A new Texas law banning property purchases by people and entities tied to certain countries will take effect at the beginning of September, even as a legal fight over the measure heads to appeal.
Senate Bill 17 will prohibit people, companies and government-linked entities connected to China, Iran, North Korea and Russia from acquiring most types of real estate in Texas, including farmland, homes and commercial property.
Supporters say the measure is a safeguard against national security threats repeatedly highlighted in the federal government’s annual threat assessment. Republican Sen. Lois Kolkhorst of Brenham, who authored the law, called it “the strongest protection national security bill of any state passed” during a press conference in May.
“There are people that are agents of those countries and they are buying up some of our strategic assets,” Kolkhorst said. ‘We're not going to have that anymore.”
The restrictions extend not only to foreign governments and businesses but also to individuals with citizenship, permanent residence or political ties to the nations. People in Texas on student or work visas from the four listed countries may buy a single home to live in but will be barred from purchasing additional properties.
Kolkhorst pushed forward a similar measure in 2023, but previous efforts failed to cross the finish line. This time around, she says the legislation is stronger.
“To our adversaries that want to do harm to our state and nation: You're not buying up Texas land,” Kolkhorst said.
If a person violates SB 17, they could face a state jail felony, which carries up to two years in jail and up to $10,000 in fines. Companies or organizations could be sued for up to $250,000 or half the value of the property involved in the violation.
“They don't really care about national security. They do care about looking tough on immigrants." — Justin Sadowsky, Chinese American Legal Defense Alliance
While new to Texas starting Sept. 1, this type of legislation is far from unique to The Lone Star State. More than half of the states in the country already have laws on the books limiting foreign land ownership.
According to NPR, Chinese companies and investors held just over 383,900 acres in the U.S. in 2021, representing less than 1% of farmland in any state where purchases occurred.
After signing SB 17 into law in June, Gov. Greg Abbott praised the measure on social media.
But opponents say the measure is discriminatory and punishes people who are law residents of Texas. Two Chinese nationals living in the state filed suit in July, arguing the ban violates constitutional protections and could even criminalize long-term leases.
“It's discriminating against Chinese people, it's discriminating against immigrants,” said Justin Sadowsky, legal director at the Chinese American Legal Defense Alliance and attorney for the plaintiffs.
“It’s not really an issue,” Sadowsky added. “They don't really care about national security. They do care about looking tough on immigrants, looking tough on China and effectively being harmful towards people that their base see as undesirable or different.”
A similar 2023 law in Florida is also facing a lawsuit, with groups like The American Civil Liberties Union (ACLU) and the Asian American Legal Defense and Education Fund (AALDEF) involved. Jane Shim, who directs AALDEF’s anti-Asian violence program, warns that SB 17 could also have a chilling effect on people trying to buy or sell property in Texas.
“If there’s this law, and you’re not sure how it applies or what its fate is, why are you going to take a chance and sell to someone who might be based in China?” Shim said. “Are you going to stick your neck out anyway? Or are you gonna stick on the safe side and just deny an apartment to someone who appears Chinese?”
The lawsuit in Texas was seeking to block SB 17 from going into effect, but a federal judge dismissed the case earlier this month. However, Sadowsky and his team has since appealed to the U.S. Fifth Circuit Court of Appeals, keeping the legal battle alive as the law prepares to go into effect next week.
According to Sadowsky, there’s still a possibility that SB 17 could be temporarily blocked.
