Federal Court Partially Blocks Florida’s Ban On Chinese Landownership

A controversial Florida law that bans Chinese nationals from buying certain land in the state was dealt a significant blow last week, with a federal court signaling it is unlikely to survive legal challenges. 

The 11th U.S. Circuit Court of Appeals in Atlanta on Thursday blocked the law from being enforced against two Chinese nationals who were in the process of purchasing property, ruling that the parties were likely to prevail in another case where they claim the ban violates federal law, NBC News reported. 

“This prohibition blatantly violates the Fourteenth Amendment’s protection against discrimination,” Nancy Abudu, one of the judges on the panel that heard the case, wrote in the court’s decision, Politico reported. 

The court stopped short of entirely blocking the law but granted the injunction to the two plaintiffs as a separate case, Shen v. Simpson, brought by four plaintiffs represented by the American Civil Liberties Union, proceeds through the courts. 

That broader case was appealed after a federal judge appointed by former President Donald Trump in August declined to block the law, ruling that it was based on citizenship considerations rather than race or national origin and therefore didn’t run afoul of the 14th Amendment's equal protection clause. 

Gov. Ron DeSantis has championed the law, describing it as a “crackdown on Communist China” during a bill-signing ceremony in May. 

Abudu, who was appointed by President Joe Biden, said the statements from DeSantis and other Florida officials “establish that the law is a blanket ban against Chinese non-citizens from purchasing land within the state,” Politico reported.

The law, which went into effect in July, prohibits citizens from China, Russia, Iran, North Korea, Cuba, Venezuela and Syria who are not permanent U.S. residents from buying or owning more than a single parcel no bigger than 2 acres. Citizens of those countries are also prohibited from owning land within 5 miles of a military installation or infrastructure like power plants and airports. 

A map created by law firm Bilzin Sumberg showed that nearly all of South Florida could fall under those restrictions, depending on how the law is interpreted.

Julia Friedland, DeSantis’ deputy press secretary, told Politico the governor disagreed with the latest court decision but stressed that the law remained on the books as the broader case moves through the court. 

“Our law is still very much in effect, we are confident in our legal position on the merits, and we will continue to fight back against foreign malign influence in Florida,” she told the publication.

The Department of Justice has filed a statement of interest in the ongoing case, contending that the statute violates federal law and the Constitution.

The government was joined in December by a lobbying group made up of some of the country’s most prominent U.S. real estate investors, which are fighting the law and seeking to limit its reach. 

Blackstone, Starwood Capital, Related Cos. and Lennar Corp. are among the real estate giants funding lobbying efforts to relax the law’s restrictions. They contend that the law, passed as Senate Bill 264, is too far-reaching and will negatively impact Florida’s economy. 

While Florida’s law has faced the most scrutiny, the state is far from alone in looking to limit foreign ownership of property. Bisnow reported in May that more than 30 states, including Texas, Louisiana and Alabama, were considering or had passed similar legislation, according to data from the National Conference of State Legislatures. 

Bethany Li, legal director of the Asian American Legal Defense and Education Fund, one of the firms representing the plaintiffs in the recent case, said in an ACLU press release after the decision that the ruling should give pause to other states considering similar legislation. 

“[Thursday's] ruling should serve as a warning to other states who are considering passing similarly racist bills, steeped in a history when Asians were ineligible for citizenship and were told they didn’t belong,” Li said. 

The laws have sown confusion and uncertainty across commercial real estate, with brokers unsure of how to comply with enforcement and investors putting deals on hold until details are clearer. 

“Our concern with the new law is that these U.S.-managed investment funds, which are controlled and managed by U.S. nationals, may now be precluded from pursuing investment opportunities in Florida if there is any level of investor participation in the fund from countries of concern like China,” industry group The Real Estate Roundtable wrote in a September letter to the Florida Real Estate Commission.