A bill in the Texas state legislature would prohibit many immigrants and H-1B visa holders from China and three other countries from owning property in the state. Texas Gov. Greg Abbott supports the bill. The prospect of individuals being unable to buy a home or invest in a business based on their country of origin raises legal issues and could damage the state’s reputation.
On January 15, 2023, Governor Abbott endorsed the bill, which is sponsored by Republican State Senator Lois Kolkhorst. In a tweet, Abbott said, “A bill is filed in Texas legislature to ban citizens, governments & entities of China, Iran, North Korea & Russia from purchasing land in Texas. I will sign it. This follows a law I signed banning those countries from threatening our infrastructure.”
The bill may be part of a Republican “primary” battle between Texas Gov. Abbott and Florida Gov. Ron DeSantis, which has included both men sending migrants from the border to cities with Democratic mayors. “While Kolkhorst’s bill targets only the four countries and is related to real estate, DeSantis took action against seven countries and issued far broader prohibitions,” according to the conservative publication Center Square. “Last September, DeSantis issued an executive order prohibiting government entities from procuring technology products and services from companies owned by, controlled by or domiciled in seven foreign countries of concern: China, Cuba, Iran, North Korea, Syria, Russia and Venezuela.”
Under the Texas bill, “Purchase of or acquisition of title to real property by certain foreign individuals or entities [would be] prohibited.” The bill would bar such purchases or acquisitions by “a governmental entity of China, Iran, North Korea or Russia; a company or other entity that is headquartered in China, Iran, North Korea or Russia…[or] an individual who is a citizen of China, Iran, North Korea or Russia.”
The bill also prevents such acquisitions by companies directly or indirectly controlled by any of the four governments, or companies owned by or the majority of stock ownership or other ownership interest held by a company headquartered in one of the four countries or an individual who is a citizen of China, Iran, North Korea or Russia.
The bill raises many questions. Noah Klug of the Klug Law Firm PLLC in New York responded to questions about the legal ramifications of the legislation. “The bill, at least as it currently stands, is quite vague,” said Klug. “It simply states, ‘an individual who is a citizen of China, Iran, North Korea, or Russia’ ‘may not purchase or otherwise acquire title to real property in this state.’ I would take that to mean that anyone living here with Chinese, Iranian, North Korean or Russian citizenship would be banned from acquiring real property in Texas if this bill is passed.”
Klug said the ban would include F-1 students, H-1B visa holders and lawful permanent residents (green card holders)—anyone from the four countries who is not a U.S. citizen. Klug notes that State Senator Lois Kolkhorst, the bill’s sponsor, said in a statement that the bill “will make crystal clear that the prohibitions do not apply to United States citizens and lawful permanent residents.” (Emphasis added). However, the bill, as written, does not make that apparent.
Governor Abbott stated at a news conference that the legislation “doesn’t affect at all people who are citizens or intend to be citizens of the United States.” It’s unclear what he means by “intend to be citizens.” Immigration law is specialized, and it’s common for policymakers to possess a less than firm grasp of immigration law, note analysts.
For companies, the way the bill is written, “regardless of U.S. immigration status (even if they are lawful permanent residents), if the majority owners are citizens of these countries, then the company would be barred from acquiring real property,” said Klug.
He said the bill does not explicitly address dual citizens, but he doesn’t think they would be subject to the property ownership ban. “While the bill is certainly bold, and the constitutionality is being fiercely questioned by opponents, I do not believe that Texas would even attempt to ban dual U.S. citizens from acquiring property, a clear violation of the Fifth Amendment,” said Klug. He noted the legislation does not appear to be retroactive. In other words, it would not require divestment by current property owners who fall under the bill’s restrictions.
There are approximately 80,000 non-U.S. citizens born in the four countries who are residents of Texas, according to a National Foundation for American Policy analysis of the American Community Survey. About 55,000 are employed and more than 5,000 are self-employed, including over 1,000 with incorporated businesses. [Note: Article updated to add these statistics.]
If the bill were to become law, an H-1B visa holder from France could buy a house, but one from China could not. A Ph.D. student from Russia at a Texas university would not be allowed to purchase property, but a student from Sweden could. Individuals from the affected countries could start making decisions on where to work or study to avoid Texas. Companies might become alarmed if employees are treated differently under Texas law based on their place of birth.