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Your Money Is No Good Here

State-level laws limiting the purchase of American land by our rivals may be the best compromise between economic freedom and national security.

(By Orhan Cam/Shutterstock)

A half century ago, the small Cuban town of Bejucal came to American attention when it was discovered that the Soviet Union had installed nuclear weapons there, just 167 miles from Florida. President Kennedy imposed a naval quarantine against Cuba, and Nikita Khrushchev removed the Soviet Union’s missiles in exchange for a secret agreement by the U.S. to remove comparable weapons from Turkey.  

Bejucal is in the news again as the People’s Republic of China has allegedly retrofitted the Soviet-era facility to intercept U.S. electronic communications. This comes at a time when China has supplanted the former Soviet Union as America’s chief geopolitical rival, and has sent a high-altitude surveillance balloon over the nation’s intercontinental ballistic missile silos.


The federal government has not responded to these perceived threats to national security, but several states have passed or are considering laws that limit purchases of American land by buyers deemed representatives of China and other countries hostile to U.S. interests. These laws cover property close to military bases and critical infrastructure, such as electric power plants. Florida is further along than others with the passage of a law that regulates purchases of the foregoing types of property, as well as farmland.  

Are such laws prudent measures to protect the nation’s security, or an exercise in paranoid guilt-by-association?

The Department of Justice has taken the position that the Florida law violates the federal Fair Housing Act and the Equal Protection Clause of the U.S. Constitution because it discriminates on the basis of national origin. Discrimination on this basis can survive a legal challenge if the restriction responds to legitimate safety concerns, and Florida officials say the purpose of the law is to prevent foreign nations from “controlling Florida’s agricultural land and lands near critical infrastructure.”  

The Department of Justice argues in a “statement of interest” filed in a suit challenging the law that these justifications are insufficient, claiming that the state hasn’t explained how prohibiting individuals from owning real estate in Florida achieves these aims. (The Florida law does not, in fact, prohibit Chinese individuals from purchasing Floridian real estate outright; it permits individual ownership of one residence on a parcel of up to two acres, and minimal indirect interests, such as through stock ownership.)

The authorities cited by the Department of Justice miss a larger issue: Under the American system of government, may legislatures assert control over domestic property owned by hostile nations? On this point, the law at the federal level is that the United States acting through Congress has the power to confiscate property of enemies within its boundaries separate and distinct from its power to declare war.  


The first case to rule thus was Brown v. United States in 1814. The owner of a shipment of cargo sued when the shipment was seized as property of the enemy pursuant to an embargo approved by Congress on the eve of the War of 1812. The U.S. Supreme Court ruled that Congress had “an independent substantive power, not included in that of declaring war,” to do so under Article I of the Constitution, which authorizes it to “make Rules concerning Captures on Land and Water.”  

While the two powers are independent, the power to seize property of aliens flows from the power to declare war. Under the rule of statutory construction that the greater includes the lesser, often invoked by Justice Oliver Wendell Holmes, Congress has accordingly authorized the executive branch to take actions less drastic than seizure; it has restricted trade with hostile nations in times of war by the Trading with the Enemy Act, and when the nation is not at war, by the International Emergency Economic Powers Act.  

The Supreme Court has recognized that the federal government has jurisdiction over the nation’s foreign affairs, but this broad grant comes with limits. In a 1947 case the court upheld a California law that denied an inheritance of real estate to six German nationals because German law did not grant reciprocal rights to Americans. While a subsequent case involving property in Oregon was decided the other way, the scope of the federal prerogative in this area comes down to whether the federal government has preempted the field; that is, in areas of traditional state jurisdiction where there is no conflicting federal policy, state law prevails.  

The federal government hasn’t argued preemption in the case of the Florida law, leaving the field open to the states. With the purchase of 52,000 acres of land around Travis Air Force Base in California, where the largest wing of the Air Force’s Air Mobility Command is based, by a group suspected of being a conduit for the People’s Republic of China, its hand may be forced.

The Constitution limits states’ ability to engage in hostilities with foreign powers under Article I, Section 10, unless they are “actually invaded, or in such imminent Danger as will not admit of delay,” but a law regulating purchases of real estate is not the equivalent of war. At least one Founding Father—Thomas Jefferson—thought the states possessed inherent power over alien ownership of land: “By our laws,” he wrote in Query XVI of his Notes on the State of Virginia, “lands acquired or held” by alien enemies were forfeited. This power over the quintessential subject of local regulation—ownership of land—would be retained by the states under the Tenth Amendment to the Constitution, which provides that “the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

The Cuban Missile Crisis was defused by steps less drastic than those that could have triggered a nuclear conflict: President Kennedy declared a “quarantine” that prohibited only shipments of offensive military equipment, rather than a blockade, which would have applied to all trade and travel and would have been considered an act of war. In similar fashion, the use of state laws to prevent foreign powers from purchasing strategically-important property could defuse a showdown with China before it began.

America is an open society, and as a result has been caught off-guard by hostile nations before—on 9/11, at Pearl Harbor, even as long ago as the War of 1812, when British troops burned the White House and the Capitol. The failures of the past do not bind our hands in the present, however. As Jefferson wrote in an 1810 letter, “A strict observance of the written laws is doubtless one of the high duties of a good citizen, but it is not the highest. The laws of necessity, of self-preservation, of saving our country when in danger, are of higher obligation.”