Real estate advocacy group backs changes to foreign land-buying crackdown law

Tallahassee, Florida, USA at the Old and New Capitol Building.

The Real Estate Roundtable, a professional organization representing real estate ownership, development and management interests nationally, is backing proposed legislation in Florida that would revise a ban on Chinese nationals buying real estate in the state.

At issue is a bill (SB 814) clarifying existing law from previously passed legislation in 2023 (SB 264). The new bill aims to better define the term “foreign principal” and make clear that certain Chinese refugees and investors in residential development can own land in the state.

The bill is in response to problems the 2023 law created. Opponents to the law challenged it in federal court, but the Judge in that case did not block the law.

The proposed changes in SB 814 would leave language in statutes that bars the Chinese government itself from having a controlling interest in any Florida real estate, but it would provide a number of exceptions for individuals living in China.

In a letter to Senate President Kathleen Passidomo and House Speaker Paul Renner, The Real Estate Roundtable President and CEO Jeffrey DeBoer said this year’s bill “addresses national security concerns” while also allowing “passive non-U.S. investors to continue to invest in Florida real estate through U.S.-controlled managers.”

“SB 814 will aid the implementation efforts of this new law so that it does not prohibit major investments in the state, which are safe from control by foreign countries of concern and promote growth without sacrificing the security or economic interests of Florida,” he wrote.

Last year’s law created what SB 814 sponsor Sen. Clay Yarborough described as an unintended consequence, in that it blocked developers from buying land in Florida to build homes if they have foreign ownership in excess of 5%, according to previous reporting from Florida Politics.

“This displaced foreign passive partners in major real estate transactions in Florida, a passive partner does not pose a threat to national or state security,” Yarborough said.

“They merely provide financing. They have no input on the design, construction or day-to-day activities of residential home building. In Florida, we have a housing shortage and the prices of homes continue to increase. We need to ensure that homes continue to be built.”

DeBoer agrees.

“SB 814 includes clarifying language around the definition of ‘controlling interest’ in SB 264 which would outlaw any foreign investment that is able to direct the actions of an investor in the state,” he wrote

“It would limit foreign investment to passive limited partners who cannot direct or control the operations, management or investment decisions of the fund in relations to the underlying investments, nor would they have any information or access rights in relation to the day-to-day operations of the underlying investments, sensitive information or the personnel or property associated with such investments.”

DeBoer said the fix proposed this Legislative Session “preserves national security” focus that was intended in last year’s legislation, “while maintaining the state’s edge in economic development.”

DeBoer is asking lawmakers to support SB 814 “to help encourage major real estate investments in the state.”

As of this week, negotiations were ongoing between lawmakers and Gov. Ron DeSantis’ Office, according to sources who spoke with Florida Politics.

“The legislation I put forward maintains the toughest sanctions on China in the entire country, while providing the clarity companies controlled by American investors need to continue to contribute to our growing economy,” Yarborough said.

The bill is ready for a floor vote at any time, but sources told Florida Politics reporter Jacob Ogles talks are continuing between the Governor’s staff and the House.

Rep. Will Robinson, who is sponsoring the House counterpart bill to SB 814 (HB 799), said he expects his bill to land on the House floor soon, but he’s not ready to adopt Yarborough’s version in full.