Homeownership Just Got A Little Harder For These People


I hope everyone had a good week!
The good news? Today is my birthday.
The bad news? I shattered my pinky finger playing basketball. When it happened, I just thought it was dislocated, so I’ve been yanking on it for 10 days which hasn’t helped. Turns out I’m going to need some screws.
This is going to be detrimental to my typing speed, so expect these be a bit shorter for a few weeks….and maybe some misspelled words.

The Chinese Cannot Pass Go And Cannot Collect $200

China came into the public limelight at the tail end of the Trump Administration for COVID, and more recently with some of the balloon nonsense that has taken place.
But now there’s another Republican targeting them: Ron DeSantis, who announced his 2024 presidential bid on Wednesday.
And DeSantis has been a busy, busy guy. First getting involved in a lawsuit against Disney’s special district which I wrote about here, then launching his presidential campaign, and now getting sued by Chinese citizens over the law he signed preventing them from owning houses in Florida.

Some Background

DeSantis has been signing bills left and right, and some notable ones at that. In just the past few weeks, he has signed bills supporting the “Don’t Say Gay” movement, bills that target Disney, and even a bill that makes it easier for him to run for president by allowing him to do so while still being Governor (“Resign-to-Run”).
It’s likely that most of these bills will be leveraged to boost his presidential resume, but nevertheless there are real implications.
One, in particular, has caught the public eye as of recently: SB 264. This law restricts Chinese citizens who are not United States citizens from purchasing houses in Florida.
It also holds similar restrictions for Cuban, Venezuelan, Syrian, Iranian, Russian and North Korean citizens, but when asked about it DeSantis stated that it will “help protect Florida from the Chinese Communist Party.
And the Chinese citizens working in Florida didn’t like that one bit.
So, they’re suing the state for discriminatory and racial biases against Chinese Americans, while undermining their financial security.


Why Would They Want Houses Anyway?

Besides China, Russia, North Korea, and some other countries that operate similarly, people typically don’t need to hold citizenship within a country to buy a house there.
For example, if you want a house in Paris, then you can go buy a house in Paris. Want to move to London? Go buy a house in London. In many instances you wont even need a visa.
In addition to personal interest, there are many financial reasons people may want to buy a house in a different country. Let’s take a Chinese citizen who wants to buy a house in Florida:
  • Better housing market: Like I said in a previous piece, China is trying to prop up their labor market by continuing to build houses. At this point there are more houses in the country than there are people, creating a huge inventory surplus and leading house price to decline over time. Because of this, and the decreasing population in China, the housing market is not nearly as stable as it is in the US. The US is facing a housing deficit, meaning there is a higher demand for houses (specifically affordable housing) than there is currently supply for. So, from an investment standpoint, it is much safer, and smarter, to buy a house in Florida than China. (Note the axes)
  • In-state Tuition: The number of international students coming to the US to pursue college degrees and enroll in our world class educational system is increasing nearly ~80% year over year. Everyone knows the rich family who buys a vacation home in the state where their kid goes to school to save money on tuition, I can’t imagine it’s much different for Chinese students.
  • Taxes: Relative to the rest of the US, Florida is attractive for tax reasons. Having no state income tax, it’s beneficial to establish residency there.
  • Just live and work there: For a majority of the Chinese citizens, I assume that they just live and work in Florida, and that buying a house is part of their plan to start/build a life in the US. Buying a home is often a natural progression in life associated with forced savings, having kids, and settling down. This bill would prevent any citizens, simply in Florida to work, the right to buy a home.


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Final Thoughts

This law is scheduled to go into effect July 1st, so I would expect there to be movement on this front before then. My guess is that the law will be postponed until the legal battle concludes or repealed if the state loses.

Regardless, this is an interesting case to investigate. I assume it will come up in the DeSantis campaign as an example of how he “cracked down on communism” or something, but it is a novel law that other red states are beginning to consider.

That’s it. Let’s have ourselves a weekend!

from, matt

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