AUSTIN — The governments, citizens and businesses of Russia, China and two other nations would be prohibited from buying real estate in Texas under legislation awaiting action by the state Senate that warns that such purchases might be harmful to national and state interests.
The measure, Senate Bill 147 by Brenham Republican Lois Kolkhorst, piggybacks on a 2021 law that bars those two nations, plus Iran and North Korea, from owning or controlling critical infrastructure projects in Texas. Kolkhorst said the legislation signed into law by Gov. Greg Abbott is good, but more action is needed.
“The growing ownership of Texas land by some foreign entities is highly disturbing and raises red flags for many Texans,” Kolkhorst said in a news release when she unveiled her legislation. “By comparison, as an American go try to buy land near a Chinese military base and see how it works out for you.”
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The 2021 law, named the Lone Star Infrastructure Protection Act, was introduced in response to numerous ransomware attacks by foreign entities, and to a December 2020 report that a Russian entity had hacked a computer network operated by the city of Austin.
The countries named in the measure were targeted because of “acts of aggression towards the United States, human rights abuses … and other hostile actions,” according to the Legislature’s official analysis of the bill.
The law was considered instrumental in thwarting plans by a company owned by Xinjiang-based real estate tycoon Sun Guangxin to build a massive wind energy farm on part of 130,000 acres he had purchased in Val Verde County near Laughlin Air Force Base in Del Rio.
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Texas ranks third in the nation as a destination for foreign entities seeking to purchase real estate in the United States, according to a 2022 report by the National Association of Realtors. However, except for China, the countries listed in Kolkhorst’s bill appear to have little or no footprint in Texas or in the nation as a whole.
China was third among the list of countries with entities that purchased property in the United States in 2021 and 2022, according to the Realtors’ report. Mexico and Canada ranked No. 1 and No. 2 both years.
However, Texas was not among the 15 top states where China had made land purchases last year, the report said. Most of the state’s foreign real estate investments came from Mexico, India and Colombia.
While the 2021 infrastructure measure passed without opposition in the Legislature, Texas real estate interest groups appeared to be taking a wait-and-see approach to the latest bill. While entities associated with China were not among the major foreign land buyers in Texas in recent years, some of their purchases have had major impacts.
According to a 2016 report by China Daily, a news outlet that is owned by that country’s Communist Party and has offices in the United States, Chinese-owned Tianqing Real Estate Development invested some $500 million to build a high-end, high-rise office complex on prime land near downtown Houston.
The project is called the Allen Lifestyle Pavilion and is a joint venture with Tianqing and Houston’s DC Partners. It opened its first phase in 2021 and as recently as late October was still adding new tenants, according to the Houston Chronicle.
DC Partners has touted the project as a major economic development catalyst for the region and has publicly thanked Houston Mayor Sylvester Turner for supporting the venture. But a spokesman for the company declined to weigh in when asked if the new legislation might put a damper on future investments in Texas.
Abbott, who was effusive in his praise for the 2021 law and called it “the first of its kind,” appeared equally enthusiastic for its sequel.
“I will sign it,” Abbott said in a recent tweet.
John C. Moritz covers Texas government and politics for the USA Today Network in Austin. Contact him at jmoritz@gannett.com and follow him on Twitter @JohnnieMo.