Legal Sidebari
State Regulation of Foreign Ownership of U.S.
Land: January to June 2023
July 28, 2023
State and federal lawmakers have expressed interest in legislative options to address the potential national
security and economic implications of foreign ownership of U.S. land. During the first six months of
2023, at least 15 states enacted legislation regulating foreign ownership of real property. A group of
plaintiffs filed a legal challenge to one state law—Florida’s Senate Bill 264 (SB 264)—arguing that it
violates their constitutional rights, does not comport with the federal Fair Housing Act, and is preempted
by federal law. This Sidebar (1) outlines the recent state legislation on foreign ownership of real property;
(2) discusses SB 264 and the lawsuit challenging it; and (3) examines considerations for Congress.
Many State Legislatures Enacted or Proposed Laws Regulating Foreign
Ownership of U.S. Land in 2023
Between January and June 2023, Alabama, Arkansas, Florida, Idaho, Indiana, Louisiana, Mississippi,
Montana, North Dakota (HB 1135 and SB 2371), Oklahoma, South Dakota, Tennessee, Utah, West
Virginia, and Virginia enacted legislation regulating foreign ownership of U.S. land. During this same
period, state lawmakers introduced bills in more than 20 other states that would regulate or restrict foreign
ownership of real property if enacted.
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Figure 1. States that Enacted Restrictions on Foreign Ownership of U.S. Land Between
January and June 2023
Sources: 2023 Ala. Laws 332; 2023 Ark. Acts 636; 2023 Fla. Sess. Law Serv. ch. 2023-33 (West); 2023 Idaho Sess. Laws ch.
251; 2023 Ind. Legis. Serv. P.L. 118-2023 (West); 2023 La. Acts 464; 2023 Miss. Laws HB 280; 2023 Mont. Laws ch. 434; 2023
N.D. Laws. H.B. 1135; 2023 N.D. Laws S.B. 2371; 2023 Okla. Sess. Law Serv. ch. 327 (West); 2023 S.D. Laws ch. 169; 2023
Tenn. Pub. Acts ch. 369; 2023 Utah Laws ch. 61; 2023 W. Va. Acts. ch. 310.
Recent State Laws and Legislative Proposals Differ in Their Restrictions
State laws and legislative proposals differ in their approaches and requirements. For example, some states
enacted information-gathering laws that mandate disclosure of, or require studies on, foreign ownership
of U.S. land. Others laws directly prohibit certain transactions and may require divestiture of foreign-
owned land. Some restrictions apply only to agricultural land, others to land near military installations or
critical infrastructure, and others to all real property within the state.
Laws and legislative proposals also vary as to which groups are subject to land ownership restrictions.
Some seek to regulate real property transactions with individuals and entities from a list of named
countries. Others aim to govern purchases by all non-U.S. citizens. A third set addresses purchases by
individuals and entities from countries identified on lists maintained under federal law, such as the
International Traffic in Arms Regulations (Tables 1 and 2 of 22 C.F.R. § 126); the foreign adversaries list
generated under Executive Order 13873 and its implementing regulations; sanctions lists maintained by
the Office of Foreign Assets Control (OFAC) in the Department of the Treasury; or countries of particular
concern designated by the U.S. Secretary of State, among other federal frameworks.
SB 264 Creates Two Sets of Restrictions on Land Ownership in Florida
Florida’s recent law, SB 264 (to be codified at Florida Statutes §§ 692.201–.205), creates two sets of land
ownership restrictions. The first set applies to foreign principals connected with foreign countries of
concern (defined as China, Russia, Iran, North Korea, Cuba, the Venezuelan regime of Nicolás Maduro,
and Syria). Foreign principals are defined as the foreign governments themselves, certain corporate and
political bodies, and individuals domiciled in the countries of concern who are not U.S. citizens or lawful
permanent residents. Individuals and entities in these groups cannot acquire or own agricultural land in
Florida or real property within ten miles of a military installation or critical infrastructure facility in the
state.
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SB 264’s second set of restrictions applies only to certain individuals and entities connected with the
People’s Republic of China (PRC)—the PRC itself, certain political bodies and individual members of the
PRC or the Communist Party of China, companies organized under PRC law or that have their principal
place of business there, and individuals domiciled in the PRC who are not U.S. citizens or lawful
permanent residents. These PRC-connected individuals and entities cannot purchase any real property in
Florida, absent an exception.
Both sets of restrictions exempt de minimis investments in some securities or companies registered with
the Securities and Exchange Commission. Individuals with nontourist visas or who have been granted
asylum may also purchase one parcel up to two acres in size that is not within five miles of a military
installation. Preexisting land owners that acquired their property before SB 264 became effective can
continue to own their parcels, but they cannot buy additional land unless permitted by law. SB 264
requires all foreign principals—both existing owners and new purchasers—to register land ownership
with state officials if the parcel is within ten miles of a military installation or critical infrastructure. Some
PRC-connected individuals and entities must register regardless of the parcel’s location.
SB 264 Has Been Challenged on Constitutional and Other Grounds
In May 2023, a group of PRC citizens and a Florida corporation challenged SB 264 under several federal
laws. Plaintiffs in the case, Shen v. Simpson, include four PRC citizens, lawful residents of the United
States and Florida with nonimmigrant visas. Each says that they have lived in Florida for four or five
years and owns or plans to buy residential property. One plaintiff, for example, says that she has
contracted for construction of a home she may now be unable to buy, as the Florida law will take effect
before it is complete. A fifth plaintiff is a real estate company primarily serving Chinese-speaking clients
that claims it stands to lose business under the new law’s restrictions.
Plaintiffs allege violations of the Equal Protection Clause of the Fourteenth Amendment. In particular,
they allege that the Florida law targets them on the basis of race, alienage, and national origin, which the
Equal Protection Clause prohibits outside of narrow circumstances. Plaintiffs also allege violations of the
Fourteenth Amendment’s Due Process Clause, which generally requires adequate procedures and
opportunity to contest the loss of rights or property. The Florida law’s restrictions, they maintain, are too
ambiguous to comply with due process.
Plaintiffs bring statutory claims as well. Citing its ban on national origin discrimination, plaintiffs seek
relief under the Fair Housing Act, 42 U.S.C. § 3604. The Act applies to housing and land for housing and
protects anyone aggrieved by a violation—including sellers, buyers, and other transaction participants.
Finally, plaintiffs allege that several fields of federal law preempt SB 264. They argue SB 264 interferes
with federal law underpinning OFAC sanctions and the Committee on Foreign Investment in the United
States (CFIUS), which has authority to review the national security implications of some foreign
investment in the United States. Plaintiffs also contend the Florida law exceeds constitutional limits on
states’ powers over foreign affairs and foreign commerce.
The United States Supported the Challenge to SB 264
The U.S. Department of Justice has filed a Statement of Interest in the case supporting the plaintiffs’
motion for a preliminary injunction and arguing that the Fair Housing Act bars SB 264. The statute
declares invalid “any law of a State” that permits or requires a discriminatory housing practice. In
addition, the United States argues, SB 264 violates the Equal Protection Clause, because it discriminates
based on alienage and national origin without justification. While the federal government has more
leeway in regulating alienage, the United States explains, state classifications singling out aliens must be
narrowly tailored in pursuit of a compelling government interest. The United States maintains that the law
“will not advance the State’s purported goal of increasing public safety,” as Florida has not identified
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“any legitimate connection between protecting the State” and barring individuals of certain nationalities
from owning real property. Plaintiffs, the United States points out, are not members of the PRC
government or of the Communist Party of China and are not representatives of their country of origin.
Several state attorneys general have also filed an amicus brief in the case in support of SB 264, arguing
that the Florida law classifies based on domicile, not alienage or national origin, and that states have
broad police powers to control landownership.
Considerations for Congress
Some commentators and Members of the 118th Congress have called for increased federal scrutiny of
foreign ownership of U.S. land due to concerns over issues including national security, economic
competitiveness, and the absence of U.S. citizens’ reciprocal right to purchase land in some foreign
countries. Currently, no federal law comprehensively regulates all foreign purchases of U.S. real property.
One area of congressional interest has been in foreign ownership of U.S. agricultural land. The
Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA), discussed in this CRS In Focus,
requires foreign investors to disclose their interests in U.S. agricultural land. The AFIDA framework does
not empower the federal government to block purchases or require divestment of agricultural land, even if
the foreign ownership is detrimental to U.S. interests. In FY2022 and FY2023 appropriations provisions,
Congress built upon AFIDA’s framework to require the U.S. Department of Agriculture to expand its
reporting and to facilitate transparency with respect to foreign ownership of U.S. agricultural land.
In contrast to AFIDA, the authorities underlying CFIUS, examined in this In Focus, allow the executive
branch to prohibit or impose divestiture of some foreign purchases of U.S. land or to mitigate the national
security risks associated with those transactions. While CFIUS has transaction-review authority, its
geographic jurisdiction is limited to covered real estate, which is defined by proximity to U.S. military
installations, airports, and other commercial ports.
Several bills introduced in the 118th Congress would build on the AFIDA and CFIUS authorities. Some
proposals would expand AFIDA reporting mandates or increase penalties for nondisclosure. Others would
give CFIUS jurisdiction over broader categories of land. For example, the Senate voted to include a
provision in the proposed National Defense Authorization Act for Fiscal Year 2024 (FY2024 NDAA) that
would expand CFIUS’s authority to review certain foreign investments in agricultural land and in U.S.
businesses engaged in agriculture or biotechnology related to agriculture. The proposed FY2024 NDAA
provision would also require the President to prohibit some foreign investment in agriculture-related land
or businesses by individuals and entities connected with the PRC, Russia, Iran, and North Korea. Other
proposals in the 118th Congress would expand both AFIDA and CFIUS authorities. Another category of
bills would create new stand-alone prohibitions on purchases of U.S. land by some or all foreign
individuals and entities.
Some observers and Members of Congress have expressed concern that state-level restrictions on foreign
ownership risk discriminating against people of certain backgrounds or national origins. From before the
inception of the PRC government, people of Asian origin, ethnicity, and ancestry, including those with
ties to China, have historically been subject to discriminatory state, local, and federal laws. Some laws
involved restrictions on landownership. The Supreme Court’s early equal protection jurisprudence, dating
back to 1886, addressed facially neutral ordinances aimed at restricting Chinese business properties based
on owners’ “race and nationality.”
Congress could consider using its power to regulate foreign commerce to enact legislation that preempts
state laws regulating foreign ownership of land in the United States. For example, the Preemption of Real
Property Discrimination Act (H.R. 3697), introduced in the 118th Congress, would preempt state laws that
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restrict land purchases based on citizenship. Additional background on preemption principles is available
in this CRS Report.
Author Information
April J. Anderson
Stephen P. Mulligan
Legislative Attorney
Legislative Attorney
Jason J. Hawkins
Law Librarian
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