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The federal government this week announced a proposal to expand its control over, and ability to review, certain U.S. real estate sales to foreigners.
The proposal would expand an existing rule and give an entity known as the Committee on Foreign Investment in the United States (CFIUS) new power to review real estate sales near 56 military installations in 30 states. The CFIUS already reviews sales near some facilities, but the proposal would bring the total up to 227. A statement from the U.S. Department of the Treasury, which chairs CFIUS, stated that the expanded rule “would vastly expand the reach of CFIUS’s real estate jurisdiction, while maintaining its sharp focus on national security.”
Secretary of the Treasury Janet L. Yellen framed the proposal as a matter of national security.
“President Biden and I remain committed to using our strong investment screening tool to defend America’s national security, including actions that protect military installations from external threats,” Yellen said in the statement. “CFIUS plays an integral role in U.S. national security by thoroughly reviewing real estate transactions near sensitive military installations, and this proposed rule will significantly expand its jurisdiction and ability to accomplish this vital mission.”
Congress first gave CFIUS the power to review real estate deals near military installations in 2018. In addition to personnel from the Treasury Department, CFIUS members also come from the Department of Defense, the State Department, the Justice Department and other government agencies.
According to the Associated Press, the new rule comes after Biden, in May, blocked a Chinese cryptocurrency mining firm from owning land near a Wyoming nuclear missile base. The White House dubbed the firm’s would-be proximity to the base a “national security risk,” the AP reported.
The new rule also comes during a period of generally intensified scrutiny on foreign real estate buyers. Last year, for example, Florida put significant restrictions on foreign buyers from a handful of U.S. adversaries. The law then went on to generate significant controversy and legal wrangling.
Hawaii has similarly placed restrictions on foreign buyers.
In the case of the CFIUS proposal, the expanded rule would specifically give regulators jurisdiction over real estate transactions within a one-mile radius around 40 additional military installations, as well as jurisdiction over deals within a 100-mile radius around 19 additional military installations, among other things.
The proposal will be subject to a public comment period before going into effect.
