Ensuring that the American middle class has steady access to homeownership, therefore, should be a top priority of our elected officials. That’s part of the reason it is so concerning that international buyers purchased $59 billion worth of residential properties in the United States from April 2021 to March 2022, according to the National Association of Realtors (NAR) report. The average sale price of $598,200 and median purchase price of $366,100 for international buyers were the highest levels ever recorded by the NAR. According to the report, China, Canada, India, Mexico, and Brazil were home purchasers’ top five countries of origin, and the top states for these purchases were Florida, Texas, Arizona, New York, and North Carolina. China in particular continued its trend as the leading nation for purchasers of U.S. homes, spending $6.1 billion last year. China has been the top foreign buyer of U.S. real estate since 2015, accounting for nearly 14 percent of all purchasers!
This foreign acquisition—by China in particular—poses both an economic danger and a national security threat to our country and middle class. According to Wharton researchers, foreign purchases have been shown to exacerbate problems with housing affordability problems, and the acquisition of our lands and properties by geopolitical rivals poses grave questions for national security.
A key priority for our political leaders should be enacting common-sense measures to restrict foreign acquisition of America’s housing stock. The positive effects of such a policy would be two-fold. First, the economic pressures on the housing market will subside by reducing the demand for housing by removing foreign purchasers from the market. This would help ease the housing crisis in our country and allow the middle class greater economic access to homeownership opportunities. Second, restricting foreign nations from purchasing U.S. homes will improve national security, so we can better ensure that hostile actors are not using these purchases to spy on us, disrupt our markets, or manipulate our nation in any other manner.
For this very reason, some states are already moving to restrict or ban foreign acquisition of U.S. real estate. Florida and Texas have already taken steps to restrict Chinese purchases of certain properties in the interest of national defense. Alabama, Montana, and Louisiana are all considering measures to do the same.
While critics have called these bills “xenophobic” and “discriminatory,” there is nothing xenophobic about political leaders putting the needs of their own citizens, rather than those of other nations. These policies are not targeting Chinese individuals because they are Chinese; they are instead restricting Chinese-linked individuals from accessing American real estate because of the specific concerns with China using these locations to operate in a way that is hostile to the U.S. Just this week, it was revealed that China is building a base in Cuba to spy on America, and it is naïve to think that they would not use their properties in the United States to do the same.
Furthermore, these restrictions are in line with longstanding U.S. policy, governed by the Council on Foreign Investment in the United States (CFIUS). This council is meant to protect legitimate national security interests when it comes to foreign investments in our nation, and these sorts of legislative actions help further this mission. Rather than targeting individuals in a fit of misguided xenophobia, these purchase restrictions on Chinese nationals will help mitigate a real threat posed by a foreign adversary.
To rebuild America’s middle class and counter the influence of hostile foreign nations in our homeland, America’s governors and other elected leaders would be wise to restrict the purchase of U.S. real estate by non-citizens—no matter the slurs that are hurled their way.