Texas SB 17: Chinese Nationals Forbidden to Purchase Property

First, list of linkable resources in order of appearance:
– U.S. Treasury: CFIUS

Now the article with the single allowed .gov link added (only the first mention of the resource in body text), no other changes:

Texas has put into effect one of the toughest state property laws aimed at foreign ownership in recent memory, reviving debates over “alien land laws” and stirring concern among immigrant communities and real estate markets. Senate Bill 17 (Texas SB 17), which took effect on September 1, 2025, bars people, companies, and government-linked entities from China, Russia, Iran, and North Korea from buying or otherwise gaining an interest in real property across the state. The law reaches residential homes, commercial buildings, farms, ranches, and even long-term leases, with narrow exceptions.

Supporters frame the law as a national security measure meant to protect strategic assets. Opponents say it revives a history of discrimination, will chill lawful activity, and unfairly targets Chinese nationals and other immigrants who are already part of Texas life.

Scope of the statute

The statute’s reach is sweeping and covers:

• Direct and indirect ownership, including partial interests.
• Leases of one year or longer for covered persons and entities.
• Residential, commercial, agricultural, and long-term lease transactions.

Exemptions and allowances:

• U.S. citizens and lawful permanent residents (green card holders) are fully exempt.
• Certain individuals lawfully in the United States on valid visas may purchase one Texas homestead if they intend to live there.
• Leases shorter than one year remain allowed.

Enforcement tools include criminal and civil penalties, property seizure, and investigations by the Texas Attorney General, giving the statute sharp enforcement reach and signaling increased risk for investors and landlords.

Early practical effects

The law’s practical meaning is already being tested:

• Chinese students and workers report trouble as most Texas residential leases run 12 months or more.
• Employers say relocations and office planning are complicated by the lease limit.
• Business groups report paused or canceled projects and heightened due diligence.
• Civil rights groups and scholars compare SB 17 to early 20th-century alien land laws and promise litigation.

An analysis by VisaVerge.com notes similar restrictions spreading across the country, with many state bills filed or passed in the last two years. Unlike federal reviews such as the Committee on Foreign Investment in the United States (CFIUS), which assesses case-by-case national security risks, Texas SB 17 applies broadly to all real property and routine leases without a tailored security test.

For background on federal review, see the U.S. Treasury: CFIUS.

Political and legal context

State officials argue the law fills gaps and draws a firm line. Governor Greg Abbott and Sen. Lois Kolkhorst, the bill’s sponsor, have praised SB 17 as robust protection against foreign control of strategic assets, citing intelligence warnings about hostile governments.

• The law ties “designated countries” to federal threat assessments and allows the Texas governor to add countries.
• The statute currently targets China, Russia, Iran, and North Korea, but the list could change.

Critics counter that the law’s reach is too broad and its day-to-day impact falls on people with lives and families here—especially Chinese nationals with legal status, job offers, or degrees from Texas universities.

Ongoing litigation

• CALDA (Chinese American Legal Defense Alliance) sued on July 3, 2025, arguing the law violates the Fourteenth Amendment and echoes historic bans like California’s 1913 Alien Land Law.
• A federal judge dismissed the case on August 18, 2025, citing threshold issues about direct harm.
• CALDA has appealed to the Fifth Circuit; the appeal is pending.
• Immigrant rights groups are recruiting plaintiffs, and the legal battle could continue for months or reach the U.S. Supreme Court.

While litigation proceeds, SB 17 remains in effect, influencing daily decisions by landlords, sellers, buyers, and companies.

Penalties and enforcement specifics

The state’s penalties are stark and include:

• Individuals: state jail felony—up to 2 years in jail and a $10,000 fine.
• Companies: civil suits for up to $250,000 or half the property’s value.
• In rem actions: the state can pursue the property itself (take and dispose of real estate) without personal notice to the owner.
• Attorney General: authority to investigate and press for divestment in state court.

These enforcement mechanisms increase legal risk and make risk assessment difficult for private buyers and large companies. Sellers and landlords, worried about liability, may overcorrect and screen out applicants who appear to be from designated countries—even if they are citizens, green card holders, or otherwise exempt. Legal experts warn this could prompt discrimination claims and further marginalize communities.

Practical examples and human impact

Real-life scenarios illustrate the law’s impact:

1. Example: A software engineer from Shanghai on an H‑1B finds a 12‑month lease near a good school in Austin but cannot sign a one‑year lease under SB 17. Shorter leases are rare and costly, pushing the family to pay premiums, share housing, or relocate to another state.

2. Example: A biotech startup with a minority investor from a designated country discovers that an indirect ownership interest could trigger SB 17, making a standard five-year lab lease impossible. The startup moves the project — and jobs — out of Texas.

These are not isolated hypotheticals; lawyers and advocates document similar patterns across housing, employment, and business investment.

Housing, business, and market consequences

Housing and leasing effects:

• The lease cap (no leases of one year or longer) is particularly disruptive.
• Families, students, and employees on multi-year programs typically need 12-month or longer leases for stability.
• Some landlords may switch to month-to-month leases at higher cost, but many will not, especially in tight markets.

Business and financing effects:

• Industrial and commercial leases often run 3–10 years; short terms are seldom feasible.
• Companies with ties to designated countries may avoid Texas for new facilities, offices, or research labs.
• Lenders may impose tighter loan conditions or decline borrowers with any links (direct or indirect) to entities from designated countries, slowing transactions and raising costs.
• Developers who rely on pre-leasing to secure construction loans may face difficulties if potential tenants have covered ties.

Real estate markets, already strained by high interest rates and low inventory, now face narrowed buyer pools, more complex screening, longer closing timelines, and added legal review.

Civil rights, historical parallels, and critics’ arguments

Immigration lawyers and fair housing advocates draw direct parallels to old alien land laws that restricted Asian immigrants’ ownership rights. Scholars warn SB 17 mirrors that history:

• Leo Yu (SMU Dedman School of Law) calls the trend a “revival of exclusion”, framing designations as a new route to block settlement and investment by people from targeted nations.
• Opponents argue SB 17 singles out groups based on national origin, raising equal protection and due process concerns—especially around property seizures without personal notice.

Supporters respond that the law targets foreign powers and networks, not individuals based on race, and they point to the homestead exception as mitigation for lawful residents intending to live in Texas.

Guidance for affected parties (clear summary)

What SB 17 means now:

• Effective date: September 1, 2025.
• Designated countries: China, Russia, Iran, North Korea (list can expand).
• Prohibited actions: Buying or gaining any interest in Texas real property, including partial ownership and leases of one year or longer.
• Exemptions:
  • U.S. citizens and green card holders — exempt.
  • Lawful visa holders may purchase one homestead if they intend to live there.
  • Leases shorter than one year — allowed.
• Penalties: Individuals up to 2 years in state jail + $10,000 fine; companies up to $250,000 or half the property value.
• Enforcement: Texas Attorney General can pursue in rem property actions and divestment in state court.

Practical legal advice being offered by attorneys:

• Avoid purchasing Texas real property unless you qualify for the homestead exception and intend to live there.
• Avoid signing leases of one year or longer without legal counsel.
• For sellers and landlords: implement clear, uniform screening processes, document exemptions, and keep careful records to avoid discrimination claims.
• For parties with complex or indirect ownership structures: seek legal advice before entering deals.

What to watch next

• The Fifth Circuit appeal and possible further appeals could reshape or halt the law’s enforcement.
• Courts will weigh state security claims against breadth and concrete harms to residents, students, and businesses.
• The final judicial outcome could guide other states considering similar laws and raise questions about federal preemption, equal protection, and due process.

Final takeaway

SB 17 redraws practical lines around land ownership and leasing in Texas. In the name of security, the law affects everyday housing and business transactions, with Chinese nationals especially prominent in public debate. Whether courts narrow, strike down, or leave the law intact will be decisive for Texas — and for other states watching closely as they shape their own policies. The months ahead will be critical for landlords, tenants, businesses, universities, and immigrant communities as they adapt to the law’s immediate effects and await judicial clarification.