Why some lawmakers want to restrict foreign entities from buying up land
(NewsNation) — As residents in North Dakota cheered a decision to block a Chinese company from a construction project, other states are also seeking to block land sales to foreign investors.
The decision in Grand Forks, North Dakota, to block Chinese company Fufeng Group from building a mill on 300 acres of land came as Navy divers were retrieving pieces of a suspected Chinese surveillance balloon that was shot down off the South Carolina coast.
The U.S. Air Force recently warned the proposed corn mill, which would have been built near a military base, could be a risk to national security.
The city council in Grand Forks can deny building permits and refuse to connect infrastructure, but Fufeng still legally owns the land the mill was meant to sit on.
Now, increasing tensions between China and the U.S. are reviving calls from lawmakers who want to limit or block foreign investments in land in the U.S.
U.S. Sen. Jon Tester, a Democrat from Montana, is sponsoring legislation to include agriculture as a factor in national security decisions allowing foreign real estate investments.
“The bottom line is we don’t want folks from China owning our farmland. It goes against food security and it goes against national security,” Tester told the Associated Press.
At least 11 state legislatures also are considering measures to address the concern.
Foreign entities and individuals control less than 3% of U.S. farmland, according to the U.S. Department of Agriculture. Of that, those with ties to China control less than 1%, or roughly 600 square miles.
Yet in recent years, transactions of agricultural and nonagricultural land have attracted scrutiny, particularly in states with a large U.S. military presence.
Limitations on foreign individuals or entities owning farmland vary widely throughout the U.S. Most states allow it, while 14 have restrictions. No states have total prohibitions. Of the five states where the U.S. Department of Agriculture says entities with ties to China own the most farmland, four don’t limit foreign ownership: North Carolina, Virginia, Texas and Utah.
The fifth, Missouri, has a cap on foreign land ownership that state lawmakers want to make more stringent.
Ownership restriction supporters often speculate about foreign buyers’ motives and whether people with ties to adversaries such as China intend to use land for spying or exerting control over the U.S. food supply.
Texas in 2021 banned infrastructure deals with individuals tied to hostile governments, including China. The policy came after a Chinese army veteran and real estate tycoon purchased a wind farm in a border town near a U.S. Air Force base. This year, Texas Republicans want to expand that with a ban against land purchases by individuals and entities from hostile countries, including China.
Critics see it as anti-foreigner hysteria, with Texas’ Asian American community particularly concerned about the effect on immigrants who want to buy homes and build businesses.
Florida Gov. Ron DeSantis is also proposing a ban on Chinese real estate investments in his state, and has already signed laws requiring companies that do more than $100,000 of business with China to disclose that relationship, and mandating universities report Chinese donations over $50,000.
The restrictions have encountered resistance in states with strong property rights. In Wyoming, two proposals to restrict foreign land ownership failed this week even though Republicans who control the statehouse were sympathetic to concerns about China expanding its reach.
“We’ve had a lot of problems with China lately in the air. Big balloons flying over us. We look at this as a national and state security bill, for Wyoming and the United States,” said state Rep. Bill Allemand, a Republican from Casper.
Lawmakers on Monday rejected Allemand’s proposal to ban ownership of more than an acre of land by people from China, Russia and countries the U.S. government considers state sponsors of terrorism. Skeptics said it would be difficult to police due to the complex web of title companies and holding corporations in agricultural real estate.
California’s legislature also passed a bill banning foreign entities from buying agricultural land. That legislation did not specifically mention China, but it was vetoed by Gov. Gavin Newsom. Sponsors of the bill said it was critical for food security to keep agricultural land in U.S. hands.
As states consider bans, questions remain about the constitutionality of such laws, especially those that apply to individuals as well as companies.
The Associated Press contributed to this report.