8, 2023, Florida Governor Ron DeSantis signed into law SB 264, which bars “foreign principals” — defined as government officials, members of political parties, and anyone domiciled in certain countries of concern (China, Russia, Iran, North Korea, Syria, Venezuela, and Cuba) from purchasing any agricultural land or any property within 10 miles of a military installation or critical infrastructure. The law also specifically bars any Chinese foreign principals from purchasing any real estate whatsoever in the state, with limited exceptions for residential property by those lawfully present in the United States. Upon enactment, DeSantis proclaimed, “I’m proud to sign this legislation to stop the purchase of our farmland and land near our military bases and critical infrastructure by Chinese agents.”
The legislation, however, far exceeds the purchase of strategically important land by “Chinese agents.” With few exceptions, anyone domiciled in China – regardless of non-affiliation with the CCP – is barred from purchasing real estate in Florida. Unlike Russians or Syrians, Chinese citizens are singled out and prohibited from purchasing non-residential property, even land nowhere near a military base. There are carveouts for dual U.S. citizens and green card holders, but other lawfully present Chinese nationals face further restrictions. Violations could result in forfeiture and criminal penalties.
If part of the intent of the Florida legislation is to thwart the viability of adversarial authoritarian regimes, the law’s blanket prohibition on real estate acquisition by any member of any political party from the named countries works against this. While potentially deterring single party regimes such as China and North Korea from investing in Florida, SB 264’s terms would also place restrictions on Venezuelan opposition leader Juan Guiado (who was recently spotted in Miami) and Russian dissident Alexei Navalny.
Florida is not alone in ramping up legislation to ban Chinese residents and others from purchasing real estate. Sponsors from both parties, including in California and New York have introduced drafts, and bills have advanced quickly in Texas, Louisiana, South Carolina, and Alabama presenting many of the same scoping problems. For example, SB 91 in Louisiana prohibits the leasing of immovable property to any citizen of China within 50 miles of a military facility, unless they hold a green card. Thus, lawfully admitted Chinese citizens present on student or employment visas studying or working at Louisiana State University would not be able to even rent an apartment in Baton Rouge, which houses an armed forces reserve center. Louisiana’s House companion bill, HB 537 now contains exceptions for residential property, but would still restrict sales or leases of commercial property to foreign investors. While the latest version also does not apply to “lawfully present” immigrants, a prior draft only excepted valid visa holders, which would have barred most refugees, asylees, and asylum seekers, all of whom are authorized to live and work in the United States, from renting business space. (Refugees often enter the country using State Department issued transportation letters or boarding foils, which are not technically visas, and asylees are authorized to live and work in the United States by immigration judges or the Department of Homeland Security, not generally through visas). Legislation may prevent many of these vulnerable persons, like the 63 Chinese Christians who fled religious persecution in China or others escaping political oppression in Russia, Iran, Cuba, and Venezuela, from establishing roots.
Unintended Economic Pitfalls
When first introduced, HB 537 banned any person or entity “subject to the jurisdiction of a foreign adversary” from purchasing or leasing real estate. This would have potentially swept up anyone who does business in, resides in, has assets in, or even visits one of the named countries. For example, foreign-based energy companies operating in Louisiana, who may have subsidiaries, stakes in joint ventures, or other interests in countries such as Russia or Venezuela, could technically be “subject to the[ir] jurisdiction” and would not be allowed to purchase or lease office space in the state under the introduced version.
In an amended draft, the language was changed to “connected with a foreign adversary.” However, the definition of “connected with a foreign adversary” included persons “contracted by” foreign states. While U.S. and other energy companies have largely exited Russia due to its attack on Ukraine, others remain in the Caspian pipeline consortium with Russia. Furthermore, U.S.-based and foreign oil and gas companies like Chevron still maintain significant operations in places such as Venezuela. While this provision was later amended, it illustrates the risk for business actors.
The Florida law bars entities, whether state owned or not, that are headquartered or incorporated under the laws of foreign adversaries from purchasing farmland or land near critical infrastructure. This calls into question whether Miami’s billion dollar Brickell City Centre project, led by Hong Kong based Swire, would violate the new law. Smithfield Foods, the world’s largest pork producer, and the AMC Theatres, the world’s largest theatre chain, are also both owned by Chinese investors.
Origin Story One: Concerns Over Large Scale Land Transactions in Texas and North Dakota
While the downing of a Chinese spy balloon in March 2023 underscored the ongoing espionage threat posed by China, two erstwhile land transactions in Texas and North Dakota have been widely cited as the impetus for the raft of anti-Chinese land laws.
In 2016, Chinese billionaire entrepreneur Sun Guangxin began purchasing nearly 140,000 acres of land in southern Texas to build a wind farm that would feed directly into the state’s electrical grid. The transaction raised eyebrows due to Sun’s ties to the CCP and his former military service with the People’s Liberation Army (PLA). In 2020, the proposal was vetted by the federal interagency Committee on Foreign Investment in the United States (CFIUS), which is comprised of representatives from 16 U.S. departments and agencies, including Treasury, Justice, Commerce, Defense, Energy, and Homeland Security. CFIUS is tasked with reviewing, and if appropriate, blocking certain covered commercial transactions that could jeopardize national security. (CFIUS jurisdiction was expanded by the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) to include real estate transactions located in proximity to sensitive governmental facilities.)
The Trump Administration, through CFIUS, ultimately declined to block the transaction even though the project was located within 50 miles of Laughlin Air Force Base, the largest training facility for Air Force pilots in the country. In response, in June 2021, Texas Governor Greg Abbott signed the Lonestar Infrastructure Protection Act (LSIPA) which barred Chinese, North Korean, and Russian companies from entering into agreements affecting infrastructure, effectively killing the project.
Similarly, in North Dakota, Chinese investment in a corn mill, originally welcomed as an economic boon, was scuttled after concerns were raised that the 370 acre farm, located near the Grand Forks Air Force Base, could be a staging ground for espionage, and a threat to the American food supply. Plans by the Chinese Fufeng Group to build the mill were also reviewed by CFIUS, which in December 2022 declined to exercise jurisdiction after determining that “greenfield” investments were not covered transactions, which generally require a foreign entity to take over control of a U.S. business, and that the nearby base was not on a designated list of particularly sensitive facilities. The decision was criticized by the North Dakota’s senators, who requested an opinion by the Air Force which later claimed that the Fufeng project “presents a significant threat to national security.” Senator Marco Rubio, Vice Chair of the Senate Select Committee on Intelligence, blasted CFIUS, calling the transaction “dangerous and dumb.” The fate of the project was sealed when the Grand Forks City Council voted to terminate the deal in the wake of the Air Force letter.
On May 5, 2023, the Treasury Department, seemingly in response to the outcry over the Fufeng and Texas windfarm controversies, issued a notice of proposed rulemaking to add the Grand Forks and Laughlin Air Force Bases and six other military installations to the list of facilities that would be covered under the real estate provisions of CFIUS.
Proposed Legislation Is Disproportionate to the Perceived Threat
When SB 264 passed in Florida, the state’s agriculture commissioner hailed its enactment, stating “food security is national security.” Similarly, HB 379 was introduced in Alabama in order to “protect our agricultural interests and military facilities.” Despite legislators’ focus on protecting the American farmland, the U.S. Department of Agriculture (USDA) reported that, as of December 2020, Chinese investors held slightly less than one percent of foreign-held agricultural acreage, well behind Canada which held the largest amount at 32% or 12.4 million acres and investors from the Netherlands, Italy, United Kingdom, and Germany, who collectively held 12 million acres or 31 percent of foreign-owned land. In total, foreign investors reported holding interests in nearly 37.6 million acres (2.9 percent) of all privately held farmland and 1.7 percent of all land in the United States. Chinese owners held only 352,140 acres.
According to the National Agricultural Law Center, at least 21 states have already enacted legislation to limit foreign ownership of farmland, with states such as Iowa having near absolute restrictions on the books since the 1970s. Since 1978, the USDA has required that foreign ownership of agricultural land be registered with the agency pursuant to the Agricultural Foreign Investment Disclosure Act.
Much of the current legislation goes far beyond farmland. The Florida law prevents any Chinese citizen domiciled in China (except for U.S. citizens or green card holders) from purchasing any real estate, anywhere in the state, irrespective of whether the property has any agricultural or strategic value. For certain Chinese visa holders and asylees already in the United States, there are exceptions to purchase a single residence, but the property is limited to two acres and cannot be within five miles of any military installation, potentially ruling out much of Tampa Bay, home to US CENTCOM, and MacDill AFB; and preventing many lawfully admitted Chinese residents from buying a condo in downtown Miami, given the two Coast Guard stations located there.
In Alabama, before a last minute Senate amendment re-focused HB 379 on governments and government officials, the bill restricted those domiciled in China from buying within a 10-mile radius of a military base or any “critical infrastructure,” which is defined to include any airport, refinery, electric plant, or wastewater treatment facility. So, for example, a Chinese citizen enrolled at the University of Alabama on a student visa would not have been able to buy a condo in Tuscaloosa, which has two water treatment plants within five miles of the campus, and those on employment-based visas couldn’t have purchased a home in Birmingham, Huntsville (home to the state’s largest Asian American population), or in Montgomery, home to Maxwell Air Force Base.
Constitutional Challenges and the Potential for Discriminatory Enforcement
If the legislation is an excessive response to legitimate policy concerns, what are its real goals? Critics of anti-Chinese real estate legislation have argued that such laws violate the Constitution’s Equal Protection clause of the 14th amendment as they single out persons for adverse treatment based on national origin and would not survive strict scrutiny, and that provisions of these laws would violate the Fair Housing Act, which bars discrimination in any transactions related to residential housing. Indeed, just this week, a group of Chinese citizens who lawfully reside in Florida, sued the state alleging violations of both.
Lawmakers around the country have defended against allegations that their bills are unconstitutional, discriminatory, or promote anti-Asian racism, in part, by pointing to federal determinations of adversarial nations. For example, Alabama’s HB 379 originally targeted only Chinese citizens, but a Senate amendment changed the bill to instead blacklist officials from a list of “foreign countries of concern” (China, Russia, North Korea, and Iran), and others on the Treasury Department’s OFAC sanctions list. Legislation introduced in South Carolina and Louisiana is tethered to 15 C.F.R. §7.4, which lists foreign governments or foreign non-government persons that have “engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States” as determined by the Secretary of Commerce.
While the “People’s Republic of China” is not explicitly listed in the text of either the Louisiana Senate or South Carolina bills, lead sponsors have specifically cited to stopping China as the primary motivation. New Jersey’s Doug Steinhardt introduced a bill that would bar any foreign government or person from buying agricultural land in the Garden State, without naming names, but declared his legislative intent to “stop the Chinese Communist Party from establishing strategic control over sprawling tract of our farmland.” When DeSantis signed SB 264, he made no mention of Russian oligarchs purchasing condos in Miami, but instead issued a press released headlined, “Stop CCP Influence.”
By contrast, Utah’s HB 186, signed into law in March 2023, also does not explicitly mention “China,” but appears more narrowly tailored to barring real estate purchases by “restricted foreign entities” rather than individuals. A “restricted foreign entity” is defined as “a company that the United States Secretary of Defense is required to identify and report as a military company” under section 1260H of the National Defense Authorization Act of 2021. This list is limited to companies known to be operating in the United States, and that are owned or controlled by the PLA, are Chinese defense contractors, or are tech companies that receive funding through the Chinese military apparatus.
What remains to be seen, even with facially neutral legislation, is how such laws will be enforced, including whether Asian Americans of any heritage may face additional unwarranted scrutiny in real estate transactions by sellers, realtors, lenders, or others seeking to comply with the laws, based on impermissible factors such as names or appearance. At a Louisiana house committee hearing, the sponsor of HB 537 explained that if there was “reasonable suspicion” that a buyer could be connected to a foreign adversary, that should trigger additional scrutiny and “investigation” – but would that suspicion be precipitated merely by a purchaser being Chinese-American? Or even Asian American? The potential for untoward, unjustified scrutiny based on perceived race or national origin would have devastating consequences for innocent Asian Americans seeking the American dream.
An Ounce of Preemption
As discussed above, the federal CFIUS process already scrutinizes transactions, including of real estate, that could jeopardize national security. The CFIUS regime raises questions as to whether state laws purporting to protect military facilities and combat the influence of foreign adversaries named by the federal government may be preempted by federal equities under the Constitution’s Supremacy clause. The Supreme Court has already ruled that federal power supersedes state attempts to legislate in traditional areas of federal domain: foreign relations and immigration.
A state law may be preempted by a federal statute that contains an express preemption provision, or when states attempt to exercise jurisdiction in areas where the federal authority is exclusive, such as foreign relations, or when state laws conflict with, or stand as an obstacle to federal interests. In Arizona v. United States, the Supreme Court struck down several provisions of Arizona’s SB 1070, which among other things, made it a state crime for non-citizens to fail to register with the federal government and to work without authorization – both of which the Court found to be matters within the exclusive jurisdiction of the federal government. When Massachusetts attempted to impose its own sanctions regime against Burma by barring state entities from buying goods or services from companies doing business with Burma, the Supreme Court struck down that law on federal preemption grounds, as an obstacle to the president’s authority both to conduct diplomacy as the commander-in-chief saw fit, and to deploy the federal sanctions regime with discretion in furtherance of the administration’s foreign policy preferences. Furthermore, the Court noted that the Massachusetts law conflicted with the federal regime as its scope differed from federal sanctions, and “penalized individuals and conduct that Congress excluded.”
Professor Kristen Eichensehr has argued that CFIUS would preempt state laws such as the LSIPA, used to undo the Texas windfarm project. Eichensehr noted that the Texas infrastructure law could be preempted as it imposes restrictions in the name of national security that differ from federal law, which, under CFIUS, allows a review of individual transactions, not a blanket ban, and that CFIUS allows parties to negotiate and mitigate risk whereas the LSIPA does not provide any flexibilities.
From a policy standpoint, a patchwork of state laws purporting to protect federal facilities and enjoin foreign governments may undermine the federal executive’s ability to conduct foreign policy with one voice. Additionally, how would states (or realtors or lenders wary about facilitating barred transactions) identify specific national security risks or individuals who may be actual agents of foreign adversaries? While CFIUS relies on the investigative and analytical power of multiple federal agencies, including the Department of Defense and the intelligence community, states do not possess such tools. Notably the LSIPA’s list of barred countries that pose a threat to infrastructure is not based on a federal source, but is determined by the governor of Texas.
Federal Responses
In response to this torrent of state bills, Congressional Asian Pacific American Caucus (CAPAC) Chair Representative Judy Chu and CAPAC Housing Task Force Chair Representative Al Green yesterday introduced the Preemption of Real Property Discrimination Act to preempt discriminatory state laws, which Chu previously noted “harken back to nativist anti-Asian alien land laws in the 19th and 20th centuries after Chinese immigrants first arrived here, and later, a xenophobic suspicion of Japanese Americans during World War II that also led to their blanket incarceration.”
It is not just states, however, but her congressional colleagues who are attempting to legislate in this area: several bills in Congress would also bar foreign governments and citizens from purchasing property in the United States. On the Senate side, S. 1136, the “Not One More Inch or Acre Act” introduced by Senators Tom Cotton and Katie Britt, would bar any citizen of China, or any entity subject to Chinese jurisdiction, from purchasing real property in the United States, with the notable exception of refugees or those granted asylum, who have typically been barred under various state legislation. Representative Chip Roy has sponsored H.R. 344, the “Securing America’s Land for Foreign Interference Act,” which would direct the president to take necessary actions to prevent the purchase of land by CCP members or entities under the control or influence of the CCP.
Origin Story Two: Restrictions on Asians Owning Land Have Been Part and Parcel of American History
Unfortunately, the United States has seen this movie before. Authors on Just Security wrote last year about the pattern of anti-Asian discrimination and purported facial neutrality under the pretext of national security legislation on the 80th anniversary of Executive Order 9066, which targeted Japanese-Americans and Japanese nationals in the United States during World War II. While that may be the most famous example of anti-Asian discrimination in the United States, it is only one of many.
Florida’s newly-enacted ban on Chinese purchasers of real estate is an ironic twist to a saga that only five years ago, saw it become the last state in the union to strike discriminatory “alien land laws” from its books. In 2018, Florida voters finally removed language that had been enshrined in the constitution since 1926 which read, “all natural persons … are equal before the law and have inalienable rights, among which are the right to enjoy and defend life and liberty, to pursue happiness, … and to acquire, possess and protect property except that the ownership, inheritance, disposition and possession of real property by aliens ineligible for citizenship may be regulated or prohibited by law” (emphasis added).
The term “aliens ineligible for citizenship” was, as late property law Professor Keith Aoki wrote, “a disingenuous euphemism to disguise the fact that the targets of such laws were first-generation Japanese immigrants.” Indeed, in 1922, the Supreme Court ruled in Ozawa v. U.S. that naturalization was “limited to free white persons and aliens of African nativity,” leaving immigrants of Asian descent unable to gain citizenship. Historically, American immigration statutes had predominantly targeted Asians for exclusion – from the enactment of the earliest laws such as the Page Act of 1875 (barring Chinese women from entry) and Chinese Exclusion Act of 1882.
California enacted its first alien land law in 1913, and then in 1920 added further limitations on lease-holding. Similar laws were passed in Washington, Oregon, Idaho, Montana, Arizona, New Mexico, Texas, Kansas, Louisiana, Missouri, and Minnesota, Wyoming, and Florida. The rationale for these laws, in addition to suppressing economic competition, was, according to Aoki, the perceived threat of Japan’s growing industrial strength, its imperial military aspirations, and the projection onto Japanese immigrants of an image of disloyalty as a “fifth column … waiting to be activated at the emperor’s command.”
California’s alien land law was overturned in 1952 by its state Supreme Court, which held in Sei Fuji v. State of California that it violated the 14th amendment and was:
obviously designed and administered as an instrument for effectuating racial discrimination, and the most searching examination discloses no circumstances justifying classification on that basis. There is nothing to indicate that those alien residents who are racially ineligible for citizenship possess characteristics which are dangerous to the legitimate interests of the state, or that they, as a class, might use the land for purposes injurious to public morals, safety or welfare.
This ruling followed on the heels of the U.S. Supreme Court’s 1948 decision in Oyama v. California which held that California’s alien land laws abridged the 14th amendment rights of U.S. citizens of Japanese descent.
Prognosis
Conventional wisdom holds that it is the CCP that is in the business of taking away people’s property rights. As the nation heads into a presidential election year, fear mongering by state legislators may continue and more anti-China messaging bills may be introduced and passed barring Chinese and others from buying homes. With the Asian American community having just experienced a rise in hate crimes and bias-motivated incidents in the wake of false scapegoating over COVID, the deluge of anti-China legislation exacerbates long held perceptions of Asian Americans as perpetual foreigners, who hold loyalty to their ancestral homelands rather than the United States.
These laws on their face may make superficial efforts to distinguish between persons of Chinese ancestry and the CCP, but they also equate all Chinese denizens with foreign agents, and imply they pose national security threats regardless of lack of party or state affiliation. In a country where a Chinese American like Vincent Chin was murdered by disgruntled autoworkers who believed he was Japanese, or Sikh Americans were targeted after 9/11, technical distinctions will not allay concerns of racial profiling. Still, grassroots efforts to mitigate harms and narrow scoping do appear to be working in some places. In the United States, unlike in China, the people can – and should – actually do something about problematic laws by apprising legislators of the economic, reputational, and constitutional perils of these bills.