Real Property Law Archives – Southern California Law Review

Property and Prejudice

April 2025April 2025Fatma Marouf* & Vanessa Casado Pérez†

“Alien land laws”—laws restricting noncitizens from owning real property—are back. A dozen states have enacted such laws during the past year, and over thirty states have considered such bills. These new bills are rooted in xenophobia, much like their predecessors, but they also have unique characteristics. They single out governments, citizens, and corporations of specific countries perceived to pose a threat; they impose ownership restrictions based on arbitrary distances to U.S. military bases and critical infrastructure; they inflict particularly harsh penalties; and they try to ferret out foreign control in complex corporate structures. The purported justifications are national defense, food security, and prevention of absentee ownership. But these laws completely fail to achieve their asserted goals. The poor means-end fit, combined with the availability of far less restrictive alternatives, leaves the new laws vulnerable to legal challenges under the Equal Protection Clause and the Fair Housing Act. But century-old Supreme Court precedents and gaps in legal doctrine may still make it difficult for such challenges to prevail. Preemption arguments based on immigration law, the foreign affairs power, and federal laws governing foreign investment, as well as Dormant Commerce Clause arguments, also involve legal hurdles. This Article analyzes these legal arguments, evaluates potential obstacles, and charts possible paths forward. Regardless of the legal viability of these laws, this Article cautions that they will perpetuate prejudice, open the door to a new form of segregation, and limit who can achieve the American Dream.

INTRODUCTION

Sun Guangxin, a Chinese real estate tycoon, owns 140,000 acres of land in Val Verde County, Texas, near an Air Force base close to the border.¹ He spent approximately $110 million on real estate purchases, paying above-market prices for plots that were not on the market.² But Mr. Sun did not buy this land himself. He used a Texan intermediary, who bought the land and transferred it to Mr. Sun’s company, GH America Energy LLC, a subsidiary of the China-based Guanghui Energy Company.³ The plan was to establish a wind farm and produce renewable electricity for the Texas grid.⁴

Environmentalists opposed the wind farm, but their concerns did not gain traction until they framed the wind farm as a threat to national security due to its location.⁵ That got the attention of Senator Ted Cruz and state legislators, who began campaigning against the wind farm.⁶ This campaign became a catalyst for several bills in Texas that restricted foreign ownership of land.⁷ The bill that received the most traction prohibited real property ownership by any businesses headquartered in China, Iran, Russia, and North Korea or owned or controlled by citizens of those countries, as well as by individual citizens and government actors from those countries.⁸

Texas is not alone. In the past year, bills have been proposed in over thirty states that would restrict foreign ownership of land, real estate, and natural resources.⁹ To date, a dozen of them have been enacted into law.¹⁰ Many of these laws single out specific countries perceived to be hostile, including, but not limited to, China, Iran, Russia, and North Korea. Some bills name countries directly, while others reference various federal designations, such as federal lists of “foreign adversaries” and “countries of particular concern.”¹¹ A few bills are a bit more subtle, restricting ownership by “state-controlled enterprises,” which are most common in China,¹² or citing statutes that address only Chinese military companies.¹³

These laws fan the flames of rising anti-Chinese sentiment. Over 80% of the U.S. population currently holds an unfavorable view of China.¹⁴ Fear of China’s economic and military power,¹⁵ disapproval of China’s foreign policies and human rights abuses,¹⁶ media reports blaming China for the COVID-19 pandemic,¹⁷ and angst over espionage,¹⁸ as well as explicit or implicit biases,¹⁹ fuel these views. Of course, most Chinese investors seeking to buy property in the United States are not acting as pawns of the Chinese Communist Party. Instead, they may be families trying to move their money beyond the reach of the Chinese government, investing to ensure that their children get a good education, or hoping to establish themselves in the United States.

Despite the new context, these laws conjure up one of the darkest periods of U.S. immigration history, involving Chinese Exclusion²⁰ and an Asiatic Barred Zone that swept across a continent.²¹ The history of alien land laws is intertwined with racial exclusions from U.S. citizenship and the creation of hierarchies based on race, national origin, and alienage.²² As California’s Attorney General said in 1913 when he championed the state’s alien land law aimed at limiting the presence of Japanese immigrants: “[T]hey will not come in large numbers and long abide with us if they may not acquire land.”²³ A century ago, the U.S. Supreme Court upheld California and Washington’s alien land laws, and it has never revisited the issue.²⁴ These lingering precedents from an unabashedly racist era are now being relied on by states eager to stretch the limits of traditional state powers like regulating the transmission of property and to influence the federal domains of immigration, national security, and foreign affairs.

This new wave of alien land laws differs from prior waves in important respects.²⁵ First, the naming of specific countries and use of certain federal lists reflects a new form of national security creep. This national security slant also appears in the heightened restrictions placed on property located within a certain distance of critical infrastructure, such as military bases and weather stations. While some states have found ten miles to be a safe distance, others require fifty miles, suggesting an arbitrariness to the restrictions imposed. The new laws also seek to ferret out foreign control in more complex corporate structures than ever before. And they punish violators with harsher criminal penalties than in the past.

While the laws purport to protect national security and food security, and to prevent absentee landownership, they are poorly designed to achieve these aims. Foreign ownership of U.S. real property is minimal. Only 2.9% of privately held agricultural land²⁶ and 1.8% of residential real estate²⁷ is foreign-owned. Additionally, the major foreign owners of agricultural land are not from the countries targeted by the new state laws. While China is second only to Canada on the list of foreign countries whose citizens are buying U.S. residential properties,²⁸ their share of US land is very small. Foreigners own 31% of the land in the U.S., but Chinese investors represent only 1% of all foreign-owned land.²⁹

But even assuming there are compelling government interests at stake, the means used to achieve them are ineffective. These laws will not solve the problem of foreign interests and corporate consolidation driving the real estate and agricultural markets, as sophisticated players can easily circumvent the restrictions. For example, because most of the laws do not restrict leases, a foreign-owned business could just lease land from local landowners. The restrictions on landownership will also not increase national security in an era of cyber warfare, drones, and spy balloons. Furthermore, some of these alien land laws target only ownership and not leases. A tenant occupying a property near a military base can be as dangerous as the owner of that land, if not more. This new wave of alien land laws also fail to prevent absentee landownership because they generally exempt noncitizens residing in other U.S. states, along with all U.S. citizens and permanent residents regardless of their location. Less restrictive alternatives to some of the proposed or enacted laws could include simply limiting the amount of land that foreigners may own, requiring owners to reside or work on the land to avoid absentee ownership, or creating exceptions for residences if the main concerns are agriculture and food.

Given the poor means-end fit, the true purpose of the laws appears to be symbolic. These laws may simply be a way for politicians to capitalize on the xenophobic sentiments of their electoral base. Sadly, their nefarious social effects will extend well beyond the real estate market.³⁰ Like racist property restrictions of the past, the new laws will subordinate minorities. Excluding people from home ownership keeps them out of communities, deters immigration, impedes intergenerational transfers of wealth, and obstructs personal flourishing. Even people who are not directly affected by the new laws will suffer due to the chilling effect on the real estate market. Sellers will be hesitant, at best, to engage in transactions with anyone from a targeted country.

This Article examines potential legal challenges to the new wave of alien land laws. Part I provides historical background about prior waves of alien land laws. Part II describes the distinctive characteristics of the current wave. Part III explores possible statutory and constitutional arguments for challenging the new laws. First, Part III explores whether these laws violate the Fair Housing Act, which was enacted as part of the Civil Rights Act of 1968 and prohibits discrimination in housing based on race and national origin.³¹ Second, Part III examines whether the new laws violate the Equal Protection Clause, highlighting the underdeveloped nature of equal protection jurisprudence on alienage and national origin classifications. This Section also stresses the lack of means-end fit, which we argue should result in the laws being struck down under either strict scrutiny or rational basis review.³² Next, this Article analyzes whether the new state laws are preempted by federal immigration law, the federal foreign affairs power, or the federal regulatory framework involving the Committee on Foreign Investment in the United States (“CFIUS”).³³ Finally, this Article analyzes whether the new laws violate the Dormant Commerce Clause with respect to both domestic and foreign commerce.

Legal challenges to the new alien land laws will not be easy. A federal district court has already refused to enjoin Florida’s law, which not only restricts individuals and companies domiciled in certain countries but also singles out those domiciled in China for especially harsh treatment.³⁴ The legal questions raised by alien land laws will likely reverberate in other important contexts as well. States like Texas and Florida are increasingly looking for ways to use well-established state powers, including police and property powers, to challenge the federal government’s authority over international borders and immigration.³⁵ Alien land laws represent one, but by no means the only, way for states to do this. If no restrictions are placed on alien land laws by courts or the federal government, states could use them to create new forms of segregation, excluding immigrants from their territories by denying them a place to live. In short, these laws once again instrumentalize property for racial prejudice.

I. A BRIEF HISTORY OF ALIEN LAND LAWS

Alien land laws in the United States date back to colonial times and to the influence of the English feudal system.³⁶ English feudal laws were designed to secure allegiance to the Crown and initially prohibited aliens from purchasing land; then, the laws prohibited them from inheriting it.³⁷ England eventually abolished those restrictions by statute in 1870.³⁸ But alien land laws continued in the United States, sanctioned by common law.³⁹ Some early land laws were incorporated into state constitutions in explicitly racial terms. For example, in 1859, Oregon amended its constitution to prevent any “Chinaman” from owning property in the state and granted only “white foreigners” the same property rights as citizens, a provision that was not repealed for over one hundred years.⁴⁰

Scholars have previously categorized alien land laws into several waves.⁴¹ During the first wave, which extended from approximately 1880 to 1900, eleven states restricted alien ownership of real property in response to a depressed agricultural economy and concerns over absentee landowners.⁴² Congress also passed the Territorial Land Act of 1887, which “forbade extensive alien landholding in the organized territories, except by immigrant farmers who had applied for citizenship.”⁴³ The federal law aimed to prevent large, foreign-owned ranches from jeopardizing statehood for the territories.

The second wave of alien land laws were passed in the 1920s, as a result of resentment toward Japanese immigrants engaged in farming in California, Oregon, and Washington.⁴⁴ California’s law “was enacted and . . . enforced solely as a discriminatory law directed against the Japanese.”⁴⁵ California’s Attorney General at the time, Ulysses S. Webb, was transparent about its purpose, framing the central issue as “race undesirability.”⁴⁶ The California law carried criminal penalties and resulted in successful prosecutions;⁴⁷ it also led to severe financial losses with over 30,000 Japanese farmers abandoning “nearly 500,000 acres of California’s richest crop lands.”⁴⁸ Beyond these penalties, the law had a severe psychological impact, demoralizing and subordinating Japanese Americans.⁴⁹

Alien land laws passed at this time often excluded Japanese and other Asians by precluding noncitizens “ineligible for citizenship” from owning land.⁵⁰ As Keith Aoki observed, “ ‘aliens ineligible to citizenship’ was a disingenuous euphemism designed to disguise the fact that the targets of such laws were [Japanese].”⁵¹ Laws dating back to 1790 and 1870 excluded Asians from naturalizing.⁵² In 1922, the U.S. Supreme Court confirmed that a Japanese person could not be naturalized because he was not “white.”⁵³ The following year, the Court reached the same conclusion regarding someone from India.⁵⁴

That same year—1923—the U.S. Supreme Court upheld Washington’s and California’s alien land laws.⁵⁵ Both cases involved U.S. citizens who wanted to lease land to Japanese farmers. In Terrace v. Thompson, the Court reasoned that Washington had “wide discretion in determining its own public policy and what measures are necessary for its own protection and properly to promote the safety, peace and good order of its people.”⁵⁶ The Court explained that “in the absence of any treaty provision to the contrary, [a state] has power to deny to aliens the right to own land within its borders.”⁵⁷ Similarly, in Porterfield v. Webb, the Court found California’s law limiting property rights to those “eligible to citizenship” to be constitutional.⁵⁸ Two other U.S. Supreme Court cases decided that year upheld laws restricting the transfer of shares of a landowning corporation to aliens⁵⁹ and prohibiting food crop contracts with aliens.⁶⁰

But Supreme Court decisions issued in 1948 cast doubt on whether Terrace and Porterfield remained good law. In Oyama v. California, the Court invalidated a provision of California’s alien land law that deprived a U.S. citizen of Japanese descent of agricultural land paid for by his father.⁶¹ The Court found that the state had failed to offer any compelling justification for discriminating against a citizen “based solely on his parents’ country of origin.”⁶² The Court recognized that restrictions based on ineligibility for citizenship constituted discrimination based on “racial descent.”⁶³ That same year, in Takahashi v. Fish and Game Commission, the Court declared unconstitutional a California law that allowed only U.S. citizens to get fishing licenses, which was aimed at discouraging Japanese immigrants from returning to the state after their exclusion from the West Coast and internment.⁶⁴ Justice Black, writing for the Court, explained that “the power of a state to apply its laws exclusively to its alien inhabitants as a class is confined within narrow limits.”⁶⁵

In the years following Takahashi, the supreme courts of Oregon, California, and Montana invalidated those states’ alien land laws, recognizing their racist nature and finding them unconstitutional.⁶⁶ The Supreme Court of California opined that the law imposed on noncitizens “an economic status inferior to that of all other persons living in the state. ”⁶⁷ Other states decided to simply repeal their laws.⁶⁸ The Immigration and Nationality Act of 1952, which made naturalization race-neutral, rendered meaningless any remaining state laws that still tied property ownership to eligibility for citizenship.⁶⁹ But various other types of alien land laws remained. For example, in 1943, Wyoming had enacted an alien land law that prohibited Japanese Americans who had been in internment camps from buying land in the state, which was not repealed until 2001.⁷⁰

During the Cold War, a third wave of state laws emerged limiting the rights of foreigners to receive land by inheritance.⁷¹ The purpose of these laws was to keep U.S. wealth from communist regimes rather than to prevent noncitizens from owning land.⁷² This practice ended after the U.S. Supreme Court’s 1968 decision in Zschernig v. Miller, which invalidated an Oregon statute that conditioned a noncitizen’s inheritance right on reciprocal rights being granted to U.S. citizens.⁷³ The Court found that the Oregon law was preempted because it intruded on the federal government’s authority over foreign affairs.

A fourth wave of alien land laws occurred during the 1970s in response to media reports of increased foreign investment in U.S. farmland.⁷⁴ These laws generally restricted the type and amount of land that noncitizens could purchase. Media reports stoked fears that family farmers in the U.S. were threatened by foreign investment.⁷⁵ In 1972, the Wisconsin Supreme Court upheld an alien land law with “no racial implications” that restricted only the amount of land that could be owned by foreign investors, finding the law “sufficiently related to the state’s asserted desire to limit possibly detrimental absentee land ownership.”⁷⁶

The current wave of land laws has much in common with these prior waves. Anti-immigrant biases, xenophobia, and fears regarding the fate of family farmers all appear to be playing a role. But as discussed below, the new bills and law also have their own distinct characteristics.

II. RECENT BILLS AND LAWS: THE FIFTH WAVE

The fifth wave of alien land laws began around 2020 and rapidly gained momentum. In 2022 and 2023, dozens of bills were proposed across the country restricting the ownership of real property by individual noncitizens, foreign companies, and foreign governments.⁷⁷ To date, twelve of those bills have been enacted into law in Alabama, Arkansas, Florida, Idaho, Indiana, Louisiana, Montana, North Dakota, Oklahoma, Tennessee, Utah, and Virginia. These laws, like their predecessors, vary widely, both in terms of whom they restrict and what is restricted.

Some of the newly enacted laws focus on foreign governments and businesses rather than individuals.⁷⁸ Among the laws that apply to individual noncitizens, most restrict only “non-resident aliens,” while exempting “resident aliens.” Residence in this context generally refers to domicile in the United States,⁷⁹ but a couple of laws define a “resident alien” to mean a noncitizen who lives in the state.⁸⁰ Some of the laws require “resident aliens” to dispose of their real property within a certain amount of time if they no longer qualify as residents of the state.⁸¹

Other laws turn on immigration status rather than residence. For example, Louisiana’s law exempts anyone “lawfully present” in the U.S.⁸² Tennessee’s definition of a “sanctioned nonresident alien” explicitly excludes legal permanent residents.⁸³ North Dakota, like Minnesota, exempts not only legal permanent residents but also noncitizens who enter with certain types of temporary investor or trader visas that are available only to citizens of specific countries that have special treaties with the United States.⁸⁴

Like prior waves, many of the new laws place restrictions specifically on agricultural land and other natural resources.⁸⁵ Some are even more specific. Indiana, for example, has prohibited foreign business entities from owning agricultural land for the purpose of crop farming or timber production.⁸⁶ However, there are also novel types of restrictions. Notably, many of the new laws restrict ownership of land within a certain distance of a military installation or other “critical infrastructure.”⁸⁷ Other bills and laws apply broadly to any type of land or real property.⁸⁸

The following Sections take a closer look at some of the distinct characteristics of the new wave of alien land laws and proposed bills. These include singling out specific countries or nationalities by name, focusing on foreign adversaries, prohibiting landownership within a certain distance of military installations or critical infrastructure, focusing on agricultural land, imposing more severe penalties for violations, and targeting all types of foreign control in complex corporate structures.

A. Singling Out Specific Countries

Bills proposed in at least a dozen states (including Alabama, Arkansas, Colorado, Iowa, Florida, Georgia, Maryland, Mississippi, South Carolina, Texas, West Virginia, and Wyoming) singled out specific countries for property restrictions.

For example, Alabama enacted a law that defines a “foreign country of concern” as “China, Iran, North Korea, and Russia.”⁸⁹ Bills considered in Arkansas,⁹⁰ Georgia,⁹¹ and Texas⁹² similarly placed restrictions on citizens of these four countries. In Colorado, West Virginia, and Wyoming, proposed bills placed restrictions on citizens of China, Russia, or any country designated as a “state sponsor of terrorism.”⁹³

Florida enacted an alien land law that defined a “foreign country of concern” to mean China, Iran, North Korea, Russia, Cuba, the Venezuelan regime of Nicolás Maduro, and Syria.⁹⁴ Florida’s law is harshest, however, on citizens of China, placing more severe restrictions on them and subjecting them to stiffer penalties for violating the law.⁹⁵ A bill proposed in Arizona included the same seven countries on Florida’s list plus Saudi Arabia.⁹⁶ The Arizona bill emerged after a Saudi Arabian company made headlines for leasing Arizona public lands and pumping exorbitant amounts of groundwater to grow alfalfa for export to Saudi Arabia.⁹⁷

Many other bills singled out China alone, including bills proposed in Iowa,⁹⁸ Maryland,⁹⁹ Mississippi,¹⁰⁰ South Carolina,¹⁰¹ and Washington.¹⁰² Two Arizona bills,¹⁰³ as well as a bill proposed in Hawaii,¹⁰⁴ refer specifically to the Chinese Communist Party and its members. A Utah bill indirectly references Chinese companies by defining a “restricted foreign entity” as a company that the Secretary of Defense is required to report as a military company, which includes only Chinese military companies.¹⁰⁵ The intense focus on China across so many of these bills and laws is reminiscent of the anti-Asian sentiment that fueled alien land laws long ago. Alien land laws singling out specific countries are less likely to pass constitutional muster than more evenhanded laws.¹⁰⁶

B. Targeting Foreign Adversaries

Prior to the most recent wave, only five states had alien land laws that restricted land ownership by citizens of foreign adversaries.¹⁰⁷ None of those laws explicitly referred to foreign adversaries, much less attempted to name them. Instead, they benignly extended equal property rights to “alien friends” (New Jersey),¹⁰⁸ “[a]liens who are subjects of governments at peace with the United States and this state” (Georgia),¹⁰⁹ or any alien who is “not an enemy” (Kentucky, Maryland, and Virginia).¹¹⁰

In 2023, however, numerous state legislatures considered or passed laws restricting property ownership rights of citizens and companies of countries designated by the federal government as hostile to the U.S. or its values in some way. These bills and laws use various federal lists that were created for completely different purposes.

Laws enacted in Louisiana,¹¹¹ North Carolina,¹¹² and Virginia,¹¹³ as well as bills proposed in Kansas,¹¹⁴ Montana,¹¹⁵ Ohio,¹¹⁶ South Carolina,¹¹⁷ and Wisconsin,¹¹⁸ refer to the Secretary of Commerce’s designation of certain countries as “foreign adversaries” in the Code of Federal Regulations.¹¹⁹ This designation is based on the Secretary’s determination that a foreign government or foreign nongovernment person has “engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or security and safety of United States persons.”¹²⁰ Currently, this designation applies to six countries: China (including Hong Kong), Cuba, Iran, North Korea, Russia, and “Venezuelan politician Nicolás Maduro (Maduro Regime).”¹²¹

The Ohio bill and Louisiana law restrict not only “foreign adversaries” as defined by Secretary of Commerce but also the much longer list of foreign governments sanctioned by the Office of Foreign Assets Control (“OFAC”), which adds Afghanistan, Belarus, Burma, Central African Republic, Democratic Republic of Congo, Ethiopia, Iraq, Lebanon, Libya, Mali, Nicaragua, Somalia, Sudan, South Sudan, Syria, Yemen, and Zimbabwe.¹²² A law enacted in Tennessee, on the other hand, refers to citizens of foreign governments sanctioned by OFAC but does not include “foreign adversaries” designated by the Secretary of Commerce.¹²³

Other bills and laws refer to various U.S. State Department designations. For example, a bill proposed in New York¹²⁴ refers to a “foreign country of particular concern,” which currently includes twelve countries designated by the State Department: Burma, China, Cuba, Eritrea, Iran, North Korea, Nicaragua, Pakistan, Russia, Saudi Arabia, Tajikistan, and Turkmenistan. Bills proposed in Colorado, West Virginia, and Wyoming reference a completely different U.S. State Department designation—“state sponsors of terrorism”—a list that currently includes only four countries: Cuba, Iran, North Korea, and Syria.¹²⁵

States have also incorporated other federal definitions into their bills and laws. For example, the law passed in Arkansas references not only foreign countries of “particular concern” but also includes citizens or residents of countries subject to the International Traffic in Arms Regulations.¹²⁶ Meanwhile, a bill proposed in Texas referred to countries identified by the United States Director of National Intelligence as posing a risk to the national security of the United States in each of the three most recent Annual Threat Assessments of the U.S. Intelligence Community.¹²⁷ At least one law, enacted in Indiana, does not refer to federal definitions at all and instead allows the governor to designate certain countries as a threat to critical infrastructure.¹²⁸

A few of the proposed bills simply make vague references to “hostile” countries without providing a clear definition of the term. For instance, a Mississippi bill restricts ownership by “citizens of a country that is hostile to the interests of the United States or a country that is a known violator of human rights,” without explaining how such countries should be identified.¹²⁹ Similarly, a Hawaii bill that restricts land ownership by members of the Chinese Communist Party also refers to “other hostile foreign influence,” providing only a vague definition of this term.¹³⁰

C. Proximity to Military Installations and Critical Infrastructure

Additionally, many of the recent bills and laws limit landownership near military installations or other critical infrastructure. Considerable variation exists among the bills regarding what types of facilities are included under these terms as well as what constitutes an acceptable distance from them.

For example, a bill proposed in California prohibits foreign actors from owning or leasing land within fifty miles of a U.S. military base or California National Guard Base.¹³¹ A bill proposed in Louisiana restricts foreign ownership of “immovable property located within [fifty] miles of any federal or state military land, . . . weather station[], . . . or any facility operated by the Civil Air Patrol.”¹³² A bill proposed in Mississippi prohibits nonresident aliens from owning land within fifty miles of a military installation under the jurisdiction of the Department of Defense, the U.S. Coast Guard, or the Mississippi National Guard.¹³³ A South Carolina bill prohibits companies owned by China or the Chinese Communist Party, or whose principal place of business is in China, from controlling any land or real estate “within fifty miles of a state or federal military base or installation for the purpose of installing or erecting any type of telecommunications or broadcasting tower.”¹³⁴

Bills proposed elsewhere specify shorter distances from military installations. For example, a Georgia bill prohibits nonresident aliens from possessing any land within twenty-five miles of any military base, military installation, or military airport.¹³⁵ A North Carolina bill prohibits adversarial foreign governments from purchasing or holding land within twenty-five miles of a military base or airport.¹³⁶ The law enacted in Florida generally prohibits foreign land ownership within ten miles of a military installation or critical infrastructure facility.¹³⁷ Florida’s choice of ten miles is particularly interesting given that the legislative history indicates that a major concern was a Chinese company’s purchase of land located twelve miles from an air force base in North Dakota.¹³⁸ Meanwhile, a bill proposed in Hawaii considered just two miles from federal land or critical infrastructure to be a safe distance.¹³⁹

D. Harsh Penalties

Criminal penalties and prosecutions for violations of alien land laws are not new. In California and Arizona, such criminal prosecutions were common during the 1920s and 1930s, but those laws were subsequently repealed.¹⁴⁰ Penalties for violating a state’s alien land laws have generally been civil. Forfeiture of the property or sale at auction with proceeds escheating to the state were commonly specified as penalties in state laws. Under some laws, such as Wisconsin’s, a civil fine could be imposed, ranging from $500 to $5,000.¹⁴¹ Criminal penalties existed but were rare.¹⁴²

In the most recent wave of bills, criminal penalties have gained popularity, and civil fines are steeper. Additionally, some of the new bills and laws impose penalties on the sellers as well as the buyers. For example, the alien land law enacted in Arkansas makes a violation a felony punishable by two years in jail and a $15,000 fine.¹⁴³ Being a “resident alien” is mentioned as an “affirmative defense” to the charge.¹⁴⁴ Florida has also made it a criminal offense to violate its new law, which imposes harsher criminal consequences on Chinese purchasers of land than purchasers of other nationalities.¹⁴⁵ Violators who are domiciled in China may be charged with a third-degree felony, punishable by up to five years in jail and a $5,000 fine, while violators domiciled in the other countries named in Florida’s law may be charged with only a second-degree misdemeanor, punishable by sixty days in jail and a $500 fine.¹⁴⁶ This disparity extends to sellers. Selling real property to individuals or companies domiciled in China is a first-degree misdemeanor, punishable by one year in prison and a $1,000 fine, while selling property to individuals or companies domiciled in other countries is only a second-degree misdemeanor.¹⁴⁷

E. Targeting Corporations

Finally, the current wave of alien land laws targets all forms of foreign control in complex corporate structures. The laws restrict not only foreign corporations but also companies incorporated in the U.S. if they are controlled by noncitizens who would not be allowed to purchase the real estate themselves. The expansive language used in some of these laws reflects an attempt to close the loopholes in previous laws that allowed foreigners to acquire land simply by channeling their investments through the veil of a U.S. corporation. This was one of the main drivers behind the recent alien land law passed in Oklahoma, which specified that “[n]o alien or any person who is not a citizen of the United States shall acquire title to or own land in this state either directly or indirectly through a business entity or trust.” ¹⁴⁸

Similarly, a Tennessee bill defined a “foreign business” as “a corporation incorporated under the laws of a foreign country, or a business entity whether or not incorporated, in which a majority interest is owned directly or indirectly by nonresident aliens.”¹⁴⁹ The bill further explained, “Legal entities, including, but not limited to, trusts, holding companies, multiple corporations, and other business arrangements, do not affect the determination of ownership or control of a foreign business.”¹⁵⁰ But this bill still has a major loophole—its definition of a foreign business is limited to owning a majority interest and does not address control. Nonresident aliens could control a corporation based on voting power, even if they do not own a majority of the stock.¹⁵¹

Many other bills closed that loophole. A Washington bill, for example, prohibited acquisition of agricultural land by a foreign-controlled enterprise and defined a controlling interest to mean “possession of more than [fifty] percent of the ownership interests in an entity, or an ownership interest of [fifty] percent or less if the persons holding such interest actually direct the business and affairs of the entity without the consent of any other party.”¹⁵² A law enacted in North Dakota adopts a nearly identical definition.¹⁵³

While the definitions in the new bills and laws vary and are not perfect, they clearly seek to capture all kinds of businesses in which noncitizens play a decisive role. Of course, if a corporation is forty-nine percent owned by U.S. citizens and fifty-one percent owned by noncitizens, the U.S. citizen owners are also likely to suffer financial setbacks as a result of such laws.

III. ARE ALIEN LAND LAWS LEGAL?

Commentators have taken different perspectives on the legality of alien land laws in the past.¹⁵⁴ Some have argued that alien land laws would violate the Equal Protection Clause if they singled out specific countries.¹⁵⁵ Others contend that only restrictions on lawful permanent residents would raise equal protection concerns, and even those may be permissible.¹⁵⁶ Preemption concerns and Dormant Commerce Clause concerns have also been raised.¹⁵⁷ Because of significant variations among the laws, it is difficult to analyze these legal issues for the laws as a whole. Nevertheless, this Part attempts to parse some of the legal challenges that the new wave of alien land laws may face.

A. Statutory Violations

Alien land laws may conflict with federal statutes that prohibit discrimination such as the Fair Housing Act (“FHA”)¹⁵⁸ and the Civil Rights Acts of 1866¹⁵⁹ and 1870.¹⁶⁰

1. The Fair Housing Act

The FHA, enacted as part of the Civil Rights Act of 1968, seeks to prohibit unlawful discrimination by landlords. Under the FHA, it is discriminatory “[t]o refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.”¹⁶¹ Although alienage is not specifically mentioned, the U.S. Department of Housing and Urban Development (“HUD”) has stated that “[a] requirement involving citizenship or immigration status will violate the [FHA] when it has the purpose or [unjustified] effect of discriminating on the basis of national origin.”¹⁶² Private parties would be violating the FHA if they comply with state laws that restrict who can buy or lease real estate based on national origin. States may enhance the protections of the FHA but cannot reduce them. Section 816 of the FHA declares invalid any state law that requires or permits any action that would be a discriminatory housing practice under the FHA.¹⁶³

One aspect of the FHA that makes the inquiry different from an equal protection claim is that claimants do not need to prove discriminatory intent. A facially neutral law may violate the FHA if it has “discriminatory effects.”¹⁶⁴ This is useful in challenging a law like Florida’s, which may be perceived as discriminating based on domicile rather than national origin. By prohibiting sales of real estate to individuals and companies domiciled in China, Florida’s law clearly has discriminatory effects related to national origin: China has over one billion inhabitants, of whom only .05% are not Chinese.¹⁶⁵ Similarly, other countries identified as “foreign adversaries” under Florida’s law have a very small percentage of foreigners. Less than 0.1% of Cuba’s population are immigrants, for instance.¹⁶⁶

A law that has a discriminatory effect on a protected class is unlawful if it is not necessary to achieve a substantial, legitimate, nondiscriminatory interest, or if a less discriminatory alternative could serve that interest.¹⁶⁷ As discussed further under equal protection below, alien land laws are not necessary to achieve the asserted interests, and less discriminatory alternatives are, in fact, available.

An important limitation of the FHA, however, is that it only applies to “dwellings,” that is, to real estate capable of being used as a residence.¹⁶⁸ Thus, while broadly written alien land laws that restrict real estate (or real property in general) remain vulnerable to FHA challenges,¹⁶⁹ those that restrict only agricultural land cannot be challenged under the Fair Housing Act.¹⁷⁰ The Civil Rights Acts of 1866 and 1870 may help fill this gap, although, as explained below, these laws have their own limitations.

2. Civil Rights Acts of 1866 and 1870

The Civil Rights Act of 1866 provided that “citizens . . . shall have the same right, in every State and Territory in the United States, to make and enforce contracts . . . as is enjoyed by white citizens.”¹⁷¹ The Civil Rights Act of 1870 made a significant revision by changing “citizens” to “persons.”¹⁷² This language is now codified in 42 U.S.C. § 1981 (“section 1981”). The revised language made it clear that noncitizens, as well as citizens, are protected by the law’s equality mandate.¹⁷³ Courts have also construed section 1981 as prohibiting discrimination based on alienage.¹⁷⁴ Alien land laws may therefore run afoul of section 1981.¹⁷⁵

One limitation of section 1981 is that it applies only to individuals “within the jurisdiction of the United States.” While this phrase includes noncitizens in the United States,¹⁷⁶ it would likely exclude noncitizens residing abroad, the group most affected by alien land laws. Corporations headquartered abroad that are “foreign adversaries” under Montana’s law therefore may not be able to bring challenges under section 1981, although if they have U.S.-based subsidiaries, such challenges may still be possible. Other states, like Indiana, have broad definitions of “qualified entities.”¹⁷⁷ Many alien land laws tackle corporations controlled by foreigners. Any qualified entities based in the U.S. should be able to bring section 1981 challenges, even if they are owned or controlled by citizens of Iran, North Korea, or China.

Another potential limitation of section 1981 is that a separate provision of the Civil Rights Act of 1866, now codified at 42 U.S.C. § 1982 (“section 1982”), specifically addresses property and extends equal protection only to U.S. citizens.¹⁷⁸ Specifically, section 1982 provides: “All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.”¹⁷⁹ That language was not altered by the Civil Rights Act of 1870. Courts could therefore interpret section 1982 as a limited exception to section 1981’s more general rule about contracts, excluding contracts pertaining to property from the alienage equality principle found in section 1981.

Even under this interpretation, however, section 1981 is still relevant, since some of the recently enacted laws not only prohibit buying and selling real property, but also prohibit forming other types of contracts. For example, Indiana’s, Montana’s, and Texas’s new alien land laws prohibit certain foreign entities from countries like China from entering into agreements regarding critical infrastructure (energy grid, water treatment plants, and so on).¹⁸⁰

Additionally, one could argue that section 1982 prohibits the restrictions that alien land laws place on U.S. citizen sellers and landlords, as well as U.S. citizen-owned or controlled realty and title companies. From the perspective of U.S. citizens who want to sell properties, the restrictions imposed by states are restraints on alienation.¹⁸¹ The laws shrink their market, and if the claims about Chinese investors flooding the market and paying exorbitant prices are true,¹⁸² then real estate owners and companies who cater to this population will lose a profitable share of potential buyers. One complication with this argument is that U.S. citizen sellers are not necessarily being treated differently from other “white citizens” under the language of section 1982. For the argument to work, the focus would likely have to be on non-white U.S. citizen sellers, for example, U.S. citizen sellers of Chinese descent whose clientele potentially include a substantial number of Chinese citizens or companies domiciled in China. These U.S. citizen sellers of Chinese descent could argue that they are being deprived of the same opportunities to sell real property that are enjoyed by white citizens who do not have clientele in China.

Another possible legal hurdle is that a disparate impact claim under section 1981 or section 1982 requires showing that the disparate impact is traceable to a discriminatory purpose.¹⁸³ This is more limiting than a disparate impact claim under the FHA. Nevertheless, the legislative history and rhetoric surrounding the passage of some of the laws may help demonstrate a discriminatory purpose. State legislators and executive officials discussing alien land laws have used inflammatory rhetoric coated with national security concerns. Feeding on the anti-Asian sentiment fueled by dubious theories about the origin of COVID-19 and compounded by economic fears concerning China’s influence, their statements are reminiscent of the language used in the era of the “Yellow Peril.”¹⁸⁴ Although alien land laws may seem somewhat removed from the original purpose of the Civil Rights Acts, which was to prevent discrimination against African Americans in the wake of the Civil War, the rhetoric surrounding these laws reflects a form of racial discrimination.

B. Equal Protection Concerns

The Equal Protection Clause applies to all persons within the United States, including all noncitizens.¹⁸⁵ But noncitizens abroad generally are not regarded as having a right to equal protection,¹⁸⁶ although open questions about extraterritorial rights certainly remain.¹⁸⁷ This may be a threshold hurdle for bringing an equal protection challenge, since many of the alien land laws apply only to “nonresident aliens” and define “resident aliens” as noncitizens living anywhere in the U.S.¹⁸⁸ If an alien land law restricts only foreigners abroad, an equal protection challenge would likely need to be brought by the individuals and companies based in the U.S. that are prohibited from selling or leasing real property to foreigners abroad.¹⁸⁹

Another major challenge in bringing an equal protection claim will be the century-old Supreme Court precedents in Terrace and Porterfield upholding alien land laws, which have never been overruled.¹⁹⁰ Of course, in the 1920s, equal protection jurisprudence was quite different than it is today. Segregation, Jim Crow, and racially restrictive covenants were all legal.¹⁹¹ Levels of judicial scrutiny were not introduced until 1938, in the famous footnote four of United States v. Carolene Products, in which Justice Stone mentioned certain circumstances that may call for a “more searching judicial inquiry,” including cases involving “prejudice against discrete and insular minorities.”¹⁹²

In 1948, when the Supreme Court applied this type of searching judicial inquiry in Oyama, it invalidated as racially discriminatory a part of California’s alien land law that deprived U.S. citizens of Japanese descent of property rights.¹⁹³ But the Court stopped short of invalidating the law altogether.¹⁹⁴ That same year, in Takahashi, when the Court struck down a California law that prohibited those “ineligible for citizenship” from obtaining fishing licenses, it rejected California’s reliance on the Terrace and Porterfield cases, finding them not controlling even “[a]ssuming the[ir] continued validity.”¹⁹⁵

The modern strict scrutiny test did not emerge until the 1960s.¹⁹⁶ And it was not until 1971 that the Supreme Court applied strict scrutiny to alienage classifications.¹⁹⁷ In a watershed decision, Graham v. Richardson, the Court found that “[a]liens as a class are a prime example of a ‘discrete and insular’ minority . . . for whom such heightened judicial solicitude is appropriate.”¹⁹⁸ Applying this new, rigorous standard of review, the Court struck down Arizona and Pennsylvania statutes that favored citizens over noncitizens in welfare benefits.¹⁹⁹ Richardson rejected the states’ argument that the restrictions were justified by “a State’s ‘special public interest’ in favoring its own citizens over aliens in the distribution of limited resources such as welfare benefits.”²⁰⁰ The Court also flatly rejected “fiscal integrity” as a compelling justification, stating that “aliens lawfully within this country have a right to enter and abide in any State in the Union ‘on an equality of legal privileges with all citizens under non-discriminatory laws.’ ”²⁰¹

The Supreme Court continued to apply strict scrutiny to strike down state laws that discriminated against noncitizens in employment. The Court invalidated a New York law that permitted only U.S. citizens to be eligible for state employment,²⁰² a Connecticut law that permitted only U.S. citizens to become lawyers,²⁰³ and a Texas law that permitted only U.S. citizens to be notary publics.²⁰⁴

However, the Court has also recognized an exception to strict scrutiny in cases where alienage classifications are related to a state’s political function.²⁰⁵ In Bernal v. Fainter, the Court described this as a “narrow exception” that “applies to laws that exclude aliens from positions intimately related to the process of democratic self-government.”²⁰⁶ Under the political function exception, the Court has applied rational basis review to uphold laws that require police officers,²⁰⁷ probation officers,²⁰⁸ and public school teachers²⁰⁹ to be U.S. citizens.

If strict scrutiny applies to an alien land law, then the law must be narrowly tailored to a compelling government interest, a test that is generally difficult to pass. If rational basis applies, the law must merely be related to a legitimate government interest. Determining which level of scrutiny applies is therefore a critical threshold question in assessing the likelihood of prevailing with an equal protection claim.

1. Does Strict Scrutiny Apply?

There are at least three important legal questions that must be answered in order to determine if alien land laws are subject to strict scrutiny. First, do all alienage classifications receive strict scrutiny or only those affecting lawful permanent residents? Second, does the “political function” exception to strict scrutiny for alienage classifications apply to alien land laws? Third, do restrictions that turn on being domiciled (or headquartered, for a corporation) in particular countries discriminate based on national origin?

i. Do All Alienage Classifications Receive Strict Scrutiny, or Only Classifications Affecting Lawful Permanent Residents?

The Supreme Court’s decision in Richardson broadly stated that “[a]liens as a class are a prime example of a ‘discrete and insular’ minority” and that “classifications based on alienage, like those based on nationality or race, are inherently suspect and subject to close judicial scrutiny.”²¹⁰ This language does not distinguish between legal permanent residents and other noncitizens. Subsequently, in Nyquist v. Mauclet, the Supreme Court also applied strict scrutiny in striking down a New York statute that barred a heterogeneous group of noncitizens (not just permanent residents) from state financial aid for higher education, stressing that “[t]he important points are that [the statute] is directed at aliens and that only aliens are harmed by it.”²¹¹

While the Court has never limited the application of strict scrutiny to lawful permanent residents, its use of the term “resident aliens” has created confusion. The term “resident alien” can easily be misconstrued as shorthand for a permanent resident, although it simply refers to an alien residing in the United States.²¹² Asylum applicants, refugees, and noncitizens with a variety of temporary visas, among others, are permitted to reside in the United States, even though they are not lawful permanent residents.

In Toll v. Moreno, the Supreme Court had an opportunity to clarify what level of scrutiny applies to classifications involving temporary immigrants (technically called “nonimmigrants”) when evaluating a University of Maryland policy that prohibited individuals with G-4 visas from receiving in-state tuition.²¹³ But the Court ultimately found that the university policy was preempted and declined to address the equal protection claim.²¹⁴ A circuit split has since emerged regarding what level of scrutiny applies to state classifications involving temporary immigrants.

The Fifth Circuit has held that temporary immigrants are not a suspect class, applying rational basis review in upholding Louisiana laws that prohibit temporary immigrants from taking the bar exam²¹⁵ and obtaining a nursing license.²¹⁶ In explaining why classifications affecting temporary immigrants receive rational basis review, the Fifth Circuit stressed the ways that temporary immigrants are different from permanent residents, noting that “nonimmigrant aliens may not serve in the U.S. military, are subject to strict employment restrictions, incur differential tax treatment, and may be denied federal welfare benefits.”²¹⁷ The Sixth Circuit followed the Fifth Circuit’s rationale, applying rational basis review in upholding a Tennessee statute that conditions issuance of a driver’s license on being a U.S. citizen or permanent resident.²¹⁸

The Second Circuit, on the other hand, has held that temporary immigrants are a suspect class and applied strict scrutiny in striking down a New York statute that prohibited them from a obtaining a pharmacist’s license.²¹⁹ The court refused to create an exception to strict scrutiny for temporary immigrants that the Supreme Court never recognized.²²⁰ Additionally, the court reasoned that the factual similarities between U.S. citizens and permanent residents recognized in Richardson were never intended to be a test for triggering strict scrutiny.²²¹ The court correctly recognized that Richardson’s recognition of aliens as a “discrete and insular minority” was premised on their minority status within the community, not their similarity to citizens.

The only class of noncitizens that the Supreme Court has ever treated differently in terms of the level of scrutiny that applies are undocumented individuals. But even in Plyler v. Doe, in which the Court refused to recognize undocumented children as a suspect class, the Court struck down the Texas statute that denied them a basic education.²²² There, the Court applied a form of intermediate scrutiny by requiring Texas to show that it had a “substantial” interest in excluding undocumented children from public schools.²²³ This heightened scrutiny may have been unique to a case that stressed the importance of education and the innocence of children.²²⁴ Still, if undocumented children received heightened scrutiny, it is difficult to argue that lawfully present noncitizens should receive rational basis review simply because they are not permanent residents.²²⁵

ii. Does the “Political Functions” Exception to Strict Scrutiny for State Alienage Classifications Extend to Ownership of Real Property?

Courts have not yet addressed whether state alien land laws fall under the “political functions” exception to strict scrutiny. If the exception applies, a state’s alienage classifications would receive only rational basis review. In Shen v. Simpson, the case challenging Florida’s 2023 alien land law, Florida argued that the political function exception applies, triggering only rational basis review.²²⁶ Thus far, however, the Supreme Court has only applied the political functions exception to certain state jobs.

The Supreme Court set forth a two-part test for determining “whether a restriction based on alienage fits within the narrow political-function exception.”²²⁷ First, a court examines the specificity of the classification: “[A] classification that is substantially overinclusive or underinclusive tends to undercut the governmental claim that the classification serves legitimate political ends.”²²⁸ As explained further below in the application of the strict scrutiny test, alien land laws are substantially over- and under-inclusive. That alone undercuts the relevance of the political function exception.

Additionally, the second part of the test provides that:

[E]ven if the classification is sufficiently tailored, it may be applied in the particular case only to “persons holding state elective or important nonelective executive, legislative, and judicial positions,” those officers who “participate directly in the formulation, execution, or review of broad public policy” and hence “perform functions that go to the heart of representative government.”²²⁹

The plain language of the second prong indicates that the exception applies only to certain public positions. Owning real property is not a public position. Nor does being a property owner require any involvement in the formulation, execution, or review of public policies. Restricting property ownership is different from “limit[ing] the right to govern to those who are full-fledged members of the political community.”²³⁰

One way to view the issue is to consider whether real property ownership is more closely related to Supreme Court cases protecting noncitizens’ rights to equal economic opportunity,²³¹ or to cases that allow states to limit certain public positions to U.S. citizens.²³² Land is often connected to economic opportunity—agricultural land provides a livelihood through farming and raising livestock; commercial property supports businesses that provide livelihoods; and even residential property is often necessary to work in an area. In fact, in cases striking down state laws that discriminated against noncitizens in employment, the Supreme Court has connected the right to work to the right to “entrance and abode,” stating “they cannot live where they cannot work.”²³³

Furthermore, real property ownership has little in common with the public positions that have fallen under the exception to strict scrutiny. Landowners are not “clothed with authority to exercise an almost infinite variety of discretionary powers,”²³⁴ they do not fulfill “a basic governmental obligation,”²³⁵ and they are not “in a position of direct authority over other individuals.”²³⁶ Under this analysis, if any type of restriction on real property qualifies for the political functions exception, it would only be ownership of state land.

However, if the political functions exception is more broadly construed as encompassing “the process of democratic self-determination” and “the community’s process of political self-definition,” courts may consider land ownership to be relevant.²³⁷ Land can be seen as providing “the basis for political organization.”²³⁸ States’ historical restrictions on foreign land ownership, going back centuries, could also be viewed as reflecting an understanding that such restrictions are somehow inherent to state sovereignty and self-determination.

But choosing who gets to live in a state has not traditionally been part of a state’s right to self-definition. Due to the constitutional right to migrate, the Supreme Court has stressed that “[s]tates . . . do not have any right to select their citizens.”²³⁹ A state law aimed at deterring a particular class of people from migrating to the state is impermissible whether that class consists of welfare applicants, as in Richardson, Japanese immigrants, as in Takahashi, or other noncitizens. Similarly, the Supreme Court has found that a “[s]tate’s objective of reducing population turnover” would “encounter[] insurmountable constitutional difficulties.”²⁴⁰ The political functions exception allows a state to “limit the right to govern to those who are full-fledged members of the political community,”²⁴¹ but it has never allowed a state to limit who lives in the community.

In short, the political functions exception should not apply to alien land laws, and strict scrutiny would be the proper standard of review for their alienage classification.

iii. Do Restrictions Discriminate Based on National Origin if They Draw Distinctions Based on Where a Person or Entity Is Domiciled or Headquartered?

National origin discrimination is distinct from discrimination based on alienage. While alienage discrimination refers to distinctions between citizens and noncitizens,²⁴² national origin discrimination is broadly understood to include discrimination based on an individual’s place of origin, or their ancestors’ place of origin.²⁴³ Laws that place restrictions on citizens or corporations of specific countries ought to trigger strict scrutiny based on national origin.

States may argue, however, that their laws do not discriminate based on national origin but instead draw distinctions based on place of “residence” or “domicile.” For example, Florida’s law restricts only noncitizens who are “domiciled” in certain foreign countries, rather than restricting citizens of those countries outright.²⁴⁴ A federal district court found that the Florida law does not discriminate based on Chinese national origin because Chinese individuals domiciled in the United States are not restricted; only individuals domiciled in China are restricted, and they need not be Chinese.²⁴⁵ Similarly, Montana’s law applies to corporations that are “domiciled or headquartered” in a country identified as a “foreign adversary.”²⁴⁶

A law like Florida’s would clearly have a disparate impact on individuals of Chinese national origin, since over 99% of people living in China are Chinese. But equal protection principles require a showing of intentional discrimination; classifications that merely result in a disparate impact are not subject to strict scrutiny.²⁴⁷ In Village of Arlington Heights v. Metropolitan Housing Development Corp., however, the Court found that discriminatory intent could be evidenced by factors that include “disproportionate impact, the historical background of the challenged decision, the specific antecedent events, departures from normal procedures, and contemporary statements of the decisionmakers.”²⁴⁸ These factors must be assessed cumulatively.²⁴⁹ In Shen, the Florida case, the clearly disproportionate impact on Chinese individuals, along with the legislative history, would support a finding of discriminatory intent under Arlington Heights.

Because the Arlington Heights factors are non-exhaustive, some appellate courts have mentioned other considerations. For example, a “consistent pattern” of actions of decisionmakers that have a much greater harm on minorities than on non-minorities could help establish discriminatory intent.²⁵⁰ In a state like Florida or Texas, where the governors have taken numerous actions to try to prevent immigrants from coming to the state, this may be a relevant consideration.²⁵¹ Courts have also found that applying different, less favorable processes or substantive standards to requests by members of a suspect class may raise an inference of discriminatory intent. Some alien land laws impose special procedures for buyers from certain countries, such as requiring buyers to sign affidavits attesting that they are not principals of China and to register existing properties with the state.²⁵² These types of procedures could further help establish discriminatory intent.²⁵³

2. Analyzing Alien Land Laws Under Strict Scrutiny

In order to survive strict scrutiny, a law must be narrowly tailored to serve a compelling government interest. When strict scrutiny is applied, the government “must show that it cannot achieve its objective through any less discriminatory alternative.”²⁵⁴ The main reasons offered for the new wave of alien land laws are national security, food security, and preventing absentee landownership. As explained below, even assuming these are all compelling government interests, alien land laws are unlikely to survive strict scrutiny because they are not narrowly tailored to achieve these objectives. There are also less restrictive alternatives available.

i. National Security

In explaining the need for Alabama’s newly enacted alien land law, Governor Ivey said, “Across the United States, we have seen alarming instances of foreign entities purchasing large tracts of land, which could have severe consequences for our country’s national defense and economy, if no action is taken.” ²⁵⁵ As discussed above, many of the proposed and enacted laws forbid foreign ownership of land within a certain distance of military installations or critical infrastructure. Such restrictions are highly unlikely to prevent espionage or other national security attacks. The Chinese balloon that hovered over Montana did not need to be launched from land near a military base.²⁵⁶ Neither do drones or cyberattacks gathering U.S. data.²⁵⁷

Furthermore, the “safe” distances from military installations or critical infrastructure are arbitrary in this new wave of alien land laws. As noted above, these distances range from two to fifty miles. The best illustration of this arbitrariness is Florida’s law, which bans ownership by “foreign principals” within ten miles of military installations even though the legislation was triggered by a Chinese company’s purchase of land twelve miles from a military based in North Dakota.²⁵⁸

Nationality-based restrictions on ownership of real property are also easily circumvented. Straw men can be used to purchase the land. A Chinese tycoon can easily have someone purchase it for him, as Mr. Sun did in Texas.²⁵⁹ As commentators have previously noted, alien land laws do not really pose an impediment to acquiring real property.²⁶⁰

A less restrictive alternative would be for states to establish or expand existing reporting requirements for foreign investment in land. Several states have already implemented reporting requirements for foreign investments in agricultural land.²⁶¹ Extending the reporting requirements to all real estate and subjecting those transactions to a review process to identify risky transactions would be less restrictive and potentially more effective than a blanket ban. Once the state has information about a potential transaction, it can decide if the transaction can go forward or if it involves too many risks from a national security perspective. This process imposes less of a restriction on individuals who want to sell their land and is less likely to be perceived as aggressive by foreign countries. It is an approach similar to the one used at the federal level by the Committee on Foreign Investment in the United States (“CFIUS”). However, this approach, like the current one banning transactions, may be preempted by the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”).²⁶² Another way to discourage transactions involving noncitizens abroad is taxation. A tax would increase the cost of real estate transactions, ensuring that only those bringing a large benefit move forward. Taxation, though, could violate the Dormant Foreign Commerce Clause.²⁶³

In short, banning land ownership within certain distances of military installations or critical infrastructure is not going to bring large gains in national security. It will, however, impose significant costs by barring potential good faith purchasers from accessing land, introducing tensions in the United States’ relationship with certain countries, and perpetuating negative sentiments towards people from countries like China.

ii. Food Security

The idea of food security has had a central role in farmland regulation for a long time.²⁶⁴ There is a fear that foreign companies will control U.S. food production and either let Americans suffer if certain products are unavailable or make them pay a higher cost by importing them. The fear is not new: for decades, foreign owners of agricultural land have been required to report to the U.S. Department of Agriculture.²⁶⁵

But this fear is misplaced. The United States has a surplus of agricultural products.²⁶⁶ Furthermore, the bills deal with land ownership as a proxy for agricultural production, but the current structure of agricultural markets may make that an inadequate proxy. Eight of the twenty largest food and beverage companies in the United States are foreign companies, but none are from the countries deemed foreign countries of concern in the new wave of alien land laws.²⁶⁷ Control of agricultural land neither results in automatic control of the food supply, nor does it lead to control of agricultural production. In Iowa, for example, where roughly all non-family corporations are prevented from owning agricultural land, large agribusinesses simply lease the land from several owners, subverting the goal of the ownership prohibition.²⁶⁸ A similar subterfuge could be used by foreign companies in response to state alien land laws.

If the concern is foreign control of agricultural land and absentee ownership, focusing on the “who” by targeting specific countries’ nationals would be a partial solution if the countries singled out were the ones that most foreign owners come from. If that were the case, then instead of banning China, Iran, North Korea, or Russia, states should ban Canada, Netherlands, Italy, the U.K. and Germany, in that order, because each of them owns far more agricultural land than China.²⁶⁹ Even a measure like Washington’s—a blanket prohibition on foreign investment in agricultural land—is not automatically going to slow down the consolidation of land and reduce land prices because domestic companies may still accumulate large amounts of natural resources.

A less restrictive alternative to address concerns about foreign control of resources is to limit the amount of these resources that foreigners can own. This approach recognizes that size matters and that small investments give foreign actors less leverage against federal, state, and local governments.²⁷⁰ Restricting the amount of land that noncitizens can own would also discourage financial investors seeking market control who need a certain scale for the investment to be profitable.

iii. Absentee Ownership

A third motivation for the new wave of alien land laws is concern over absentee ownership.²⁷¹ Absentee ownership is problematic because property is treated as an investment, and the owner generally lacks interest in what role the property could fulfill in the community,²⁷² civically and economically.²⁷³ This concern applies to both agricultural lands and dwellings. Alien land laws that distinguish between “resident aliens” and “nonresident aliens” reflect a desire to preserve property for residents. But because most state laws usually define a “resident alien” as living anywhere in the United States, limiting property ownership to resident aliens would not necessarily prevent absentee ownership. An owner of agricultural land in the Central Valley living in Shanghai is no different than an owner living in Rhode Island. Both will lack the local knowledge and the community involvement.

A more narrowly tailored alternative to address absentee ownership would be to impose a requirement of occupancy or production, or both, like the requirements for establishing a homestead.²⁷⁴ Alternatively, a state could tax land that is not in production at a higher rate, no matter where the owner resides.

A few alien land laws do impose stricter residency requirements to prevent absentee ownership.²⁷⁵ For example, Oklahoma’s newly enacted law has an exception for noncitizens who “take up bona fide residence in this state,” but if they leave the state, they must dispose of the land within five years.²⁷⁶ These requirements likely violate the Commerce Clause.

iv. Real Estate Market Prices

Although not explicitly mentioned by legislators proposing alien land laws, another motivation is fear of foreign investors driving up the prices of real estate.

In the agricultural sector, the fear is that it may displace American farmers who will not have access to land. Alabama’s Senate Bill (“S.B.”) 14 banning foreign ownership of agricultural land illustrates these concerns.²⁷⁷ Although the problem of access to farmland for small family farmers is real, the culprit is not necessarily foreigners but rather investors and consolidation.²⁷⁸ Furthermore, agribusinesses have been dominating the market.²⁷⁹ These alien land laws focus on the “who,” instead of on the “what”—in other words, they do not tackle the issue of corporate consolidation plundering natural resources.²⁸⁰

In the residential market, even if the overall Chinese investment in land is not large, it may have significant effects in certain local markets. While Chinese investment in land may drive prices up, it is necessary to consider a more nuanced picture. In some areas of the Midwest, Chinese investment has helped revitalize crisis-stricken areas, such as the Stonewater Community in a suburb of Detroit.²⁸¹ Many municipalities have welcomed the new developments targeting Chinese buyers. Corinth, near Dallas, readily approved new developments in its jurisdiction.²⁸² The situation may be different in Manhattan or San Francisco and other big cities where Chinese investments may be driving up home values.²⁸³ However, targeting the demand side will not solve the housing crisis because it is a supply-side problem.

The poor fit between alien land laws and their objectives, combined with the availability of less restrictive alternatives, means such laws are likely to be struck down under strict scrutiny.

3. Rational Basis Analysis

If rational basis review applies instead of strict scrutiny, then a court need only inquire if the law is rationally related to a legitimate government purpose. There is no analysis of less restrictive alternatives for rational basis review.²⁸⁴ While laws generally survive rational basis review, courts have invalidated laws motivated by animus by applying rational basis with bite, a heightened form of scrutiny. Both types of rational basis review are discussed below.

i. Regular Rational Basis Review

The poor means-end fit discussed above arguably fails not only strict scrutiny, but also rational basis review. There is simply no rational relationship between the asserted objectives and the means being used to achieve them, since the restrictions imposed will be completely ineffective in addressing the problems identified. First, the problems of access and prices of real estate are mostly supply problems, not demand. Second, the countries that are singled out in the new wave of alien land laws completely fail to reflect the nationalities of the largest foreign landowners. Third, these laws are argued as ways to ensure food security, but food security is not a problem in the United States. To the extent that food security embodies consolidation in the agricultural sector and absentee ownership, alien land laws do not solve the food security problem because the real culprits are domestic corporations and corporations from countries that are not mentioned in any of the alien land laws. Fourth, from a national security perspective, foreign adversaries who want to spy on the U.S. are likely to use methods that do not require a land base near the target.

The few cases where courts have upheld alien land laws under rational basis review are distinguishable from many of the current laws because those laws were different in scope and did not single out specific nationalities. For example, the Eighth Circuit upheld a Nebraska constitutional provision prohibiting agricultural land ownership by non-family corporations.²⁸⁵ In addition, the Wisconsin Supreme Court upheld a law that limited ownership of land by “nonresident aliens” to 640 acres.²⁸⁶ The court found the law to be rationally related to the legitimate goal of preventing absentee ownership, stating that “limiting the benefits of land ownership to those who share in the responsibilities and interests of residency is not an unreasonable exercise of legislative choice.”²⁸⁷

The fate of the new laws may be different, especially if they single out specific countries. Laws targeting citizens, corporations, and governments of China, Iran, North Korea, Russia, and other countries on various federal lists are much more ineffective (and more insidious) than the laws considered in these prior decisions, which treated all nonresident aliens equally. If the targeted countries’ citizens and corporations own little to no real property in the state, legislators cannot rationally think that prohibiting them from owning real estate will make a dent in the problems they want to tackle. Additionally, absentee ownership is already pervasive in the agricultural sector. Targeting foreign owners as a potential solution would affect only 3% of the land in the United States if all countries were restricted. Legislators are aware that there is little overlap between the problem of absentee ownership and foreign ownership.²⁸⁸ As for statutes that prohibit landownership within a certain distance of military bases or critical infrastructure, this will do nothing to prevent cyberattacks, which pose the main threat to national security, as noted above.²⁸⁹

Another reason for questioning the rationality of the new wave of alien land laws is that availability bias appears to play a major role in legislators’ decisions. Availability bias is the human tendency to use information that comes to mind quickly and easily when making decisions.²⁹⁰ It is an unconscious mental shortcut that circumvents taking all evidence into consideration. Because a few incidents that involved foreign investors made national news, the new wave of alien land laws was spurred.

In addition to the wind farm project planned by Mr. Sun in Texas, there were two other prominent incidents. One involved a Saudi-owned company called Fondomonte that was leasing public land in Arizona and draining the groundwater supply to grow alfalfa for export back to Saudi Arabia, where alfalfa farming was prohibited due to water scarcity. The company paid relatively little to lease the land in Arizona and got the water for free, while Americans in the surrounding area paid extremely high costs for water.

The other case involved a Chinese food manufacturer that tried to purchase 300 acres of agricultural land in North Dakota located twelve miles from the Grand Forks Air Force Base.²⁹¹ The federal government’s CFIUS reviewed this case and determined that it did not have jurisdiction over the transaction because the Grand Forks Air Force Base was not on its list of military installations.²⁹² This led people to believe that the federal government’s process was inadequate and that states needed to take more action. The Grand Forks incident was relied on not only by legislators in North Dakota, but also by other states including Florida.²⁹³ Yet, as previously noted, the law that Florida ultimately passed would not have stopped such an investment, since it prohibited Chinese foreign investment within ten miles of military installations. The arbitrariness and ineffectiveness of the laws suggest that decisions were driven by implicit biases rather than carefully studied facts. Worse yet, they may have been motivated by animus, as discussed below.

ii. Rational Basis with Bite

To the extent that recent alien land laws are motivated by animus toward China or another country, courts may apply “second order” rational review, also known as rational basis “with bite.”²⁹⁴ In such cases, the Supreme Court has found the government’s interest to be illegitimate because it is motivated by prejudice. The Court has considered a poor means-end fit to be a signal that an illegitimate interest may be motivating the law.²⁹⁵

Comments made by politicians around the time that the recent wave of alien land laws started being proposed certainly suggest that anti-Chinese animus played a role. For example, in 2022, a candidate who competed in the Republican primary for a Texas House seat tweeted, “China created a virus that killed hundreds of thousands of Americans.”²⁹⁶ Former President Trump also continued to call COVID-19 the “China virus” throughout 2022.²⁹⁷ Each tweet from Trump that mentioned “China” and “COVID” together resulted in an 8% increase in anti-Asian hate incidents and tweets with racial slurs.²⁹⁸

Politicians further fanned the flames of anti-Chinese animus by presenting China as a threat to the American way of life. A U.S. Representative from Indiana accused President Biden of “turning a blind eye to CCP spies abusing our visa system.”²⁹⁹ A U.S. Senator from Tennessee warned that “[t]he CCP is attempting to take over the USA across all industries—pushing spies into U.S. universities and buying U.S. farmland.”³⁰⁰ Vice President J.D. Vance, a former Senator from Ohio, analogized U.S. economic dependence on China to slavery when he was running for his Senate seat, stating: “When our farmers go bankrupt the Chinese who sell the fertilizer will happily buy up their land. This is the pathway to national slavery.”³⁰¹ The Washington Post and other outlets have also highlighted how “anti-Asian bigotry” is behind the new alien land laws targeting China.³⁰²

In City of Cleburne v. Cleburne Living Center, Inc., a classic case on rational basis with bite, the Court focused on the lack of “fit” between the language of a zoning ordinance and a town’s asserted objectives for denying a special permit to a group home for people with mental disabilities.³⁰³ The town claimed that the purpose of the ordinance and permit process was to avoid congestion and ensure safety in the event of a fire or flood, but the Court pointed out that the permit process did not apply to hospitals, nursing homes, dormitories, and other uses that could be expected to pose greater problems than a group home.³⁰⁴ This poor means-end fit supported the Court’s conclusion that the ordinance had an illegitimate purpose based on animus.

Similarly, the underinclusive nature of alien land laws that target countries with minimal investments in U.S. land, while omitting the countries with the largest investments, demonstrates a poor means-end fit if the asserted objectives are to protect food security and prevent absentee landownership. These laws also generally “grandfather” in ownership of existing properties, which some commentators have identified as another signal of underinclusiveness that can trigger heightened “rational basis” review.³⁰⁵

In sum, regardless of whether strict scrutiny or rational basis review applies, alien land laws targeting specific countries should be struck down. They are not rationally related to a legitimate government interest, much less narrowly tailored to a compelling government purpose, and they appear to be motivated, at least in part, by impermissible animus.

C. Preemption Concerns

Whether alien land laws are preempted by federal law is another important constitutional question. This Section explores whether alien land laws are preempted by federal immigration laws, the federal government’s national security and foreign affairs powers, and the CFIUS and USDA reporting regimes.

1. Immigration Preemption

The Immigration Act of 1952 established “a comprehensive federal statutory scheme for regulation of immigration and naturalization” and set “the terms and conditions of admission to the country and the subsequent treatment of aliens lawfully in the country.”³⁰⁶ Supreme Court precedents indicate that alien land laws restricting noncitizens who have already been admitted to the U.S. may be preempted by federal immigration law. In Takahashi, the Supreme Court explained that “[s]tate laws which impose discriminatory burdens upon the entrance or residence of aliens lawfully within the United States conflict with [the] federal power to regulate immigration, and have accordingly been held invalid.”³⁰⁷ Both Takahashi, and an earlier case, Truax v. Raich, struck down state laws limiting the employment of lawfully present noncitizens by reasoning that federal immigration law granted a “privilege to enter and abide in ‘any state in the Union,’ ” and that denying the right to work would be “tantamount to . . . deny[ing] them entrance and abode.”³⁰⁸

In Richardson, the Supreme Court confirmed that states may not impose an “auxiliary burden[] upon the entrance or residence of aliens” that Congress had never contemplated.³⁰⁹ Restrictions on ownership of real property impose precisely this type of auxiliary burden. Certainly, Congress never contemplated that lawful permanent residents would be encumbered by ownership restrictions. With respect to temporary immigrants (i.e., “nonimmigrants”), Congress required certain classes, such as tourists, students, and crewman, to maintain a residence abroad that they had no intent of abandoning.³¹⁰ But for other classes of temporary immigrants, Congress did not impose any such requirement.³¹¹ The Supreme Court has interpreted this silence “to mean that Congress . . . was willing to allow nonrestricted nonimmigrant aliens to adopt the United States as their domicile.”³¹² If every state could prohibit temporary immigrants from buying—or potentially even leasing—property, the doors of the United States would effectively be closed to when Congress permitted them to establish domicile here.³¹³ As a federal court in Texas recognized, “[r]estrictions on residence directly impact immigration in a way that restrictions on employment or public benefits do not.”³¹⁴

While lawfully admitted immigrants may have the strongest argument for immigration preemption, courts have also struck down state laws that discriminate against undocumented individuals in housing as preempted by federal immigration law.³¹⁵ For example, in Villas at Parkside Partners v. City of Farmers Branch, the Fifth Circuit found that immigration law preempted a local ordinance that prohibited renting to individuals who are not “lawfully present.”³¹⁶ The court reasoned that Congress contemplated that such individuals would reside in the United States until potential deportation and even required them to provide a reliable address to the federal government.³¹⁷ Additionally, the court noted that deciding whether someone is “lawfully present” requires a complex analysis and should be made only by federal immigration officials.³¹⁸ The same reasoning would support striking down Louisiana’s newly enacted alien land law, which exempts noncitizens who are “lawfully present in the United States” and would therefore require a state official to make a determination about someone’s legal status.³¹⁹

Additionally, in City of Farmers Branch, the court was concerned about the immigration classification in the local ordinance being “at odds” with a much more nuanced federal regime.³²⁰ Some of the proposed and enacted alien land laws raise similar concerns by using terms that conflict with immigration law. For example, Minnesota’s law defines a “permanent resident alien” to include not only someone who is a lawful permanent resident, but also a nonimmigrant treaty investor.³²¹ A bill proposed in West Virginia defined a “nonresident alien” as someone who is neither a U.S. citizen nor a lawful permanent resident. Under that definition, all sorts of noncitizens would be swept into the restriction, even if they live in West Virginia.

Finally, the registration and reporting requirements found in some alien land laws may be preempted by immigration law. In Hines v. Davidowitz, the Supreme Court found that immigration law preempted a Pennsylvania statute requiring adult aliens to register with the state, pay a fee, and carry an ID.³²² Likewise, in Arizona v. United States, the Court stressed that “the Federal Government has occupied the field of alien registration.”³²³ The Court explained that “[t]he federal statutory directives provide a full set of standards governing alien registration, including the punishment for noncompliance.”³²⁴ A state law that requires certain noncitizens to register their property, and penalizes them for failing to do so, is not far afield from one requiring noncitizens to register themselves, especially since the same personal information must be provided.

The arguments presented above all involve noncitizens who are in the United States. The major group omitted from this analysis of preemption by federal immigration laws are noncitizens abroad. But the other bases for preemption, discussed below, would apply to that group.

2. Foreign Affairs Preemption

The Constitution entrusts foreign affairs powers exclusively to the federal government.³²⁵ Foreign affairs preemption serves several purposes: it constrains a state’s ability to offend a foreign country, which could lead to hostilities; it promotes unity in the nation’s external affairs; and it furthers the effective exercise of foreign policy.³²⁶ Yet, as the history of alien land laws shows, states have long engaged with issues that affect foreign nationals.³²⁷

The Supreme Court has provided different versions of the test for determining whether a state law impermissibly interferes in foreign affairs. In American Insurance Ass’n v. Garamendi, which struck down California’s “Holocaust-era” insurance legislation, the Court framed the issue as whether the state law is likely to produce “more than [an] incidental effect in conflict with express foreign policy.”³²⁸ In Zschernig, the Supreme Court invalidated an Oregon probate law that permitted states courts to withhold remittances to nonresident aliens residing in Communist countries.³²⁹ Even though states traditionally have the power to regulate estates and probate, the Court found that the Oregon law “affect[ed] international relations in a persistent and subtle way.”³³⁰ There, the Court framed the test as whether the state law “impair[s] the effective exercise of the Nation’s foreign policy.”³³¹ And in Crosby v. National Foreign Trade Council, which struck down a Massachusetts law that barred state agencies from purchasing goods or services from companies doing business with Burma, the Court considered whether the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of [federal policy].”³³²

Applying these cases to alien land laws, the question is whether, or to what degree, they conflict with U.S. foreign policy or pose an obstacle to the objectives of foreign policy. Do they merely have an incidental impact on foreign affairs, or is the effect more material? While the answer will likely depend on the specifics of a particular law, it is also worth considering the cumulative impact of these alien land laws on foreign affairs. If every state prohibited citizens of China from buying property, the impact on foreign relations would be far more significant than if only a few did so.

State laws that unilaterally identify certain nations as “countries of concern” or “foreign adversaries,” with no reference to a federal law, are particularly likely to raise foreign affairs preemption concerns. Like the Massachusetts law struck down in Crosby, these state laws are making a judgment about the conduct of a foreign country that is “apart from the federal government’s own announced judgment.”³³³ Even if the countries identified by the state law are currently consistent with a federal designation, federal law expressly contemplates those designations changing over time, and state laws may not keep up with them.³³⁴ Some lower courts have already expressed preemption concerns about state laws that are directed at particular nations, noting that they can be perceived as a unilateral declaration of “economic war,”³³⁵ or a “political statement” about the country.³³⁶ As one court recognized, the potential effect on international relations is greater when a state targets a specific country instead of regulating all noncitizens regardless of nationality.³³⁷

Additionally, the countries identified by name in the new wave of alien land laws are already subject to individualized sanctions by the federal government. Several Presidents have issued Executive Orders and Congress has passed laws imposing unique sanctions against China,³³⁸ Iran,³³⁹ North Korea,³⁴⁰ and Russia,³⁴¹ among other countries. Just like the sanctions against Burma discussed in Crosby, the laws addressing sanctions against these countries give the President flexible authority over what sanctions to impose and empower the President to waive any sanctions in the interest of national security. In Crosby, the Court reasoned that Congress would not have “gone to such lengths to empower the President if it had been willing to compromise his effectiveness by deference to every provision of state statute or local ordinance that might, if enforced, blunt the consequences of discretionary Presidential action.”³⁴²

Like the Massachusetts law in Crosby, alien land laws that target countries subject to federal sanctions “impos[e] a different, state system of economic pressure,” “penalize[] some private action that the federal [laws] . . . may allow, and pull[] levers of influence that the federal [law] does not reach.”³⁴³ The restrictions imposed by the alien land laws also make it impossible for the President “to restrain fully the coercive power of the national economy” by lifting or promising to lift sanctions, which leaves the President with “less to offer and less economic and diplomatic leverage as a consequence.”³⁴⁴ These state laws could also conflict with the federal sanctions scheme by flatly prohibiting financial transactions that the OFAC might permit with a license.³⁴⁵

When Congress wanted state and local governments to play a role in sanctioning a country such as Iran, Congress explicitly authorized them to do so.³⁴⁶ The 2010 Comprehensive Iran Sanctions, Accountability, and Divestment Act specified what form such state sanctions could take (divestment from companies that invest $20 million or more in Iran’s energy section), stated that such laws were not preempted, and protected due process by requiring notice and the opportunity for a hearing.³⁴⁷ Without this explicit congressional authorization, however, such sub-federal sanctions would likely be preempted by either the statute or executive action.³⁴⁸

Alien land laws that avoid naming specific countries but rely on various federal designations raise similar preemption concerns. The federal government has already determined the unique purposes and consequences of each of these designations. Adding restrictions involving real property ownership to whatever consequences the federal government has already imposed interferes with the federal scheme. For example, if the Secretary of State designates a country as “of particular concern,” Congress has authorized fifteen specific “Presidential Actions” that may be imposed on such designated countries, as well as any “commensurate action.”³⁴⁹ The President is also authorized to waive the application of any action.³⁵⁰ State laws that restrict real property ownership by citizens or entities of these “countries of particular concern” add consequences that were never contemplated by Congress and that can undermine the President’s decisions.

The variation among the countries included in each federal list underscores the deliberate decisions made by federal actors about how each country should be classified based on specific foreign policy objectives. State laws that use these classifications in a completely different context distort their purpose. This preemption argument is especially strong where the federal law constrains the context in which a particular term may be used. For example, federal regulations specify that the Secretary of Commerce’s classification of certain countries as “foreign adversaries” is “solely for the purposes of ” a particular executive order.³⁵¹

Individually and collectively, alien land laws that target specific countries, either by name or based on a federal list developed for another context, “compromise the very capacity of the President to speak for the Nation with one voice in dealing with other governments.”³⁵² As the Court explained in Crosby, “the President’s maximum power to persuade rests on his capacity to bargain for the benefits of access to the entire national economy without exception for enclaves fenced off willy-nilly by inconsistent political tactics.”³⁵³

Although the argument for foreign affairs preemptions seems strong based on these Supreme Court precedents, the U.S. Department of Justice surprisingly did not assert preemption in a Statement of Interest that it submitted in the case challenging Florida’s alien land law.³⁵⁴ Its failure to do so was noted by the district court in rejecting the plaintiffs’ preemption argument.³⁵⁵ Given the weight that courts give to the federal government’s own position on preemption, the Department of Justice’s position could prove fatal to preemption arguments in other cases as well. However, in the recent Shen case, even with the silence of the federal government, the Eleventh Circuit Court of Appeals granted a preliminary injunction based on CFIUS regulation of real estate transactions.³⁵⁶

3. The CFIUS and USDA Regimes

Concerns about foreign interests in real property are not unique to States. At the federal level, there are two avenues to rein in foreign investment: data collection on foreign interests in agricultural lands by the USDA and the review of certain transactions via CFIUS. These federal regimes may preempt state restrictions on foreign investment.

i. Reporting to USDA

The Agricultural Foreign Investment Disclosure Act of 1978 (“AFIDA”) established a framework to collect reported data on foreign ownership of agricultural land.³⁵⁷ Unfortunately, the system has not been properly implemented. Inaccuracies and underreporting have been pointed out.³⁵⁸ These critiques of the incompleteness and lack of transparency of the USDA reporting system have prompted Congress to include in the Consolidated Appropriations Act for the 2023 Fiscal Year (“FY”) a mandate to USDA to report on the impact that foreign investment has on family farms, rural communities, and the domestic food supply.³⁵⁹ The Government Accountability Office is expected to issue a report on the AFIDA and USDA reporting frameworks. There are several bills being discussed in the 2023–2024 congressional term seeking to ensure compliance with AFIDA. The Not One More Inch or Acre Act would ensure higher penalties for not complying with AFIDA.³⁶⁰ Under current law, persons who have violated AFIDA are subject to a fine of up to twenty-five percent of the foreign person’s interest in the agricultural land. This bill would make the minimum fine to be ten percent. House Resolution (“H.R.”) 1789 would require the penalty to be “at least [fifty] percent” of the market value of the land.³⁶¹ S.B. 2060 (Foreign Agricultural Restrictions to Maintain Local Agriculture and National Defense Act)³⁶² would require USDA to investigate efforts to steal agricultural knowledge and technology and to disrupt the U.S. agricultural sector. S.B. 2060 would also made the Secretary of Agriculture a member of CFIUS.

ii. CFIUS

CFIUS is a system for monitoring and, if necessary, blocking foreign investments that threaten national security.³⁶³ Established by President Ford in 1975, CFIUS is an interagency committee, chaired by the U.S. Department of Treasury.³⁶⁴ If CFIUS determines that an investment poses a threat to national security, the President can block or unwind the transaction. National security is not defined for CFIUS’s purposes, leaving it open to discretion.³⁶⁵

CFIUS originally focused only on foreign investment in U.S. businesses, without reviewing any real estate transactions. But in 2018, the Foreign Investment Risk Review Modernization Act (“FIRRMA”) expanded CFIUS and the President’s authority to review and block “certain types of real estate transactions involving the purchase or lease by, or a concession to, a foreign person.”³⁶⁶ CFIUS only has authority over real estate transactions that are in or around airports and maritime ports, or that are close to certain designated military installations. FIRRMA recognized that the President may want to consider factors such as “the relationship of [the investor’s] country with the United States” and “the adherence of the subject country to nonproliferation control regimes” in deciding whether to block a transaction.³⁶⁷

CFIUS’s jurisdiction also excludes transactions involving a single housing unit or real estate in urbanized areas.³⁶⁸ Small real estate investments are not expected to have a significant impact on national security and may not encourage large investments. Certain transactions must be reported, such as those involving a foreign government or any other transaction that CFIUS’s regulation mandates, while others fall under voluntary reporting. Real estate transactions so far have not been subject to mandatory reporting, suggesting that Congress did not consider them a national security threat. Control of critical infrastructure does trigger an investigation by CFIUS,³⁶⁹ but agriculture and food systems are not specifically identified as critical infrastructure. Bills that Congress considered but did not pass would have made that connection clear.³⁷⁰ In 2022, President Biden instructed CFIUS to consider the implications of foreign investment for food security.³⁷¹

For transactions under the purview of CFIUS, CFIUS is a ceiling and states cannot strengthen the regime by imposing additional obstacles. Hence, the provisions of new alien land laws overlapping with CFIUS are preempted because they could constitute an obstacle for federal enforcement.³⁷² Because of its limited jurisdiction, CFIUS would not have the authority to review many of the individual real estate transactions prohibited by state alien land laws. For example, as noted above, CFIUS found that it did not have jurisdiction to review a Chinese food manufacturing company’s purchase of 370 acres located twelve miles from the Grand Forks Air Force Base in North Dakota.³⁷³ That air force base was not on CFIUS’s list of designated military installations. Additionally, as a practical matter, CFIUS’s review of real estate transactions is negligible. In 2022, CFIUS reviewed 285 notices of non-real estate transactions, and only one notice of a real estate transaction.³⁷⁴ But still CFIUS may operate as a deterrent.

One could argue that Congress steered clear of ordinary real estate transactions in order to allow states to exercise their traditional control over land and property.³⁷⁵ On the other hand, Congress’s decision to include certain transactions while omitting others may reflect a carefully calibrated consideration of national security and economic interests, in which case states should not be allowed to disturb the delicate balance struck by Congress.³⁷⁶ Of course, if Congress had perceived alien land laws as conflicting with federal law (the CFIUS regime), it could have taken some action. So far, however, Congress has done nothing to impede states from implementing such laws. When Congress amended FIRRMA in 2018, at least fifteen states had alien land laws,³⁷⁷ and Congress did not indicate any intent to displace those laws in the amended Act. However, in past years, bills were introduced at the federal level that would have expanded CFIUS’s jurisdiction over real estate transactions,³⁷⁸ or outright prohibited citizens of China, Russia, North Korea, or Iran from purchasing land.³⁷⁹ While the CFIUS regime is limited, states’ unilateral actions singling out certain countries threaten the unified position that CFIUS enshrines with respect to both adversaries and allies.³⁸⁰

The Eleventh Circuit Court of Appeals in the case challenging Florida’s S.B. 264 granted a preliminary injunction in favor of two of the plaintiffs and based the “likelihood of success” on the merits on the potential preemption of S.B. 264 by the carefully crafted balance of CFIUS review under FIRRMA for real estate transactions, including those near military installations.³⁸¹

D. Dormant Commerce Clause

1. Interstate Commerce

While the Commerce Clause gives power to the federal government to regulate commerce between the states, it has also been interpreted as a limit on state action. Unlike preemption doctrine, which asks whether a state law conflicts with a federal law or whether Congress has occupied the field, the Dormant Commerce Clause prohibits state or local action that restricts interstate commerce even in the absence of congressional action. The goal of the Dormant Commerce Clause doctrine is to prevent “differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.”³⁸²

Some alien land laws violate the Dormant Commerce Clause by treating out-of-state actors differently than in-state actors in ways that have a negative impact on interstate commerce. The disparate treatment between in-state and out-of-state residents in North Dakota’s new law is the clearest example. North Dakota’s law disadvantages noncitizens who are either abroad or in another state. It requires noncitizens who are not permanent residents or otherwise exempted to reside in the state for ten months a year. It also exempts those who actively participate in the management of the agricultural operation, which could allow someone to comply with the restrictions without being present in the state.³⁸³ A noncitizen who stops fulfilling these requirements must dispose of the property. A foreign person who moves to another state then cannot hold land while a similarly situated foreign person in North Dakota can.

Another example is the initial version of an Oklahoma bill, which exempted “any alien who is or shall become a bona fide resident of the State of Oklahoma” from the restrictions on ownership.³⁸⁴ Such a provision explicitly treats noncitizens living in another state differently than noncitizens residing in Oklahoma, which would trigger strict scrutiny under the Dormant Commerce Clause.³⁸⁵ Oklahoma likely recognized the Dormant Commerce Clause issue, because the final version of its rule pronounced that “the requirements of this subsection shall not apply to a business entity that is engaged in regulated interstate commerce in accordance with federal law.”³⁸⁶

Courts have struck down similar restrictions on landownership that favor in-state residents. For example, in Jones v. Gale, the Eighth Circuit invalidated a Nebraska initiative that amended the state constitution to ban corporations from owning farmland, with an exception for family farm businesses in which at least one family member resided or worked on the farm.³⁸⁷ The court found that this amendment favored Nebraska residents in violation of the Dormant Commerce Clause.³⁸⁸ Alien land laws that apply restrictions without differentiating based on residence in the state are much more likely to survive a Dormant Commerce Clause analysis.

2. Foreign Commerce

Restrictions on foreign ownership of land have a more obvious effect on international trade than they do on interstate commerce because noncitizens abroad are clearly targeted.³⁸⁹ North Dakota’s law, for example, allows noncitizens to buy agricultural land only if they reside in the state, while U.S. citizens and permanent residents can own agricultural land there regardless of where they live. While no country is singled out in North Dakota’s law, those countries without a treaty of friendship with the United States will be the ones whose citizens will be most affected.³⁹⁰

The Dormant Foreign Commerce Clause operates similarly to the interstate Dormant Commerce Clause, but state laws burdening foreign commerce are subjected to more demanding scrutiny.³⁹¹ When it comes to regulating foreign commerce, the Supreme Court has stressed that state laws should not “prevent this Nation from ‘speaking with one voice.’ ”³⁹² In the seminal case Japan Line, Ltd. v. County of Los Angeles, the Court highlighted the “acute” risk of retaliation by Japan for California’s imposition of a tax rule that deviated from international practice, observing that such retaliation “would be felt by the Nation as a whole,” not just by California.³⁹³

In subsequent cases, however, the Court has acknowledged the difficulty in determining “precisely when foreign nations will be offended by [a] particular act[]” or whether they might retaliate.³⁹⁴ The Court has also upheld state taxes on foreign entities by reasoning that no coherent federal policy exists.³⁹⁵

Under the Dormant Foreign Commerce Clause, it may be hard to demonstrate a uniform federal policy on foreign land ownership, since the federal government has traditionally entered into bilateral treaties with specific countries when it wanted to override state restrictions on foreign ownership of land.³⁹⁶ Additionally, in Barclays, the Supreme Court suggested that congressional inaction indicates acquiescence to differing state laws.³⁹⁷

Alternatively, courts may rely on the Supreme Court’s position in South-Central Timber Development, Inc. v. Wunnicke,³⁹⁸ which allows states to escape scrutiny under the Dormant Commerce Clause only if they are market participants themselves. For example, states could be acting as market participants when they are regulating state public lands, or when Congress has expressly excluded a state law from Dormant Commerce Clause scrutiny.³⁹⁹ In some cases, the Court has not considered references to state power over a resource, like water, in federal laws⁴⁰⁰ or in treaties⁴⁰¹ enough to conclude that Congress has excluded the application of the Dormant Commerce Clause to states. Accordingly, acknowledgement of state power to regulate property is an inadequate basis for refusing to apply the Dormant Foreign Commerce Clause when state laws discriminate against noncitizens abroad.

CONCLUSION

While each wave of alien land laws has responded to unique historical events, xenophobia of some kind undergirds them all. The current wave is no different. The dominant narratives that have fueled such bills involve members of the Chinese Community Party buying land to either spy on U.S. military bases or to “undermine American agriculture and control the global food supply.”⁴⁰² These narratives reflect a few salient examples of Chinese investments near military bases, but they have nothing to do with most foreign investment in the U.S. This Article has argued that one of the most significant weaknesses of these new laws is the complete lack of fit between the objectives asserted and the means being used to achieve them. This lack of means-end fit, combined with the availability of less restrictive alternatives, is highly relevant to both the equal protection analysis and the Fair Housing Act disparate impact analysis.

As legal cases challenging these new laws start percolating through the court system, the Supreme Court may eventually need to decide whether it will stand by hundred-year-old precedents upholding alien land laws that were based on explicitly racist naturalization eligibility criteria—rules that prohibited Asians from becoming U.S. citizens. The time has come for those cases to be overturned. But overturning them will likely require the Court to clarify certain unanswered questions in equal protection doctrine regarding alienage discrimination, such as whether strict scrutiny applies to all classes of noncitizens and whether the political functions exception to strict scrutiny can be extended to landownership.

Courts may also decide to avoid the thorny equal protection questions by striking down alien land laws on preemption grounds instead. However, the various arguments for preemption discussed here involve their own hurdles. Preemption under immigration law would likely be limited to noncitizens who have already been admitted to the U.S. Foreign affairs preemption seems particularly promising, but the federal government’s decision not to argue preemption in the recent Florida case to date may undermine that claim. A Dormant Foreign Commerce Clause argument is also strong, but courts may still be reluctant to invalidate a law related to traditional state powers over property based on interference with commerce.

There is also a chance that Congress will enact new laws in the near future addressing foreign ownership of land, as several such bills have already been proposed.⁴⁰³ Depending on the substance of a federal law, this could either make it harder or easier to challenge property restrictions related to national origin. In FY 2024, the House proposed a bill that would “prohibit the purchase of agricultural land located in the United States by nonresident aliens, foreign businesses, or any agent, trustee, or fiduciary associated with Russia, North Korea, Iran, or the Communist Party of China.”⁴⁰⁴ If the federal government decides to pass a law like this that singles out certain countries, it would be harder to challenge than a similar state law, as rational basis review, rather than strict scrutiny, applies to alienage classifications by the federal government.⁴⁰⁵ Additionally, the Dormant Commerce Clause and preemption arguments would disappear, since they only constrain states.

The enactment of federal legislation would, however, bolster arguments that state laws are preempted. A federal law that did not single out specific countries and instead set some general limits on foreign land ownership across the board, such as a limit on the amount of U.S. land that a noncitizen abroad or foreign business may own, could have a positive effect by displacing state laws that impose much more discriminatory restrictions.

A third possibility is that Congress could explicitly embrace a cooperative approach, specifying that the newly enacted federal legislation does not prohibit states from passing their own laws on foreign ownership of real property. Because this approach would potentially permit discriminatory state laws, it would be wise for Congress to at least set some constraints regarding what types of state restrictions would be permissible to prevent a race to the bottom.

At the end of the day, states and the federal government should be wary of the harm that exclusionary laws inflict. Laws that draw distinctions based on national origin or citizenship are likely to lead to racial or ethnic profiling by realtors, lenders, and others involved in real property transactions, as well as to subordinate minorities more generally. These laws are especially apt to exacerbate discrimination against Asian Americans, Iranians, and others who are already subject to discrimination. Long ago, the Supreme Court recognized that if states were allowed to deny immigrants the right or live and work in their borders, immigrants “would be segregated in such of those States as chose to offer hospitality.”⁴⁰⁶ Alien land laws open the door to this type of segregation.

Property ownership is a crucial means of achieving both financial and social mobility; it provides access to schools, jobs, culture, and community. Restricting property rights has therefore been used as a tool throughout history to disempower certain groups, including women and racial minorities. When we deprive noncitizens of property rights, we prevent hardworking immigrants from achieving the American Dream.

98 S. Cal. L. Rev. 305

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Fatma Marouf*

* Professor of Law, Texas A&M University School of Law. I would like to thank the participants of the Asian American Pacific Islander (AAPI) and Middle Eastern North African (MENA) Women in the Legal Academy Workshop, hosted by CUNY School of Law, as well as the participants of the Clinical Writers’ Workshop hosted by NYU School of Law, for their valuable feedback on a draft of this piece.

Vanessa Casado Pérez†

† Professor of Law, Texas A&M University School of Law, Research Professor, Texas A&M Department of Agricultural Economics. I would like to thank the participants at the Rural West Workshop and Grayson Ford for his research assistance. We are grateful for the hard work of the Southern California Law Review editors.

Exclusionary Megacities – Article by Wendell Pritchett & Shitong Qiao

March 2018July 2018Southern California Law Review Admin

From Volume 91, Number 3 (March 2018)
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Exclusionary Megacities

Wendell Pritchett [*] & Shitong Qiao [†]

Human beings should live in places where they are most productive, and megacities, where information, innovation, and opportunities congregate, would be the optimal choice. Yet megacities in both China and the United States are excluding people by limiting the housing supply. Why, despite their many differences, is the same type of exclusion happening in both Chinese and U.S. megacities? Urban law and policy scholars argue that Not-In-My-Back-Yard (“NIMBY”) homeowners are taking over megacities in the U.S. and hindering housing development. They pin their hopes on an efficient growth machine that makes sure “above all, nothing gets in the way of building.” Yet the growth-dominated megacities of China demonstrate that relying on business and political elites to provide affordable housing is a false hope. Our comparative study of the homeowner-dominated megacities of the U.S. and growth-dominated megacities of China demonstrates that the origin of exclusionary megacities is not a choice between growth elites and homeowners, but the exclusionary nature of property rights. Our study reveals that megacities in the two countries share a property-centered approach, which prioritizes the maximization of existing property interests and neglects the interests of the ultimate consumers of housing, resulting in housing that is unaffordable. Giving housing consumers a voice in land use control and urban governance becomes the last resort to counteract this result. This comparative study shows that the conventional triangular framework of land use—comprising government, developers, and homeowners—is incomplete, and argues for a citizenship-based approach to urban governance.

TABLE OF CONTENTS

Introduction

I. Conceptualizing Land Use in Two Megacities: Property and Political Markets

A. Property Market: State Monopoly vs. Homeowners’ Monopoly

B. Political Market: Growth Machine vs. Homevoters

C. The Voicelessness of Housing Consumers in Megacities

II. Land Use in American Megacities: Concept, Mechanism, and Public Participation

A. Zoning Against Nuisance

B. Homevoters: Not in My Backyard

C. Public Participation (and Reforms): The Example of New York City

III. Land Use in Chinese Cities: Concept, Mechanism,
and Public Participation

A. Planning for Growth (for Some)

B. Urban Planning Commissions as Part of the Growth
Machine

C. Public Participation: The Slow Rise of a Movement

1. Impotent Public Participation in Comprehensive Plan
Formulation

2. Zoning Maps and Adjustments: Housing Owners as Parties of
Interest

IV. Housing, the New Exclusion, and the Way Out

A. U.S. and Chinese Land Use Regulation: Convergence
Toward Exclusion?

B. Toward a New, Inclusionary Regulatory System

Introduction

“To add 45 feet, no matter what you put in it—you could put Mother Theresa in it—it still is a too-tall building.”

—Elizabeth Ashby, Co-Chair, Manhattan Community Board [1]

“[S]trengthen the population control targets through land supply”

—Outline of Shanghai Master Plan (2015–2040)[2]

Human beings should live in places where they are most productive, and megacities,[3] where information, innovation, and opportunities congregate, would be the optimal choice.[4] Yet megacities in both China and the United States are excluding people by limiting housing supply. In the U.S., New York City “has lost a net 529,000 domestic migrants” from 2010 to 2015, in large part due to its high housing costs.[5] In San Francisco, housing production has long failed to match the city’s economic growth, with only 11,000 units added to its housing stock from 2009 to 2015, a period in which the city added over 123,000 new jobs.[6] In China, city governments in both Beijing and Shanghai have reduced the supply of residential land to control population, resulting in reduced speed of population growth in Beijing and population outflow in Shanghai since 2016.[7]

Why, despite their many differences, is the same type of exclusion happening in these two countries? The two countries are fundamentally different in land ownership regimes, land use regulations, and urban governance. Urban law and policy scholars in the U.S. are concerned that Not-In-My-Back-Yard (NIMBY) homeowners are taking over big cities and hindering housing development therein, thereby excluding lower-income and younger populations from the opportunities that those cities offer.[8] Explicit or implicit in their research is hope for an efficient growth machine that makes sure “above all, nothing gets in the way of building.”[9] From an American perspective, growth-oriented elites in cities, including land developers and urban politicians, profit through the increasing intensification of land us [10] Governments in Chinese megacities monopolize land supply, manipulate land use controls, and centralize decision-making processes to promote growth. Such governments would be an ideal for the above American urban law and policy scholars. If their theory about the urban growth machine was correct, however, there should have been no housing shortage in super growth-focused cities in China. Why do megacities in China also limit housing supply?

Our comparative study of the homeowner-dominated megacities of the U.S.[11] and growth-dominated megacities of China [12] demonstrates that relying on business and political elites to provide affordable housing is a false hope. Homeowners do not generally look favorably on newcomers to a city who demand housing and public services, but do not have sufficiently deep pockets to purchase an apartment. Neither do growth-oriented city governments that control resources and have the capacity to make and implement whatever policies they deem to be pro-growth. This Article argues that the growth–machine–versus–homevoter [13] debate shares the same incomplete framework of urban governance, giving no voice to city residents who own no property or businesses, and it calls for citizen-based urban governance to replace property-based urban governance. The Article also furthers that debate by comparing land use controls and development processes in the U.S. and China. At first glance, the two countries appear fundamentally different in the way they approach such issues.

In the U.S., land use decisions have a democratic basis and involve numerous parties, including neighboring property owners, community advocates, appointed and elected officials, and real estate developers. Although many groups engage in the decision-making process, as housing costs in many American cities have increased in recent years, policymakers have become concerned that the end result is restrictive zoning rules that limit mobility and exacerbate income inequality.[14] Many community advocates have expressed concern that local zoning decision-making processes are complex, inefficient, and lacking in transparency, and, as a result, they prevent needed development.[15] Zoning amendments, a major step in real estate development, have frequently been locked into what David Schleicher and Roderick Hills call “one by one” piecemeal bargaining, dominated by NIMBY property owners.[16]

China presents a very different picture of land use control. There, land use regulations are administratively driven.[17] The general public has only nominal rights to participate in the zoning process. Land use power is concentrated at the city administration level under the command of a strong city leader. As a result, city governments can make zoning amendments quickly, with little input from the public.[18] However, the Chinese central government, urban planning officials, professionals, and scholars have exposed significant problems within this “efficient” system and argued that the lack of public participation is endangering the legitimacy of zoning in China and contributing to an inefficient housing market.[19] The Chinese real estate market exhibits a combination of skyrocketing prices in the country’s megacities, which results in the exclusion of middle- and low-income populations (as well as the denial of employment and social opportunities) and housing oversupply in its smaller cities, as symbolized by the numerous “ghost cities” dotting the landscape.[20] In this Article, we focus on housing shortages in Chinese and American megacities.

Although there are major differences between the Chinese and American land use systems, they share the phenomenon of high housing prices becoming a new instrument by which to exclude poorer populations from megacities. China’s megacities, including Beijing, Shanghai, and Shenzhen, have seen demand outpace net new construction since the turn of the century.[21] According to joint research by Joe Gyourko, Yongheng Deng, and Jing Wu, from 2001 to 2014, the housing supply was just 87% of projected demand in Beijing, 70% in Shanghai, and 73% in Shenzhen.[22] In the U.S., there are more than two “extremely low income and very low income households” for every one housing unit affordable to them in New York City.[23] The lack of affordable housing in San Francisco has pushed families out of the job market and the city.[24] In both the U.S. and China, procedural obstacles and the biases of (public and private) property owners are obstructing housing development and reinforcing real estate developers’ inherent inclination toward the construction of expensive housing. The result is a limited supply of new construction, which, when combined with continued demand growth from new residents, has led to significant increases in the cost of housing in megacities.[25] Traditional exclusionary zoning approaches have been used to keep certain populations out of attractive communities and to prevent them from accessing decent affordable housing. For example, racial covenants were used in the U.S. until after the Second World War,[26] and the hukou residency registration system has a long history in China.[27] As exclusionary policies came under attack in the U.S., more subtle forms of regulatory exclusion took hold in the suburbs, the types of processes that led to the Mount Laurel decisions and government intervention.[28] In the twenty-first century, traditional forms of exclusionary zoning continue, and cities are witnessing a growth in obstacles to new development through the processes described in this Article.[29] It is particularly surprising to see such obstacles in China, where, despite driving the world’s most effective growth machine over the past three decades, housing prices in the country’s megacities have skyrocketed.

Why have two such different land use regimes led to a similar form of exclusion? We argue that, despite their different decision-making processes, the development regimes of both countries share an urban governance framework that neglects the voices of the have-nots and is premised on the drive to maximize the value of land for current owners, thereby leading to discrimination against the interests of middle- and low-income populations.[30] We use the Chinese case to demonstrate that, even in super–growth-focused cities, decision-making can lead to exclusion if the politics of urban governance are centered on land value maximization for current owners. The root cause of exclusionary cities is urban governance regimes that prioritize property owners’ interests and voices, at the core of which lies the right to exclude. A fundamental lesson is that urban governance is not only about land or capital,[31] but also about labor and housing consumers, the neglect of whose interests leads to inefficiency and exclusion.

The remainder of the Article is structured as follows. Part I lays out the basic differences of property and political markets between Chinese and American megacities and reveals that despite fundamental differences in land institutions and urban governance, landowners dominate both markets; housing consumers’ voices are weak or zero in both kinds of megacities. Part II examines the origin and structure of zoning in American megacities, focusing on the growth–machine–versus–homevoter hypothesis, exploring the ways in which zoning processes have become increasingly contested and the impact of conflicts over development in American megacities. Drawing on the example of New York City, it then demonstrates that even in megacities where developers would be expected to have influence, property owners dominate zoning processes, leading to the exclusion of middle- and low-income populations. Part III examines urban governance in Chinese megacities, revealing an alliance between government and developers, as well as the growing influence of property owners. We argue that this alliance has led to skyrocketing prices in Chinese megacities, which exclude middle- and low-income populations. The Chinese case reveals that growth–machine elites’ interests are not necessarily in alliance with a greater housing supply. Finally, Part IV concludes by examining the convergence of both American and Chinese megacities towards exclusion and proposes to replace the current property-centered urban governance with a citizenship-based approach to make megacities more affordable and inclusive.

I. Conceptualizing Land Use in Two Megacities: Property and Political Markets

In both the United States and China, supply and demand decide the final land use, and land institutions (i.e., land ownership regimes and land use regulations) shape both supply and demand. Therefore, to conceptualize land use in China and the U.S., we need to understand not only their property markets, but also the political markets of urban governance. The most interesting aspect of this comparison is that, despite fundamental differences in land institutions and urban governance, landowners dominate both markets, and consumers’ voices are weak in both Chinese and American megacities. More specifically, American megacity politics are dominated by existing property owners, whereas in Chinese megacities, the government, as the sole land owner, prioritizes industrial development and favors high housing prices over satiating demand. As a result, land use processes in both China and the U.S. prioritize property owners’ voices and neglect the needs and demands of the have-nots and newcomers to big cities.

A. Property Market: State Monopoly vs. Homeowners’ Monopoly

In China, city governments monopolize land supply and are incentivized to undersupply residential land to grab monopoly rents from consumers. In U.S. cities, the real estate industry is much more competitive. Yet, with the institution of zoning, the supply of housing can be restricted by monopolistic practices. Empirical studies have shown that such monopolistic supply restriction is widespread., originally in suburbs and now even in megacities. In other words, since “zoning power within an urban area is sufficiently concentrated” amongst local homeowners and their representatives, the “supply of housing [in such areas has been] below [optimal], and its price above, those which would prevail in competitive equilibrium with no zoning.”[32] State and homeowner monopolies over the property market are the defining characteristic of land use in China and the U.S., respectively. We can proceed to more detailed description of the two systems with this defining characteristic established.

To compare land use approaches in China and the U.S., it is necessary to clarify the concept of zoning and, more fundamentally, the function of land use regulations. Each society’s understanding of property rights is crucial to its conception of zoning, and China and the U.S. differ greatly in their fundamental understanding of both property rights and zoning. The historic understanding of property rights in the U.S is captured by the phrases “the title of our lands is free, clear, and absolute”[33] and “every proprietor of land is a prince in his own domain.”[34] In other words, private property owners have wide latitude in determining the uses of their property. Although property ownership has always been subject to government regulation in the U.S., the libertarian view captured by the foregoing phrases has shaped the legal rules governing the strength of private property rights and the limited role of the government in determining those rights. The primary justification for zoning in the U.S., as represented by the Euclid decision, is the need to prevent negative externalities that may result from individual land use decisions.[35] The goal of the zoning rules developed to regulate land use was to prevent any interference with the rights of neighboring property owners: i.e., the government plays the role of regulator to protect private property interests.[36] However, the problem with a land use system based on private property rights is that “housing owners can employ growth controls to cartelize housing supply.”[37] “If consumer demand for residency in a [place] is not completely elastic,” which is always the case in megacities, homeowners’ interests are allied with limiting housing supply to maintain or even increase the market value of existing housing.[38]

In contrast, local governments in China are the primary land owners and suppliers within their jurisdictions. Zoning is a recent concept, adopted as part of the country’s market reforms. Historically, the government has controlled land directly through ownership.[39] Urban planning is a more commonly used term than zoning in China, and it follows the economic planning tradition. It is a powerful weapon for local governments to achieve their city management objectives. In the planned economy period, land use decisions were part of development decisions.[40] The central and local governments formulated five-year economic development plans, implemented through a variety of projects. The governments controlled the plans for such projects, including their locations, how much land to use, and what facilities needed to be built. Hence, land use decisions were not independent, but rather part of, and inferior to, overall project decisions.[41]

The strength of such economic plans was the centralized decision-making process, whereby the government determined the appropriate land use and made decisions concerning individual land parcels by taking into account the overall development picture. The problems with such centralized planning are also obvious, including the potential misallocation of resources and neglect of individual interests. The market reforms launched in the 1980s dismantled the planned economy, resulting in various economic activities being freed from central government control. China promulgated its first urban planning law in December 1989, making urban planning permits a separate requirement in the land use permit system.[42] In the years since, urban planning in China has gradually moved in the direction of American-style land use regulations, with the further retreat of government power from economic activities and the expansion of individual property rights. Today, the government plays a dual role in the development of land: it is both the primary land supplier and the land use regulator. As the primary land supplier, the government is able to define the scope and content of individual land use rights in land use assignment contracts with individual land users.[43] It can then further regulate individual land uses through its regulatory power, similar to the power of local governments in the U.S.

The U.S. and Chinese systems started from very different, almost polar, positions, with the former focused on private rights and the latter on government privilege, but over time the number of similarities between the two have increased. Land use control in China originated in the planned economy, as noted, with the state exercising control over land as both land owner and economic planner. However, with the ongoing shift toward private property ownership, the government’s power to shape development has become more circumscribed. In the U.S., the land use system began with little government intervention, but over time the government’s role gradually increased, and today local governments play a meaningful role in directing development. These two different, but converging, frameworks have shaped the development process in both countries. Nevertheless, the government monopoly of the land market is still the defining characteristic of land use control in China. In the U.S., as discussed in more detail in the following section, homeowners also cartelize housing supply through their control of city governments. A monopolized market does not generate optimal housing, regardless of which entities are doing the monopolizing.[44]

B. Political Market: Growth Machine vs. Homevoters

Urban governance has long been described as a war between growth elites, such as land developers, and homeowners, who are also voters. In 1976, Harvey Molotch coined the term “growth machine” to describe the efforts of the former group:

A city and, more generally, any locality, is conceived as the areal expression of the interests of some land-based elite. Such an elite is seen to profit through the increasing intensification of the land use of the area in which its members hold a common interest. An elite competes with other land-based elites in an effort to have growth-inducing resources invested within its own area as opposed to that of another. Governmental authority, at the local and nonlocal levels, is utilized to assist in achieving this growth at the expense of competing localities. Conditions of community life are largely a consequence of the social, economic, and political forces embodied in this growth machine.[45]

In the same article, Molotch speculated that “the political and economic essence of virtually any given locality, in the present American context, is growth.”[46] However, also in the 1970s, homeowners began to erode the power of the pro–development growth machine coalition. According to William Fischel:

[U]nprecedented peacetime inflation, touched off by the oil cartel OPEC, combined with longstanding federal tax privileges to transform owner-occupied houses into growth stocks. The inability to insure the newfound value of their homes converted homeowners into “homevoters,” whose local political behavior focused on preventing development that might devalue their homes.[47]

Originally, this occurred in the suburbs, but recently homevoters have also begun to overtake the growth machine in big cities.[48]

A typical land use dispute is therefore a drama featuring three main players: the developer (the main actor in the growth machine), neighbors (i.e., neighboring homeowners, along with, in U.S. megacities, the renters whose neighborhood longevity has created a vested interest), and the local government. The developer “triggers the dispute” by proposing to carry out a controversial activity.[49] The neighbors of the land under dispute constitute “the developer’s first and main line of opposition.”[50] The local government in whose jurisdiction the land is located is then the “principal institution” tasked with “reconciling the competing interests” of the two other parties.[51] This triangular framework dominates discussions of land use disputes in both land use casebooks [52] and law review articles.[53] The way in which the framework unfolds depends on the decision-making mechanisms, which can be simplified into three models.

The first can be called the “omniscient dictator” model. Land use decisions are made by a dictator who has the ability to costlessly determine the relative value of different land use arrangements. The second model is a more democratic or majoritarian model, in which proposals are accepted or rejected by some sort of majority vote by a representative decision-making body. At first blush, land use decisions in China fall under the dictator model, with an authoritarian local government deciding what is appropriate and individual property owners lacking any say in the matter, whereas those in the U.S. fall under the democratic model, as the mayors and city councils making decisions are elected, and zoning decisions are often subject to a democratic vote.

However, neither model provides an ultimate answer to the question of who decides which projects go forward. In the Chinese dictator model, we still need to determine what the dictator considers in making decisions, whereas in the American democratic model, we still need to determine what constitutes a majority. This is where the third model, the “influence model,” comes in. The Chinese “dictator” does not have all of the information necessary to make land use decisions, and thus decisions are based on various policy considerations as influenced by a range of interested parties, including real estate developers but also industrial land users and neighboring homeowners, who cannot vote but who can exercise influence in other ways.[54] In the American democratic model, what constitutes a majority is a difficult question to answer, as a small number of property owners often wield disproportionate influence, with the views of other members of the community neglected. City councilors make decisions with imperfect information and under the influence of various interests. Accordingly, the influence model explains land use decisions in both China and the U.S. better than either the omniscient dictator or democratic models.

Throughout U.S. history, homeowners were not against development when they themselves were part of the growth machine and benefited from additional development. According to Fischel, the rise of suburban America and the separation of home from work led to the NIMBY movement, resulting in the displacement of the growth machine.[55] Homeowners concerned about the value of their property, and the homeowners associations that represent them, took control of local governments, exercising a dominant influence in zoning decisions.[56] In China, by contrast, homeowners are not particularly powerful, although their influence is growing in conjunction with their rise in both numbers and power. Chinese cities are also considered super growth machines, and thus pro-development, although that has not prevented them from becoming exclusionary.

Land use decisions are subject to the dynamics of the political market, which, as Douglass North wrote, concern “the underlying rules that are the incentive structure of an economy—property rights, contracting, and credible commitment.”[57] North further highlighted two problems in political markets. The first is that there may be imperfect information and cognition—that is, one must ask how well the representatives of various interests know their interests and whether “the collective outcome [is] rational, in the sense that policies could have been devised that rendered all concerned better off.”[58] Correcting for this, Hills and Schleicher argued that local governments can combat NIMBYism through comprehensive city-wide plans, ensuring that the potential burden of new development is widely shared.[59] Residents do not oppose all new construction, they pointed out. Rather, they worry that they will be forced to accept more than their neighborhood’s “fair share.”[60] To combat homeowners’ strong aversion to development in their neighborhoods, Hills and Schleicher proposed a budget zoning system that renders the overall costs to individual neighborhoods much more visible. To address the same problem, Fennell proposed decoupling the investment volatility associated with off-site influences on housing from the homeowner’s bundle,[61] whereas Fischel proposed “reduc[ing] the tax advantages of homeownership” and “equaliz[ing] the tax treatment of capital gains from housing with that of other assets.”[62] Albeit through different means, all these scholars try to address homeowners’ concerns about property values and their strong aversion to development.

The second problem highlighted by North is credible commitment: constituents vote for representatives who commit to protecting their interests—indeed, Fischel’s confidence in homevoters requires the assumption that city councilors are bound by their commitments [63]—but representatives may later be captured by interest groups and fail to honor their commitments.[64] The growth machine hypothesis falls into this category: city councilors and urban planning officials violate their commitments to homevoters and decide in favor of growth elites instead. Under this theory, growth elites distort the political market, leading to inefficiency.

Contracting costs or transaction costs are another problem. Hills and Schleicher argue that “decentralized” and “lot-by-lot” zoning decisions impede development by raising developers’ costs of lobbying for still more development.[65] The solution, they averred, is to elevate zoning decisions to a city-wide system.[66] A comprehensive and binding plan would both ensure credible commitment—through a package deal guaranteeing community representatives on city councils that their constituents will not bear disproportionate burdens—and also greatly reduce transaction costs.[67] This idea of metropolitan urban planning derives from the long-standing U.S. debate over planning versus zoning, dating back to as early as the 1950s.[68] American cities have never taken comprehensive plans seriously, despite academics advocating for such plans.[69] But Chinese cities have well-designed comprehensive plans. The making of such plans proves to be more challenging than academics imagine, and their effect is more limited than academics expect.[70] Would comprehensive plans work in New York City or San Francisco? We do not know for sure. Do comprehensive plans work in Beijing or Shanghai? By the standard of providing affordable housing, the answer is no!—they are instrumental in reducing, rather than increasing, affordable housing. Either way, though, whether to use comprehensive plans or piecemeal deal–making is a secondary question for those who participate in the decision-making process.

That leaves us with the preliminary question to any bargaining: the initial allocation of property rights. Defining who is entitled to what is a precondition of any market exchange, and political transactions are no exception. Property rights on the political market mean entitlement to political bargaining. In both the American and Chinese cases, the power of property owners outweighs the influence of others in the decision-making process.[71] Even with the above proposals in place, housing is likely to continue to be the most important investment that most people make, and homeowners’ interests will remain aligned with less development and against competition for public resources from outsiders. If the political market for urban governance does not check homeowners’ growth-control tendencies, any reform measures will likely be of only limited effect. Fischel actually concedes that his proposals may only “slow down the growth of growth controls, not reverse them.”[72] As far as non-property owners who have no direct access to political bargaining, their interests would not be reflected and protected by a property-dominated political market. This is a fundamental problem.

To summarize, the failure of the political markets of urban governance in China and the U.S. cannot be attributed solely to the property owners’ information and cognition insufficiency, the high transaction costs in decentralized decision-making, or the challenge to community representatives to make credible commitments to each other. Entitlement to political bargaining is the first question we need to solve before reaching a more detailed institutional design.

C. The Voicelessness of Housing Consumers in Megacities

There is a fundamental limitation in the aforementioned development triangle in both jurisdictions: it only partially incorporates the interests of the ultimate consumers of the activity in question, i.e., the potential buyers and renters of the housing to be developed. More specifically, Robert Ellickson identified the housing consumers who suffer from exclusionary land use controls, including: “(1) current tenants who like [a city] too much to want to move out . . . ; and (2) all households that move into [a city] in the future;” as well as (3) “tenants who subsequently leave the municipality because their rents go up; and [(4)] potential immigrants to [a city] who have decided not to buy or rent there simply because of the price increase caused by the antigrowth policies.”[73]

In megacities in both China and the U.S., land use decisions are made without full consideration of the ultimate housing consumers, and, in practice, those consumers are rarely sufficiently organized to exert any influence on land use decisions [74] and are given few opportunities to voice their concerns. Theoretically, housing suppliers should care about the ultimate consumers, and therefore speak for them in the process of making land use decisions. However, profit-maximizing developers prefer building more expensive and therefore more profitable housing and are far from perfect proxies for the interests of housing consumers. They are rarely interested in lobbying for middle- and low-income populations, from which they cannot draw sufficient profits to justify their expenses (particularly in areas with high construction and regulatory costs),[75] which is why governments in both jurisdictions often require developers to build affordable housing, a phenomenon that in certain situations is defined as constitutionally controversial exaction.[76] So-called “inclusionary housing programs” are designed to counterbalance the exclusionary effects of developer-driven markets. Although who ultimately bears the costs of exaction is highly debatable, the underlying consensus on the exclusionary nature of real estate development is solid.[77]

Democratic local governments in the U.S. are supposed to represent the interests of middle- and low-income populations; municipal corporations are different from business corporations in the sense that they allow “one person one vote” rather than “one acre one vote.”[78] Nevertheless, the country’s long tradition of municipal corporations strongly favors homevoters. The individuals who are truly able to influence the zoning process are normally property owners, who vote at higher rates than others and express their preferences more robustly.[79] Authoritarian local governments in China monopolize primary land markets in their cities and rely on land sales revenue as a major source of their revenue.[80] They are motivated to keep land prices and therefore housing prices high.[81]

In short, property ownership prevails in both the Chinese and American zoning processes. In this Article, we examine the functions and mechanisms of land use regulations and role of public participation in both jurisdictions to demonstrate the dominating influence of property ownership in urban governance.

If there is no change to the fundamental character of urban land governance shared by these two countries’ megacities, such cities will continue to be exclusionary. Exclusion is not necessarily inefficient or unfair per se. Property owners do have a legitimate claim to preserving their particular living styles and values through land use controls.[82] But such controls should be evaluated in a larger social context, beyond property owners’ interests and values. When an exclusionary community is fungible, i.e., when there are plenty of location options from which consumers can choose, exclusionary policies are tolerable.[83] However, megacities are not fungible. They are the economic and cultural centers of the whole nation and occupy unique, monopolizing positions in the market of places. In such a situation, housing consumers cannot simply exercise their right to exit in order to discipline megacity governments. When they do leave, they may suffer a loss of better career opportunities—the population flow from coastal cities to Texas is an example [84]— and when they do not leave, they either pay higher rents or suffer from much poorer living environments. “Ant tribes” in Beijing—people living in crowded, underground spaces [85]—are examples of this.

Moreover, some proposals assume that real estate developers are appropriate proxies for the needs of future consumers.[86] However, real estate development in megacities is expensive—in capital, risk, and time—which pushes developers to focus on projects that promise the highest return: namely, those that produce more expensive housing. In and of itself, unleashing the market—albeit important—will not fully resolve this problem. In theory, filtering, a process whereby “higher income households move on,” with the “homes or apartments they formerly occupied . . . [being] sold or rented to people with more modest incomes,” generates a large amount of housing stock affordable to middle- and low-income populations.[87] In a 2014 article, though, Stuart Rosenthal rigorously tested the filtering effect and found considerable variation in different parts of the U.S.[88] He noted in particular that severe restrictions on new housing construction have significantly slowed down the filtering process in coastal regions.[89]

Since the market of places cannot effectively discipline megacity governments, everybody, including property owners and consumers, is to some extent trapped in such unique locations, and improving urban governance is the only solution. In the highly monopolized political and property markets, the ultimate consumers who are residents or potential residents of megacities are voiceless. Those who care most about affordable housing have no representatives, and thus their interests are sacrificed, resulting in an inadequate housing supply in both American and Chinese megacities. Inefficient land use regulations persist because they serve the interests of growth elites (in China) and/or homevoters (in the U.S.). In both cases, those without property pay the price of exclusion.

* * *

In summary, despite their fundamentally different origins, the land use regimes in both Chinese and American cities can be understood as examples of the influence model, wherein different parties with conflicting interests exert influence over land use decisions. First appearances suggest that the U.S. and Chinese regimes remain fundamentally different, with property owners dominant in the former, and growth elites in the latter. However, once we link urban governance with property rights, the two jurisdictions begin to appear more similar than different: urban governance in both jurisdictions is based on the pursuit of value maximization by property rights owners. In the Chinese context, a slight caveat is needed: the government is the primary land owner, and thus plays a major role, while rising middle-class homeowners play a minor role. The young, middle-, and low-income populations that own no property are severely underrepresented in, if not totally absent from, the political market of urban governance in both jurisdictions. In the following sections, we present detailed analyses of both regimes.

II. Land Use in American Megacities: Concept, Mechanism, and Public Participation

American property law evinces a strong disposition toward property owners. Protection of private property from government incursion has been an important legal principle since the framing of the Constitution. Although the history of American law can be interpreted as one of increasing government influence over private property, the rights of property owners to control the uses of their property remain strong.[90] The U.S. zoning system must be understood in the context of this framework. However, reliance on the “sanctity of private property” is not helpful when the activities of one property owner impact the enjoyment of another property owner. The zoning system emerged to mediate this tension. Over the course a century of zoning law, the system has come to encompass much more than just a framework to mediate disputes between individual property owners.[91] Zoning shapes the communities in which Americans live, work, and play. It shapes social interactions and strongly influences the opportunities to which individuals have access. As a result, zoning decisions are among the most contested legal disputes in the country.[92] As this Part will argue, in recent years, policymakers have expressed increasing concern over the dominant role that the zoning system plays in America’s economic and social life. No place exemplifies these tensions better than the country’s largest city, New York.

This Part is organized as follows: Section A briefly describes the historic roots of U.S. zoning law, focusing on the role of zoning rules to supplement and add further protection for private property owners in the context of industrialization. Section B discusses the changes in the sociopolitical context in which development happens in the U.S., arguing that the growth machine has, in general, given way to anti-development sentiment in urbanized areas. Finally, Section C focuses on New York City as a place that is struggling to balance public involvement in zoning decisions with the need to increase the amount of affordable housing in the city. New York’s example reveals the very high obstacles facing efforts to make American cities (at least those experiencing growth) more inclusive.

A. Zoning Against Nuisance

Before the twentieth century, land use disputes were resolved as private actions among property owners.[93] This system worked fairly well until industrialization and urbanization dramatically increased the types and intensities of land use and disrupted traditional legal relations. Facing escalating tensions over the appropriate uses of property, American zoning law built on nineteenth-century nuisance law, which granted property owners protections against the acts of neighbors that affected the enjoyment of their property.[94] Property owners at common law often claimed damages from noxious activities in their vicinity, and nuisance claims were, until the early twentieth century, the predominant means by which property owners protected their rights.[95]

As American urbanization increased, many cities built upon these common law rules with legislative provisions protecting property owners against damage from their neighbors’ acts.[96] Industrialization created many new noxious uses, however, and great increases in the population density of American cities resulted in many more nuisance disputes. Governments struggled to balance their desire to promote development with their responsibility to protect property, and they experimented with different approaches.[97] Often the rules granted property owners the right to prohibit a nuisance use unless the property owner obtained from adjacent neighbors a majority (or supermajority) of votes approving the activity. Among the first of these laws was Chicago’s, which prohibited several noxious uses, such as livery stables, unless approved by a majority of the neighbors.[98] Chicago’s law, as well as many others, was attacked as both too restrictive and an inappropriate delegation of government power, but courts generally ruled that these approaches were proper.[99]

Zoning law did not replace private law protections but rather emerged out of them. Zoning was a more “efficient” way to make community-based decisions about appropriate urban land uses. The basic principle of zoning was that urban “zones” separated industrial, commercial, and residential uses, while also differentiating amongst the types of residential use.[100] This separation of uses protected the public interest and property rights, providing security to property owners that their interests would not be damaged by the acts of one another. At the same time, the provision for different types of uses ensured that cities could continue to grow and prosper. Under modern zoning, industrial uses also received protection from the nuisance claims of adjacent property owners. Confident in the security of their operations, owners of industrial concerns could continue to expand their efforts.[101]

Under this new zoning regime, the decision of where to place different uses was often made by professionals who had studied the most efficient ways to allocate land uses and who developed “comprehensive plan[s]” for urban areas that protected the public and promoted economic growth.[102] These comprehensive plans were made with the input of the public, particularly property owners. Both the Standard State Zoning Enabling Act (“SSZEA”) and the Standard City Planning Enabling Act (“SCPEA”)—the land–use frameworks developed by the U.S. Department of Commerce in the 1920s and promoted around the country—required public input in the development of comprehensive plans.[103] This requirement was in accordance with Progressive Era principles of citizen engagement, which envisioned an enlightened citizenry, led by professionals, who would provide meaningful input to guide the public interest.[104]

While comprehensive plans were made with public input, the public’s role in the daily operations of the zoning process was less clear. Under the act, most localities created Zoning Boards of Adjustment (“ZBA”) to administer the system.[105] The role of the ZBA was to hear exceptional cases, where a property owner wanted to use property in a manner not in accordance with the zoning code.[106] ZBAs were envisioned as professional organizations that would objectively determine whether developments met the legal requirements specified under the zoning code for a variance from the general rules.[107] Early zoning advocates believed that planning principles could be developed that would promote the public interest, and that once these principles were applied to a city it could follow its natural development.[108] As a result, public participation in the variance process was not strictly necessary, although the SSZEA does provide that “all meetings of the board shall be open to the public,” any person “aggrieved” by the acts of a ZBA may appeal its decisions, and any aggrieved person, taxpayer, or city official may sue over “illegal” ZBA actions.[109]

The original zoning acts were vague about the role of the public in the zoning adjustment process itself, though, as advocates believed there would be few variances because plans would accurately capture neighborhood demands and the goals of the market.[110] In addition, any needed variances would be granted by professionals well-versed in planning and zoning.[111] Of course, this objective vision of the planning process came quickly under assault, with ZBAs the locus of heated battles amongst stakeholders over the appropriate uses of property.[112] As a result, over the last fifty years the zoning system has struggled to balance demands for transparent and legitimate decision-making with the desire for efficient operations to promote development.

B. Homevoters: Not in My Backyard

The zoning system in the United States is approximately one hundred years old. That history can be fairly neatly divided into to two equal periods. These names of these two eras—first the “Growth Machine,” followed by “NIMBY” (“Not In My Back Yard”)—succinctly encapsulate the continuing challenge of balancing competing interests in the land use system.

From the 1920s until the 1970s, the Growth Machine framework predominated in American cities and their suburbs.[113] Throughout the country, housing and economic development were seen as almost unqualified positives. Local governments organized around the generally agreed–upon desire for growth. In the post-World War II era, suburban development in the United States skyrocketed, as did the percentage of the American population living in those areas.[114] Fearing the loss of population, business, and, therefore, tax revenues, city governments across the country undertook large–scale efforts to reorganize and make themselves attractive to development.[115] During the “urban renewal era,” which reached its height in the 1950s and 1960s, cities cleared large swaths of land, uprooting their residents and partnering with private developers to build modern residential and commercial facilities.[116] They also rebuilt the urban infrastructure, creating the modern urban highway system (which uprooted even more people than housing and commercial developments).[117]

Most of this activity occurred with little public involvement. Government officials, real estate developers, urban planners, and other elites made these decisions and presented them to the public as faits accomplis. This public acquiescence started to change in the 1960s, with increasing public protests over highway and other clearance proposals, and accelerated greatly in the 1970s when, as William Fischel argues, suburban–citizen revolts over growth added to the objections to urban renewal.[118] The result of this public outrage was that zoning dynamics were radically altered, and for the past fifty years land use regulation has been among the most hotly contested of public topics.[119]

Each year, thousands of neighbors, and others, appear before zoning boards to voice support or, more commonly, opposition to zoning changes or special exceptions/variances regarding specific development projects.[120] Generally, this is a post-1970 phenomenon. Before the advent of modern neighborhood organizations, most zoning board meetings were sleepy affairs.[121] However, the backlash against urban renewal and highway programs (along with other types of neighborhood activism) resulted in a significant increase in neighborhood organizations, and much of the focus of these groups was on preventing or at least shaping development.[122] Neighbors frequently fight against projects that would increase density, affect parking availability, or change neighborhood aesthetics and culture. Their goal is to prevent or at least slow neighborhood development, and, overall, these efforts are successful.[123] For example, in San Francisco, despite the significant demand for housing, neighborhood insistence upon regulations to limit density severely restricts new development. In 2011, the city, which has among the highest housing costs in the country, “added just 269 housing units.”[124]

Because of their crucial role in shaping new development, zoning boards also became the prime venue in which to fight neighborhood racial and social change, both in the cities and the suburbs. As Village of Arlington Heights v. Metropolitan Housing Development Corp. showed, by the 1960s, zoning regulations were an effective means of racial exclusion,[125] and the past forty years, the citizens of New Jersey have debated the 1975 Mt. Laurel decision, which required suburban governments to adjust their land use regulations to provide for the construction of affordable housing.[126] No issue in the state has been more contentious over this period,[127] and there and in many other states, local governments are organized around the desire to exclude certain populations and uses.[128]

Because opponents of development play such a significant role in the zoning process, several states have attempted to regulate their participation. Some, such as Minnesota, are skeptical about neighborhood influence and consider neighbor opposition a factor in determining the (ir)rationality of zoning board decisions.[129] But, in general, local governments have wide latitude to control the shape, scope, and population of their communities through land use regulation. Many legal practitioners, developers, and academics have come to criticize the “neighborhood veto” for its role in impeding development and exacerbating related economic and racial segregation. As Michael Lewyn argues, “This ‘neighborhood veto’ sometimes artificially reduces housing supply and urban density, thus making housing more expensive and making American cities more dependent on automobiles.”[130] However, opposition to new development is the dominant position in much of the country.

C. Public Participation (and Reforms): The Example of New York City

To many observers, New York City is the quintessential example of a “growth machine” city. Real estate development has always played a central role in the city’s economic life. The real estate sector is one of the largest in the urban economy, and real estate was, and is, the foundation of many of the city’s largest fortunes.[131] Real estate developers in New York City have had a major influence on the shape of the city as well as its politics and culture. Few cities did more during the urban renewal era to reshape themselves to be even more responsive to modern commercial and residential development. New York’s master builder Robert Moses—“The Power Broker”—remains for many the face of urban redevelopment.[132] However, New York is and always has been a city of neighborhoods, and those neighborhoods have frequently pushed back against development. Today, as in many times previous, the growth machine and the neighborhoods are at odds.[133] As with many aspects of this city, the struggle has implications for land use conflicts elsewhere.

Given that it was the first city to pass a zoning law, it is not surprising that New York also has the most developed structure for community participation in land use. In 1951, Manhattan Borough President Robert Wagner created a series of neighborhood advisory boards to help him make decisions on land use and development, and these “Community Planning Boards” were incorporated into the city planning structure with the passage of the revised city charter of 1963.[134] Updated in 1968 and again in 1975, the city created fifty-nine community planning boards, each of which has authority to develop comprehensive plans for their district or parts of it.[135] Appointed by the Borough President, each board can have up to fifty members. The boards also have authority to “cooperate and consult with local administrators of city departments and agencies,” and “to cooperate with other boards on matters of common concern.”[136] Under the Uniform Land Use Review Procedure (“ULURP”), also created in 1975, community boards have sixty days to review and make a recommendation on any development project that is required to have approval of the borough president. Community board recommendations are only “advisory” and do not have any legal weight either in the planning process or upon the decision of the borough president.[137]

Over the years, community planning boards have been criticized both for being too influential in preventing development and for being ineffective representatives of the community against powerful development interests.[138] Critics have also raised questions about the qualifications of community board members and the representativeness of boards.[139] While, in theory, community boards can develop comprehensive plans, the budgets provided for these organizations do not support such efforts, and many boards have had to raise outside funding to support their activities. Not surprisingly, studies have found that community planning boards in wealthy neighborhoods have higher capacity and more influence than those in poorer neighborhoods.[140]

But the influence of community boards has definitely increased over time, as was particularly evident during the neighborhood rezonings initiated by the administration of Mayor Michael Bloomberg. From the beginning of Bloomberg’s term in 2002, the administration, arguing that the city’s zoning resolution—dating to 1961—was outdated, undertook more than 100 neighborhood rezonings, with the goal of modernizing the regulations in these districts to make them more responsive to community needs and development trends.[141] In most of these rezonings, the community planning board played a central role, and, in general, that role was to protect the neighborhood against higher-density development. In a comprehensive study of this initiative, Vicki Been and her colleagues concluded that while the totality of the rezonings resulted in a city-wide 1.7% residential capacity increase, more parcels were “down-zoned,” to place greater restrictions on potential future development, than the number of parcels that were “up-zoned.”[142] Furthermore, many of the parcels that were down-zoned were in areas close to mass transit or other amenities that, under “smart growth” principles, made them appropriate for higher-density development.[143] The result in many neighborhoods was that properties that could have been used to meet increased housing demand in the city were, at least temporarily, removed from the potential development inventory.

Like many other U.S. cities, New York currently faces a significant housing affordability problem. A significant percentage of the population pays more than half of their income for housing.[144] While the city is experiencing a development boom, almost all of the new housing is for the highest income residents. In Manhattan the average sale price for a one bedroom apartment exceeds $1 million.[145] Unmet housing demand has resulted in a dramatic increase in housing prices in many parts of the city, and developers looking to meet that need have increased construction in previously-ignored neighborhoods.[146] A recent analysis of housing in the city determined that 34.3% of city neighborhoods were experiencing gentrification.[147]

Long major political issues, housing costs and neighborhood changes were central to New York’s 2013 mayoral election. During his campaign, Mayor Bill de Blasio gave great attention to the city’s housing shortage City, specifically the lack of affordable housing to support the city’s poor and working-class residents.[148] A year after his election, de Blasio introduced a major housing plan, proposing initiatives to develop and/or preserve 200,000 units of affordable housing.[149] The program, controversial from its introduction, included a wide variety of approaches to the challenge of affordable housing, including: (1) funding programs for renovation and construction of new housing; (2) “inclusionary zoning” requirements for developers, giving them “density bonuses” for including affordable housing in projects; and (3) zoning law changes to eliminate barriers to development and allow for higher–density development in some areas.[150] Among the areas of regulation the administration proposed to re-examine were “parking requirements, zoning envelope constraints, and restrictions on the transferability of development rights.”[151]

Mayor de Blasio’s housing plan was immediately criticized by affordable housing advocates, who complained that it did not produce enough housing for low-income citizens and that the inclusionary zoning requirements did not demand enough from real estate developers.[152] The plan was also criticized by community planning boards across the city, many of whom were concerned by the impact that higher–density development would have on their communities.[153] “We want a mixed-income population . . . . We want parking for the seniors and for any new buildings coming in,” stated a community board chair in the Bronx, echoing concerns expressed by many regarding the impact of new development.[154] Further, the Queens borough president stated that community boards in many neighborhoods were worried that allowing more development would result in the conversion of existing affordable housing and dislocate current residents.[155] According to one paper:

Community meetings have turned long and contentious, sometimes with dozens of residents lining up to testify against the proposal. The opposition ranges from concerns that more development will
bring gentrification and higher real estate costs that would displace some longtime residents to complaints that more density will overwhelm the transit and school systems.[156]

More than three-quarters of the city’s community boards, and all five of the borough boards (consisting of the chairs of the community boards and political leaders) opposed de Blasio’s original plan.[157] Much of the opposition focused on fears of higher-density development, loss of parking, and neighborhood change. As a member of Community District 8 in Queens stated, “[w]e are very concerned, as are people all over, that we do not become a high-density neighborhood, full of people and crowds.”[158] “To add 45 feet, no matter what you put in it—-you could put Mother Theresa in it—-it still is a too-tall building,” said the co-chair of Community Board 8 in Manhattan.[159]

In low-income neighborhoods, particularly those of color, community leaders expressed concern that the mayor’s plan was a mechanism to open their communities to gentrification and racial change. State Assemblyman Charles Barron argued:

They’re going to tell you that unless there’s a diversity of incomes, we’re not going to be able to build our economy. What this means, translated? You need white folks down here. If you want to have an economy, you need white folk here. If you want to get transit stuff, you need white folk to come in. If you want to get a new school, you need white folk to come in . . . They want to make this place look better, to gentrify it.[160]

In the end, despite the no votes of a majority of community planning boards, the New York City Council approved an amended proposal in 2016. The revised proposal met some of the criticisms of the original, significantly increasing developers’ inclusionary zoning requirements and altering the income levels for new-housing eligibility. The de Blasio administration organized a vocal and influential coalition of labor organizations and advocacy groups to argue that the proposal would significantly increase the amount of affordable housing in the city.[161]

But the fight against increased density and other zoning reforms is far from over. In order to spur housing development, the administration must now undertake the task of “re-zoning” individual neighborhoods for new development. Community planning boards will have more opportunities to oppose these plans. Although the first rezoning, in the East New York section of Brooklyn, was approved, the administration will continue to face significant challenges managing public participation in the process of zoning approval.[162]

Opposition to increased density has also stalled housing plans in Seattle and San Francisco, two cities with among the highest housing costs in the country. In Seattle, Mayor Ed Murray had to disavow his administration’s draft housing plan, which proposed allowing multi-family dwellings in many of the city’s single-family zones.[163] In San Francisco, a plan by Mayor Ed Lee, permitting developers to build two stories higher than zoning allowed in return for making 30 percent of the units affordable for middle-income families, also faced significant opposition from neighborhood advocates.[164]

America’s largest cities play an outsized role in the U.S. economy, with “[t]he combined annual gross product of the country’s 10 largest metropolitan areas [being] greater than the combined GDP of 36 states.”[165] Between 2012 and 2015, more than 90 percent of the new jobs created in the country were located in its largest urban areas.[166] As a result of this economic power, migration to these areas will continue, and thus they will also continue to be challenged by housing shortages. At the same time, growth pressures will continue to play a major role in urban politics, as current residents push back against new development. Developing mechanisms to support additional housing, particularly for low– and middle–income residents, is crucial to the success of America’s largest cities, and it is a problem that must be confronted by restructuring the spheres of influence in the land regulatory system.

III. Land Use in Chinese Cities: Concept, Mechanism, and Public Participation

As in the U.S., urban planning in China has contributed to the exclusion of middle- and low-income populations from first-tier cities—Beijing, Shanghai, and Shenzhen in particular. The urban planning policy is pro-growth and business-friendly, but not necessarily pro-consumer. As the primary landowner, city governments are the major players in the Chinese real estate market. Although middle- and low-income populations provide the labor upon which cities rely, local government preferences are for profit-making and revenue-generating businesses, and their reluctance to provide public goods (e.g., education, health care, and transportation) to serve those populations has shaped government priorities and resulted in housing shortages.

Government-led, property–owner-focused planning has excluded the poor and the young from the first-tier cities in which the most promising career opportunities are concentrated. Primarily, and most directly, poor and young people cannot afford to live in big cities. City governments also squeeze them out by limiting their access to schools, health care, and other services. Secondarily, skyrocketing housing prices have fostered private property consciousness in China, with private property owners—somewhat ironically—joining the governments’ efforts to exclude newcomers, partly because of perceived competition for services. Furthermore, like their counterparts in American megacities, property owners are increasingly sensitive to property value changes. The NIMBY phenomenon has come to China!

The remainder of this Part is structured as follows. Section A sketches out the concept and structure of urban planning in China and discusses how it has become a powerful weapon in the hands of growth machine elites. Section B discusses the establishment of urban planning commissions, with members from outside the government, as an effort to democratize the decision-making process, as well as the limitations of this initiative. Finally, Section C discusses the rise of public participation in Chinese urban planning and describes how democratization has made Chinese megacities more exclusionary. The three factors have combined to promote exclusion in Chinese megacities.

A. Planning for Growth (for Some)

Leading political scientists and economists refer to China’s governmental structure as “market-preserving federalism.”[167] Under the country’s economic reforms, city and county governments have been given greater autonomy and incentives to manage their own economies, with competition encouraged among them. City and county governments rely on two financial resources: enterprise income tax and land sale revenue.[168] The enterprise revenue framework makes industrial development the top priority of Chinese cities. The land sale framework, which links the operation of local governments to their ability to sell land at high prices, pushes government decisions toward high-value projects, resulting in exclusion.

The urban planning structure in China is complicated, but it can generally be divided into two layers: a comprehensive or “master plan,” and a detailed plan.[169] “The master plan outlines the general land uses of the city, while the detailed plan is prepared for the area that faces immediate construction or is specified in the master plan,” and is similar to zoning in American cities.[170] The comprehensive plans of megacities such as Beijing, Shanghai, and Shenzhen are prepared by city governments and approved by the State Council (i.e., the Chinese central government).[171] Under party leadership, decisions are made by city leaders—usually the city party secretary and mayor—in consultation with other government officials, urban planning experts, and related business interests.[172] Detailed plans govern individual land use decisions and are prepared by the urban planning administration and approved by the city government.[173]

Comprehensive city plans are more akin to economic plans, incorporating strategic positioning, industrial development, population control, infrastructure construction, and other priorities over a twenty-year horizon.[174] In China, such plans are always growth-oriented. For example, the Shanghai City Master Plan (1999–2020) includes sixteen sections covering the scope of city development, goals, directions, industrial development, transportation, and residential development plans.[175] The goal of city development, according to the plan, is to make Shanghai an international center for finance and trade, and urban planning is directed toward achieving that goal.[176] The comprehensive plans of Beijing and Shenzhen share a similar structure and a clear focus on economic and city growth.[177]

Together, these comprehensive and detailed plans determine who can live in Chinese megacities, and they focus on attracting highly educated professionals such as engineers, lawyers, investors, and investment bankers.[178] Those with fewer skills enjoy limited provision in the plans because local governments set population control goals that are often too low. For example, in its comprehensive plan for 2004–2020, the Beijing municipal government planned for a total population of 18 million by 2020.[179] However, the city’s total population exceeded 19 million by 2010.[180] Similarly, in its comprehensive plan for 1999–2020, the Shanghai municipal government forecast a population of 18.5 million by 2020, whereas the city’s total population in 2013 was already more than 24 million.[181] Such population targets shape land use decisions by pretending that housing demand is smaller than it actually is.

Shenzhen is probably the most extreme case, with a planned population that lags far behind its actual population growth. In the city’s first comprehensive plan, the estimated population for 2000 was 840,000, a figure that was already far exceeded by 1994, when the population reached 1.5 million. In the second comprehensive plan, issued in 1996, the projected population for 2010 was 4.3 million, whereas Shenzhen’s population in 2000 stood at 7 million.[182] The city is currently home to more than 15 million people, although its current plan estimates a population of just 11 million by 2020.[183] The population targets in these plans determine the planning of public transportation, public utilities, schools, hospitals, the police force, and many other public goods crucial to city functioning. Public services in Beijing, Shanghai, and Shenzhen have been planned in a way that is never going to meet the demands of their rapidly expanding populations, as evidenced by their public transportation systems, which are severely crowded relative to those of New York.[184]

Detailed plans are used as a way to regulate land development and control the location and density of real estate projects, but they are not necessarily opposed to development. The success of individual projects depends on whether they serve planned city development goals or the preferences of city leaders. Newspaper reports on corrupt local government leaders often reveal the way in which they have used urban planning to facilitate their idiosyncratic ideas about urban development and/or favor one or a few developers to help them realize those ideas.[185] Research on Beijing concluded that when a zoning amendment was directly ordered by a government leader, it had greater than 90 percent likelihood of approval. Compared with factors such as development density, location, and the nature of a project, government leaders’ instructions were the most significant factor in determining the result of zoning amendments, according to the same study.[186]

B. Urban Planning Commissions as Part of the Growth Machine

To combat the arbitrariness of government-led development decisions, many Chinese cities have established urban planning commissions. Shenzhen was the first city to experiment with such a commission in 1998; this subsequently became a model for other. The Shenzhen Urban Planning Commission enjoys the power to review comprehensive plans and to approve detailed control plans (i.e., zoning maps). It has twenty-nine members, fourteen of them government officials, with the mayor serving as chair. The other government members are directors of relevant bureaus and urban district presidents. The fifteen non-government members are professors, real estate professionals and managers, urban planners, public utility company managers, and other community members. Decisions must be approved by two-thirds of attending members and no fewer than half the total number of commission members.[187]

Such strict procedures are designed to confer legitimacy upon urban planning in Shenzhen. In theory, the rules are supposed to prevent the government or political leaders from dominating the planning process. In reality, however, the non-government commission members primarily raise easily resolved technical issues. Few people in the city would seriously challenge a project that city leaders had decided to push through. The non-governmental members of the commission are selected to represent the general public interest, rather than special or particular interests.[188] The Shenzhen Urban Planning Commission is thus not designed as a forum for bargaining by various stakeholders, although in reality members from the real estate industry frequently promote their sector’s agenda in the name of public interest.[189]

Even such limited public participation proved intolerable to the Shenzhen city government, with officials viewing it as too time-consuming and inefficient. From their perspective, city development could not wait for extensive reviews and discussions within the commission.[190] As a result, the city government revised its urban planning regulations in 2001 and redrafted the Shenzhen Urban Planning Commission Charter.[191] The reform provided for smaller special commissions—most notably the Commission on Zoning Maps, which is charged with approving detailed plans and any variations to them. This commission comprises nineteen members, nine of whom are also government employees of the Shenzhen Urban Planning, Land, and Resources Commission, a super–government bureau combining the powers of land administration and urban planning. Among the other ten members are urban planners and engineers from the Shenzhen Urban Planning Institute and other public institutions, environmental and agricultural officials, a professor from Shenzhen University, and a real estate appraiser. Given that nine of its members are from the Urban Planning, Land, and Resources Commission and some of its non-governmental members are closely associated with them, the Commission on Zoning Maps is clearly dominated by the government, and has become an efficient agency for implementing city leaders’ business plans.[192] In addition, faced with an increasing number of cases, the Shenzhen government has delegated part of its power to approve zoning amendments to the urban district planning bureaus to achieve greater efficiency.[193]

What we see in the Shenzhen case is a tradeoff between legitimacy and efficiency. Even a limited broadening of public participation reduced decision-making efficiency, and thus found itself in tension with city development. As the primary suppliers of land for housing, city governments in China also try to maximize their profits from the land market. Because most local government functions are funded through land sales, the land price that governments can secure is crucial to their sustainability. City governments thus create a “hungry supply” (i.e., an insufficient supply that is never able to catch up with demand) to push up land and housing prices in order to harvest monopoly rents from the market. The resulting skyrocketing housing prices have made the lives of cities’ middle– and low-income populations very difficult and, in many cases, pushed them out while also excluding potential incomers.

To further reduce housing supply and drive up housing prices, city governments strictly control residential development density. According to urban planning rules, the highest floor–area ratio (“FAR”) for residential plots in Beijing is 2.8.[194] The corresponding figures for Shanghai, Guangzhou, and Shenzhen are 2.5,[195] 3.0,[196] and 6.0, respectively.[197] In comparison, the residential FAR in New York City can be 10 or even higher.[198] The first reason for city governments to limit residential development density is that they are concerned that high-rise residential buildings will attract too many residents, thereby exceeding the capacity of public facilities. The second reason is that they wish to control the total amount of available housing on the market in order to maintain high housing prices and, in turn, the high land prices which are crucial to government land–sales revenue. Let us think about a simple illustration. Suppose that a city mayor decides that the total amount of housing units should be limited to 1,000 during his term—the mayor can then choose to sell 200 plots of land with a FAR of 5, or 500 plots of land with a FAR of 2. The 200 plots of land may sell at a higher price per plot than the 500 plots of land. But considering two additional factors, the total land sales revenue from the former is actually less than the latter: first, low-density housing is of higher price per unit; second, low-density housing puts much less burden on public infrastructure. Moreover, city governments always choose to sell more land rather than increase FAR, given their power to take land from farmers, with compensation equal to the agricultural value, and sell it to developers at a much higher price, reflecting the development value.[199]

Real estate developers do lobby city governments for more density after they buy land from them. Like their counterparts in many other countries, real estate developers also invest in relationships with government officials, sometimes building up corrupt ties. However, even considering ex post adjustments and imperfect compliance, land use regulations in China still impose a highly restrictive constraint on urban land development. A recent empirical study investigated land developers’ compliance with FAR, using a unique set of 854 pairs of land parcels and corresponding residential development projects across thirty major Chinese cities. In 181 of these 854 cases, the land developers exceeded the regulatory upper limits set when the land parcels were acquired. “The developers adjusted the FAR upward in 21.2% of all the cases, covering approximately 25.2% of the total land area developed. . . . Including all 854 cases, the total ﬂoor area was increased by 4.3% beyond the total regulatory limit due to upward adjustments of FAR.”[200] The study also estimated that “there exists a signiﬁcant gap between the FAR that maximizes the market land value and the regulatory FAR. . . ; “[c]orruption may facilitate an upward adjustment and reduce the gap, but only modestly.”[201] Overall, this first empirical study “suggests that FAR regulations have imposed a highly restrictive constraint on China’s urban land development even in the absence of strict compliance.”[202]

Detailed plans also determine the ratios of industrial, commercial, and residential land. On average, industrial land occupies more than 20 percent of total buildable land in Chinese cities, a much greater percentage than in other countries.[203] From 2009 to 2014, twelve major Chinese cities— including Beijing, Shanghai, Guangzhou, and Shenzhen—zoned more than 40 percent of their annual land supply for industrial use.[204] Chinese cities have thus seen too much land zoned for industrial development and too little for residential development. Moreover, the development density of industrial land is often very low. According to the Chinese Ministry of Land and Resources, the FAR of industrial land in Chinese cities is about 0.8, on average, whereas the figure ranges from 1.0–2.0 in developed countries.[205] Partial reasons include the unexamined assumptions that industrial companies require large factories and that it is infeasible to move large machines to tall buildings, although in many cases neither is true: many industrial companies do not require large machinery, and it is not always difficult to install such machinery in high–rises, as evidenced by Hong Kong and other places in which land is used more efficiently.[206] However, industrial investors have no incentive to make more efficient or intensive use of land that is assigned to them by the government cheaply, or even at no cost. A comparison of industrial land prices and the prices of other types of land reveals industrial land to be, on average, about one-sixth the price of residential land in 105 major Chinese cities.[207]

In conclusion, the growth machine of Chinese cities is sufficiently powerful to control the decision-making processes of land use, and cities use that power to maximize land sale revenues and promote economic growth based on industrial development. The result has been a limited housing supply and controlled residential development density, which in turn contribute to skyrocketing housing prices and the exclusion of lower-end housing consumers from megacities.

C. Public Participation: The Slow Rise of a Movement

China’s reforms have maintained the political structure of the party state while liberating the economic sector, allowing individuals to own housing and hold land use rights within a system of strict government control. In the wake of economic development and urbanization, though, city management became more complicated, and the interests of various parties within a city are increasingly interconnected. Urban planning decisions increasingly affect the lives of property owners; combined with growing awareness of and sensitivity to property values, this has led to greater public participation in urban planning decisions. The Chinese central government’s role in this system is complex. Although supportive of local government autonomy, the central government sees public participation as a way of constraining abuses of power by local officials. As early as 2000, the then–Minister of Construction, Yu Zhensheng, emphasized the importance of public participation to urban planning.[208] In 2006, the Ministry of Construction promulgated urban planning ordinances that made public participation a principle of urban planning. The ministry also stipulated that urban planning drafts and detailed plan amendments must be open to public opinion and publicize the results of public surveys before the approval process could be completed.[209]

At the local level, city governments view public participation as a way of promoting public acceptance of urban planning decisions, partly in response to bottom-up pressure. For example, the 2003 revision to the Shanghai’s urban planning regulations highlighted the importance of public participation and made listening to public opinion an urban planning requirement.[210] More specifically, it required the city’s planning agency to publish detailed plans and organize meetings and hearings before submitting those plans for approval. The rules also stipulate that the city government should report to the city-level People’s Congress or its standing committee annually to strengthen the monitoring of urban planning.[211] In the same year, Beijing’s urban planning committee also made an effort to institutionalize public participation practices by promulgating the Beijing City Interim Rules on Urban Planning Publicity.[212] From November to December 2004, the committee also publicized its draft of the revised Beijing City Comprehensive Plan to solicit public opinion.[213] In 2006, Shenzhen followed suit, again emphasizing the importance of public participation by soliciting public opinion on its comprehensive plan for 2020. It even changed the strategic positioning of several urban districts in response to public opinion.[214]

These local initiatives culminated in the incorporation of public participation in the country’s 2007 Urban and Rural Planning Law (“URPL”), which for the first time established a national legal framework for such participation in urban planning.[215] Article 26 of the URPL states that drafting agencies should make drafts of comprehensive plans available to the public for at least thirty days and organize meetings, discussions, hearings, or other forums to solicit both experts and public opinion.[216] The agencies should then consider such opinions carefully and attach a relevant report in their submissions for approval. Recent changes to the URPL have given neighbors more influence over development decisions than they enjoyed in the past. The current rules require agencies proposing a zoning amendment to solicit the opinions of “parties of interest” (“PoIs”) in the area. They also conclude that detailed control plans—which impose specific restrictions on land development—directly affect the interests of those parties, and therefore their opinions are required before modification.[217] Another section of the URPL establishes the same requirement for variations to detailed building plans, and require that PoIs be compensated where zoning variances result in property value losses.[218] These stipulations in the URPL signal significant progress in public participation in Chinese urban planning. However, the limitations are also quite apparent. Comprehensive plans are often too broad and vague for meaningful public participation, whereas detailed control plans and zoning variations are limited to PoIs with a clear entitlement and specific interest in judicial or administrative procedures.[219]

1. Impotent Public Participation in Comprehensive Plan Formulation

As discussed above, comprehensive plans focus on the strategic positioning, grand goals, and plans of a city. They are drafted by professional urban planners, and are often too complex for individual participation. They represent the intention and will of city leaders, to be implemented by urban planners and legitimated to some extent by a veneer of public participation. It is argued here that public participation faces three main problems in drafting comprehensive plans.

First, the timing of public participation comes quite late in the process. According to the URPL, public opinion should be solicited before the draft plan is submitted for approval. In other words, the plan has been drafted before any public input, and the public has limited options for making substantial changes to it. The drafting agency does not usually expect any overhaul of its draft plan. Urban planners use their own models, mechanisms, and terms in drafting comprehensive plans, and do not expect laypersons to understand the process, let alone engage in any meaningful participation. Individual complaints are often rejected with reference to the “science” of comprehensive plans and the interconnectedness of a city’s various goals within those plans.

Second, comprehensive plans are generally too broad and too vague to foster substantial public participation. The URPL reflects a lack of clarity regarding the purpose of participation as well as who should participate. The URPL offers no clear definition of who constitutes the public in law— which means that anyone can participate in theory, but only certain members of the public have the capacity and motivation to engage in the process in practice. This lack a clearly defined explicit entitlement to public participation also results in a lack of structure for that participation. The primary avenue of participation—as in the U.S.—is public hearings. However, there are no clear rules for public hearings in China. Given the lack of guidance on who should participate, public hearings often turn into a public show put on by local government officials and the urban planning experts they invite. Hence, public participation is largely symbolic, especially given that members of the public are often less interested in comprehensive plans than they are in specific neighborhood projects.[220]

Finally, the URPL is unclear about the consequences of neglecting the public participation requirement. It simply requires a drafting agency to submit a report responding to public opinion without specifying any consequences sufficient to force meaningful participation. For all of these reasons, the so-called public participation movement has not lead to better urban planning. Nor has it changed the administrative-driven nature of urban planning or counterbalanced the influence of growth machine elites.

2. Zoning Maps and Adjustments: Housing Owners as Parties of Interest

In contrast to the lack of clarity surrounding “the public,” PoIs have specific rights, including the right to request information on construction projects that might affect their interests and the right to initiate administrative (and even private) litigation if their property rights are violated.[221] Both administrative and judicial agencies in China equate PoIs with housing owners. If you own an apartment in a neighboring area, you are by definition a PoI; if you do not, you cannot be a PoI.[222] Considering that PoIs were already the most active participants in the drafting of comprehensive plans, the more specific rights and procedures they have been granted at the detailed-plan level afford them even greater power relative to non-property owners. However, PoIs in China are still not satisfied by the administrative and judicial protection of their property interests, and often engage in public protests when these interests are challenged. As a result, the limited progress achieved in public participation has been dominated by this rising class of property owners, who are sensitive to anything likely to diminish the value of their property, whether it be the rezoning of public land or open space as residential land or just the simple addition of more housing to their neighborhood. Accordingly, housing development in China’s megacities has become even more difficult to achieve than before, and urban planning decisions are increasingly facing challenges.[223]

For example, within the past decade the central government has developed a major plan for the construction of affordable housing and ordered city governments to build a certain amount of such housing in their jurisdictions. To avoid concentrating the poor in particular neighborhoods and districts, the Ministry of Construction has further promoted a mixture of affordable housing with regular commercial residential housing. However, these efforts have been met with a number of challenges from existing property owners. For instance, a 2008 affordable housing proposal in the Xu Jiahui district of Shanghai was originally planned for a central area, to promote the integration of people from different social and economic backgrounds and to avoid the segregation of rich and poor. The proposal passed with little difficulty (probably due in part to limited public participation), but once the project got underway, more than 6,000 households in the neighboring residential district rose up in protest.[224] These property owners first argued that the project would occupy land that had originally been planned for a healthcare facility, senior center, and kindergarten. In response, the government explained that those public facilities would be included in the affordable housing project and open to all of those living nearby. The property owners then claimed that the project might influence the natural light and air quality in the neighborhood. What was their real concern? As one resident explained in the aftermath, “We were concerned that low prices and [a] low-income population would pull down housing prices [in] the three [surrounding] neighborhoods.”[225] The pressure that property owners exerted through institutional channels, such as the local People’s Political Consultative Conference, resulted in the Shanghai city government relocating the project to a more remote area.[226]

This case illustrates the national debate over the concept of mixed living for the rich and poor (pinfu hunju). The Ministry of Housing and Urban-Rural Development promotes such mixed living, requiring real estate developers to incorporate a certain percentage of affordable housing into their projects to avoid concentrations of the poor in particular regions. However, both real estate developers and high-income residents have expressed opposition to this policy. As one such resident from Lanzhou in Gansu province explained, “I paid a large amount of money for housing exactly for its environment and surroundings; it’s good for us and for our children’s education.”[227] Property owners’ concerns over property values, which are inseparable from existing neighborhood characteristics, have contributed to the rise of the NIMBY movement in China. It has become increasingly common for middle-class property owners to challenge urban planning decisions, sometimes through public protests. NIMBY movements across the country have forced local governments to take existing property owners’ interests more seriously, though the political and social impact of such movements on Chinese urban governance is yet to be fully examined.[228] To date, the movement has attracted public attention primarily with respect to environmental issues, as in the case of opposition to the construction of nearby chemical factories or garbage-disposal sites.[229]

Community opposition thus far has been separate from public participation. Unlike their American counterparts, local communities in China have little institutional power in the urban planning process. Under Chinese law, public participation is incapable of accommodating and dealing with community opposition, which is why such opposition is mainly presented politically, in the form of public protest. However, such protests have proved a powerful weapon in slowing down government-planned development projects, owing to the government’s concern with social stability.[230] Overall, the NIMBY movement in China has not made cities more inclusive, but rather has strengthened the government’s already existing inclination to exclude newcomers who would impose a burden on public services or create a nuisance for neighboring property owners.

The voices of newcomers and citizens without property are completely absent from the urban planning process. For example, bargaining in urban renewal, which has become an increasingly important means of city development, occurs primarily between growth machine elites—government officials, real estate developers, and property owners—with the interests of the majority of residents in blighted neighborhoods—namely, renters—receiving little, if any, consideration. In Shenzhen, eight million residents of intra–city villages (villages within the city) are migrants, and most of their landlords do not live in those villages.[231] When intra-city villages are targeted for redevelopment, their migrant worker residents (generally taxi drivers, factory workers, cleaning staff, security guards, and the like) are forced to move to another village.[232] If the Shenzhen government succeeds in redeveloping all such villages, migrant workers will have nowhere to live.

To summarize, urban governance in China is dominated by growth elites, including government officials who pursue industrial-driven economic growth, financial investors, and real estate developers. The decision-making mechanism is administratively driven and allows little democratic deliberation or public input. The resulting growth machine has little sympathy for the young and the poor. Combined with the conventional hukou regime, land use regulations have become an increasingly important weapon for Chinese cities to exclude the unwanted. The rise of homeownership in China was supposed to balance the power of local governments, but only to the limited extent of protecting existing property owners’ interests. For the non-property owners in Chinese cities, Chinese NIMBYism operates similarly to its U.S. counterpart, serving to limit the housing supply and shore up housing prices by slowing down or pushing out development.

IV. Housing, the New Exclusion, and the Way Out

Our research reveals that two very different systems—with very different legal frameworks, governmental structures, and goals—can each produce exclusionary housing policies that limit the construction of affordable housing where it is needed. The role of property owners in preventing development has widespread implications for society that go far beyond the issues of exclusion and inconvenience for developers. In recent years, a growing number of economists have begun to focus on the rapidly escalating cost of housing in many American cities—particularly coastal cities, where housing prices have risen dramatically—forcing many people to relocate. Jason Furman, Chairman of the Council of Economic Advisors under President Obama, has written:

[S]ome land use regulations can be beneficial to communities and the overall economy. There can be compelling environmental reasons in some localities to limit high-density or multi-use development. . . . But in other cases, zoning regulations and other local barriers to housing development allow a small number of individuals to capture the economic benefits of living in a community, thus limiting diversity and mobility. The artificial upward pressure that zoning places on house prices—primarily by functioning as a supply constraint—also may undermine the market forces that would otherwise determine how much housing to build, where to build, and what type to build, leading to a mismatch between the types of housing that households want, what they can afford, and what is available to buy or rent.[233]

Furman’s analysis relies on the work of Edward Glaeser, Joseph Gyorko, and Raven Saks, who concluded that zoning regulations in New York City increase the cost of housing there by 50 percent.[234] And high housing costs, as Peter Ganong and Daniel Shoag have argued, are largely responsible for hindering the migration of Americans from lower-wage to higher-wage regions.[235]

In both the U.S. and China, the impact of overly restrictive development approaches has contributed to gentrification, as consumers seek housing in previously undesirable neighborhoods, with developers following close behind. As John Mangin has argued, zoning restrictions that prevent development in high-income areas push home–seekers to expand their targets to adjacent neighborhoods.[236] The result is a rise in housing costs there, which attracts developers—and a backlash from long-term residents concerned about being priced out of the area. However, efforts to stop development do little to prevent increases in housing costs, which are the result of demand rather than construction.[237]

In the remainder of this Article, we first discuss some of the commonalities and differences between the U.S. and China with regard to land use regulation in fast-growing cities. We then discuss several proposals made by other academics for dealing with exclusion in the context of urban development, and argue for replacing property-based urban governance with citizenship-based urban governance.

A. U.S. and Chinese Land Use Regulation: Convergence Toward Exclusion?

As this Article reveals, the political systems in both the U.S. and China have imposed limits on high-density development. To an American visiting China, the claim that the country’s cities are “anti-density” may seem odd. After all, Chinese cities have many more high-rise apartments than American cities. And unlike in the U.S., it is true that the predominant living style in Chinese urban culture is apartment-dwelling, often in large buildings. However, as we have demonstrated herein, Chinese local governments often thwart the even–higher-density developments for which there is considerable demand. The fact that land sales account for a significant portion of local government budgets pushes those governments to transform additional rural land into developable residential areas instead of focusing their efforts on increasing the development of already-built-up areas, leading to the rapid sprawl seen in many cities. In the U.S., opposition to density is the fundamental position of most homeowners, as we have seen in the New York City cases. Historically, such opposition—a cause of deconcentration, or sprawl—has been less important than suburban opposition to development. However, should urban homeowner opposition continue apace, we can expect increased demand for new developments in exurban areas.

High on the list of reasons for opposing density in both the U.S. and China is concern for the additional infrastructure costs that density imposes. Concerns over overcrowding in schools, parks, and other public facilities, as well as over the potentially high costs of improving and expanding infrastructure, generate public opposition and government obstruction to new development in both countries. In addition, explicit and implicit fears over income mixing have also shaped opposition to higher-density housing. In the U.S., “snob zoning” is an old phenomenon. In fact, land use regulation in the West—from Euclid onwards—has been based in large part on the principle of separation of income levels. In China, this is a rather new phenomenon, but, as we have seen, exclusionary communities are becoming prevalent in the country’s largest cities.

Housing markets in China and the U.S., albeit different in many ways, are exhibiting signs of convergence. This Article has focused on the housing debate in both countries’ fast-growing cities, but such “weak market” cities as Ordos and Qinzhou in China [238] and Detroit and St. Louis in the U.S. feature a glut of affordable housing. In the U.S., that glut is the result of demographic changes in these and similar cities. People have moved in search of better economic opportunities, leaving their housing behind. In China, such oversupply is the result of poorly planned construction projects that were not based on market demand.

Despite dramatically different fundamental frameworks, the U.S. and China are also converging toward the same exclusionary results. In China, control of land use decisions remains concentrated in local government hands. Although real estate developers have some influence, government leaders make the decisions about what gets built and where. In the U.S., government regulators, private property owners, and developers vie for power in both short-term disputes over individual projects and long-term debates over the appropriate level of construction. Although governments in the U.S. have the power to reject proposals, and therefore shape development, they do not generally plan and/or initiate housing developments. However, even with concentrated power in China and dispersed power in the U.S., the end result in the megacities of both is a decision to limit growth.

Additionally, in the U.S., public participation is a fundamental aspect of the development process. New York City is a typical example. Its property owners and their representative organizations wield significant power in shaping both the general zoning map and decision-making about individual development projects. In China, public participation is limited, and has historically been directed toward input on general plans. However, the situation is changing, with public opposition to development seemingly on the rise.

Finally, the types of markets and goals of government decision-makers certainly differ in the two countries. In China, industrial development often takes priority over residential development. In the U.S., opposition to residential development is strong among residents and government officials because of concerns over the costs of increased density. Industrial development is less of a priority in American cities, which are generally older, with existing (and underutilized) industrial areas already in place. However, in both countries the fundamental structure of the property system is based almost exclusively on the interests of current property owners. In China, much of the land remains owned by the government. The transfer of land to private parties has brought about new development, but not enough to meet demand. In the U.S., private land ownership is the norm, but private property owners’ incentives to limit competition for resources and to maintain property values point toward exclusion. Our research leads us to conclude that more equitable land use regulatory regimes require the conscious inclusion of non-property owners in the planning and development process. Neither a public nor a private system that places power solely in the hands of property owners will ever produce the necessary amount of housing.

B. Toward a New, Inclusionary Regulatory System

The value of cities, according to agglomeration economics, is that they are able to share information, talent, public transportation, education, healthcare systems, and other public goods. Sharing and more inclusive cities are more efficient than exclusionary cities, as they ensure that developments benefit from the greater availability of human capital, governments benefit from more taxes, and citizens (both old and new) benefit from more information, communication, services, and opportunities. That is how cities have grown over time and why we consider them the greatest invention of civilization.[239] Recognizing the importance of cities to human development, people also share a vision of “cities for all,” to be achieved, as the U.N. General Assembly resolved, “by leveraging the agglomeration benefits of well-planned urbanization, high productivity, competitiveness and innovation, by promoting full and productive employment and decent work for all, [and] by ensuring the creation of decent jobs and equal access for all to economic and productive resources and opportunities.”[240] Fundamental to the core of inclusive cities, of course, is “a variety of adequate housing options.”[241]

However, as exemplified by the comparative study reported herein, vested interests in both American and Chinese megacities have accelerated their exclusionary tendencies. To address the failure of the political markets regarding land use regulations in megacities, we can either abolish zoning altogether [242] or empower non-property owners in the decision-making process of zoning. Abolishment of zoning would theoretically enable landowners to “develop their property in the manner they desire[].”[243] But the question is whether landowners desire the same amount of housing as do potential consumers—in particular the middle– and lower-end consumers. As discussed previously, this is not necessarily the case. Moreover, the expansion of government in Chinese and American metropolitan areas has rendered this solution very difficult, if not entirely infeasible. The other approach—empowering those whose interests are not protected by the current system—is thus more practical. Land use regulations have become more necessary than they were a century ago because of interconnectedness and the agglomeration of economic and social activities in cities. However, that does not preclude the possibility of redefining the boundaries of the political market of urban governance. A more balanced approach may be to facilitate equal access and participation in the political market by creating neighborhood plans that set general parameters for development while leaving individual development decisions to individual property owners, supplemented by private remedies. The essential component of this approach is to clearly define the boundaries of the political market and the entitlements of its participants.

Urban governance regimes are shaped by city politics, increasingly dominated by private owners in the U.S. and by public ones in China. There are few meaningful mechanisms to welcome newcomers, traditionally the primary source of cities’ greatness. These problems cannot be resolved solely by technical revisions of democratic procedures; they can be resolved only by changing the composition of political representation. Newcomers to cities must be afforded more power to shape land use regulations. Changing the number and composition of participants could well reshape the urban governance landscape. Empowering absent stakeholders is of more fundamental importance than effecting technical amendments to land use procedures and regulations. Zoning budgets and city-level discussions can improve the situation by limiting the influence of local community opposition, but they will not shift the city dynamics from pro status quo to pro housing development.

In his celebrated article, Suburban Growth Controls, Ellickson addresses how to protect housing consumers against monopoly pricing.[244] His proposal is to grant housing consumers legal rights: more specifically, an entitlement to initiate antitrust class actions, using the threat of damages to deter housing owners from exercising monopoly control over zoning.[245] In the spirit of incorporating housing consumers into the bargaining process, we propose to restructure the political market for urban governance to bring housing consumers into the political market, and to entitle them to participate in zoning decisions. Doing so would mean changing the current tripartite urban planning framework to a four-party framework.

In future work, we plan to develop a way to incorporate non-property owners into the political system.[246] However, we suggest several first steps. In essence, urban governance regimes must give non-property owners and their representatives, as well as NGOs that build and advocate for affordable housing, a substantive voice and power in the process of deciding overall land uses and urban development densities. For example, governments in both China and the U.S. could consider establishing community involvement commissions at the city level to formally represent low-income populations, homeless residents, and renters in the urban planning process.[247]

Empirical studies have revealed that exit cannot replace voice in shaping policy change.[248] Meltzer and Schuetz’s analysis of policy changes in 100 Bay Area cities and towns between 1998 and 2003 reveals that “political factors, such as partisan affiliation and the strength of affordable housing nonprofits, are more robust predictors [than economic and spatial factors] of whether or not a local government adopts inclusionary zoning.”[249] In other policy areas, such as environmental protection, we also see the importance of political participation. Portney and Berry’s survey of city councilors and administrators in fifty large American cities shows that “contact with different group sectors and degree of inclusiveness of those sectors in policymaking is linked to policymakers’ support for environmental protection and for sustainability.”[250] Successful urban policy changes are shaped much more by advocacy and participation than by choosing to leave. Therefore, the next step is to figure out a plan for giving housing consumers equal access to decision-making in land use control and urban governance.

[*] *. Provost and Presidential Professor of Law and Education, The University of Pennsylvania.

[†] †. Assistant Professor, The University of Hong Kong Faculty of Law; Global Associate Professor of Law, NYU School of Law (Fall 2017). The authors thank Nestor Davidson, Robert Ellickson, Weici Ling, and Gideon Parchomovsky for reading an early draft of this paper and for their extremely helpful comments and discussions. They are also grateful for comments and questions from participants of the NYU Furman Center and Marron Institute Fall 2017 Urban Research Seminar, in particular Vicki Been, Ingrid Ellen, Donald Davis, Clayton Gillette, Christopher Sprigman, and Wei You; the Third Annual International and Comparative Urban Law Conference, in particular Daniel B. Rodriguez; the 2016 PKU-HKU Annual Law Conference, in particular Guanghua Yu and Feng Deng; the Shanghai Jiaotong Law School Urban Law Workshop, in particular Mang Zhu; and the Law, Regulation, and Governance Workshop at Renmin University, in particular Xiaodong Ding, Hao Ran, Lei Tian, Yang Wang, and Bingwan Xiong. All errors are our own.

[1]. Abigail Savitch-Lew, How Are NYC’s Community Boards Reacting to de Blasio’s Housing Proposals?, City Limits (Nov. 2, 2015), http://citylimits.org/2015/11/02/how-are-nycs-community-boards-reacting-to-de-blasios-housing-proposals.

[2]. “以用地供给强化人口调控目标，以产业结构调整优化人口结构，以适宜的人口密度调节人口分布” [“To strengthen the population control targets through land supply; to optimize the population structure through readjustment of the industrial structure; to regulate the population distribution through appropriate population density.”]. See Leading Group Office of Shanghai Master Plan, 上海市城市总体规划 (2015–2040）纲要概要 [Outline of Shanghai Urban Master Plan (2015–2040)] 11 (2015), http://img.thupdi.com/news/2016/01/1453791519864576.pdf.

[3]. “Megacity” is a term widely used and accepted but rarely precisely defined. In this Article, we use the term to refer to first-tier cities in China, represented by Beijing, Shanghai, and Shenzhen, and the biggest cities in the U.S., represented by New York City and San Francisco.

[4]. See, e.g., Edward Glaeser, Triumph of the City (2011).

[5]. See, e.g., Joel Kotkin, The Cities Americans Are Thronging to and Fleeing, Forbes (Oct. 6, 2015, 8:30 AM), https://www.forbes.com/sites/joelkotkin/2015/10/06/the-cities-americans-are-thronging-to-and-fleeing.

[6]. Bay Area Council Econ. Inst., Solving the Housing Affordability Crisis: How Policies Change the Number of San Francisco Households Burdened by Housing Costs 5 (2016), http://www.bayareaeconomy.org/files/pdf/BACEI_Housing_10_2016.pdf [hereinafter Housing Affordability].

[7]. See, e.g., 何苗 [He Miao], 外来常住人口首现15万净流出：谁离开了上海？[150,000 Net Outflow of Migrant Permanent Resident Population: Who Leaves Shanghai?], 21 Jingji (Mar. 2, 2016), http://epaper.21jingji.com/html/2016-03/02/content_33343.htm; 北京楼市，真的遭遇大利空了吗？[Is the Real Estate Market in Beijing Running out of Interests?], iFeng News (Feb. 28, 2017, 6:17 PM), http://wemedia.ifeng.com/9158923/wemedia.shtml; 李迅雷 [Lee Thunder], 人口流向出现逆转，它将对中国经济产生怎样的影响？[How Will the Phenomenon of Reverse Population Flow Affect the Economy in China?], Sohu (Apr. 25, 2017, 6:30 PM), http://www.sohu.com/a/136422828_481642.

[8]. See generally Vicki Been et al., Urban Land-Use Regulation: Are Homevoters Overtaking the Growth Machine?, 11 J. Empirical Legal Stud. 227 (2014); Roderick M. Hills, Jr. & David Schleicher, Balancing the “Zoning Budget,” 62 Case W. Res. L. Rev. 81 (2011) [hereinafter Hills & Schleicher, Balancing]; Roderick M. Hills, Jr. & David Schleicher, Planning an Affordable City, 101 Iowa L. Rev. 91 (2015) [hereainafter Hills & Schleicher, Planning]; John Mangin, The New Exclusionary Zoning, 25 Stan. L. & Pol’y Rev. 91 (2014); David Schleicher, City Unplanning, 122 Yale L.J. 1670 (2013); Urban Land: Space and the City, Economist (Apr. 4, 2015), https://www.economist.com/news/leaders/21647614-poor-land-use-worlds-greatest-cities-carries-huge-cost-space-and-city (“Lifting all the barriers to urban growth in America could raise the country’s GDP by between 6.5% and 13.5%, or by about $1 trillion–2 trillion.”); Jason Furman, Chairman, Council of Econ. Advisers, Barriers to Shared Growth: The Case of Land Use Regulation and Economic Rents, Remarks at the Urban Institute (Nov. 20, 2015), https://obamawhitehouse.archives.gov/sites/default/
files/page/files/20151120_barriers_shared_growth_land_use_regulation_and_economic_rents.pdf.

[9]. Edward L. Glaeser, Houston, New York Has a Problem, City J., https://www.city-journal.org/html/houston-new-york-has-problem-13102.html (Summer 2008). See Been et al., supra note 8; Hills & Schleicher, Balancing, supra note 8; Schleicher, supra note 8. On the other hand, scholars are also concerned about local governments being captured by mobile capital. See generally Richard C. Schragger, Mobile Capital, Local Economic Regulation, and the Democratic City, 123 Harv. L. Rev. 482 (2009).

[10]. See generally Harvey Molotch, The City as a Growth Machine: Toward a Political Economy of Place, 82 Am. J. Soc. 309 (1976).

[11]. See, e.g., William A. Fischel, The Rise of Homevoters: How OPEC and Earth Day Created Growth-Control Zoning that Derailed the Growth Machine, in Evidence and Innovation in Housing Law and Policy 13 (Lee Anne Fennell & Benjamin J. Keys eds., 2017); Been et al., supra note 8; Schleicher, supra note 8.

[12]. See generally Xiaoyi Sun & Ronggui Huang, Extension of State-Led Growth Coalition and Grassroots Management: A Case Study of Shanghai, 52 Urb. Aff. Rev. 917 (2016); Lei Wang, Forging Growth by Governing the Market in Reform-Era Urban China, 41 Cities 187 (2014); Lin Ye, State-Led Metropolitan Governance in China: Making Integrated City Regions, 41 Cities 200 (2014); Sumei Zhang, Land-Centered Urban Politics in Transitional China—Can They Be Explained by Growth Machine Theory?, 41 Cities 179 (2014).

[13]. For a discussion of the term “homevoter,” see infra text accompanying note 47.

[14]. Furman, supra note 8.

[15]. Mangin, supra note 8.

[16]. Schleicher, supra note 8 at 1706–07.

[17]. See infra Part III.

[18]. Id.

[19]. See, e.g., Ye, supra note 12 at 189–90. See generally 罗鹏飞 [Luo Pengfei], 关于城市规划公众参与的反思及机制构建 [Reflections on the Public Participation in Urban Planning and Its Mechanism Construction], 6 城市问题 [Urb. Problems] 32 (2012).

[20]. A defining characteristic of the Chinese housing market is the undersupply of housing in megacities and oversupply of housing in smaller cities. See generally Jing Wu et al., Evaluating the Risk of Chinese Housing Markets: What We Know and What We Need to Know, 39 China Econ. Rev. 91 (2016). Looking at the bigger picture of nationwide housing demand and supply, both China and the U.S. share a mismatch between housing supply and job opportunities. “[L]ocal governments with the weakest economies have been the most aggressive in promoting new housing supply, perhaps as a means of generating economic growth, while local governments in the richest cities have been slowing down construction.” Edward Glaeser et al., A Real Estate Boom with Chinese Characteristics, 31 J. Econ. Persp. 93, 98 (2017). See also Hanming Fang et al., Demystifying the Chinese Housing Boom, 30 NBER Macroeconomics Ann. 2015 105, 152–53 (“There is still a lack of systematic understanding of housing supply in Chinese cities. To the extent that housing prices have been rising at a pace comparable to or even higher than the households’ income growth rate during the decade, the housing market equilibrium implies that the growth of housing supply was likely to have stayed either below or comparable to the growth of housing demand . . . .”); Roderick M. Hills, Jr. & Shitong Qiao, Voice and Exit as Accountability Mechanisms: Can Foot-Voting Be Made Safe for the Chinese Communist Party?, 48 Colum. Hum. Rts. L. Rev. 158, 168–69 (2017); Mali Chivakul et al., Understanding Residential Real Estate in China 18 (Int’l Monetary Fund, Working Paper No. 15/84, 2015) (“For China, Tier I cities are close to the average levels in advanced economies, while smaller cities already see a much higher level, suggesting possible signs of oversupply.”).

[21]. Wu et al., supra note 20, at 5–6.

[22]. See id. at 60 (“Market-level analysis of short- and longer-run changes in supply-demand balances finds important variation across markets. In the major East region markets of Beijing, Hangzhou, Shanghai and Shenzhen which have experienced very high rates of real price growth, we estimate that the growth in households demanding housing units has outpaced new construction since the turn of the century. However, there are a dozen large markets, primarily in the interior of the country, in which new housing production has outpaced household growth by at least 30% and another eight in which it did so by at least 10%.”). Id. at 2.

[23]. Our Current Affordable Housing Crisis, N.Y.C. Housing, http://www1.nyc.gov/site/
housing/problem/problem.page (last visited July 4, 2017).

[24]. Housing Affordability, supra note 6, at 4.

[25]. Furman, supra note 8, at 5–6. As discussed in Part IC, the richest cities are often megacities which occupy unique and monopoly positions on the market of places, and, therefore, tend to undersupply housing to grab monopoly rents.

[26]. See, e.g., Richard R.W. Brooks & Carol M. Rose, Saving the Neighborhood: Racially Restrictive Covenants, Law, and Social Norms (2013).

[27]. See generally Fei-Ling Wang, Organizing Through Division and Exclusion: China’s Hukou System (2005).

[28]. See, e.g., Douglas S. Massey et al., Climbing Mount Laurel: The Struggle for Affordable Housing and Social Mobility in an American Suburb 21–23 (2013). See also S. Burlington Cty. NAACP v. Twp. of Mount Laurel, 456 A.2d 390 (N.J. 1983); S. Burlington Cty. NAACP v. Twp. of Mount Laurel, 336 A.2d 713 (N.J. 1975).

[29]. Mangin, supra note 8, at 92.

[30]. This paper does not address the relationship between city governments and upper-level governments, which can impact housing supply too. See generally David J. Barron, Reclaiming Home Rule, 116 Harv. L. Rev. 2255 (2003).

[31]. Schragger, supra note 9, at 485.

[32]. Bruce W. Hamilton, Zoning and the Exercise of Monopoly Power, 5 J. Urb. Econ. 116, 116 (1978). See also William A. Fischel, Zoning and the Exercise of Monopoly Power: A Reevaluation, 8 J. Urb. Econ. 283 (1980); James A. Thorson, An Examination of the Monopoly Zoning Hypothesis, 72 Land Econ. 43 (1996).

[33]. Stuart Banner, American Property: A History of How, Why, and What We Own 5 (2011).

[34]. Id.

[35]. See Vill. of Euclid v. Ambler Realty Co., 272 U.S. 365, 394–95 (1926).

[36]. See, e.g., Richard A. Epstein, A Conceptual Approach to Zoning: What’s Wrong with Euclid, 5 N.Y.U. Envtl. L.J. 277, 286–87 (1996).

[37]. Robert C. Ellickson, Suburban Growth Controls: An Economic and Legal Analysis, 86 Yale L.J. 385, 400 (1977).

[38]. Id.

[39]. Shitong Qiao, The Politics of Chinese Land: Partial Reform, Vested Interests, and Small Property, 29 Colum. J. Asian L. 70, 75 (2015).

[40]. Id. at 82

[41]. Id. at 78 (“It was clear from the RRLSC that all land use must be consistent with the State’s economic plan.”). The Chinese system is in many ways similar to that of cities in early United States. See generally Hendrik Hartog, Public Property and Private Power: The Corporation of the City of New York in American Law, 1730–1870 (G. Edward White ed., 1983).

[42]. See中华人民共和国城市规划法 [City Planning Law of the People’s Republic of China] (promulgated by the Standing Comm. Nat’l People’s Cong., Dec. 26, 1989, effective Apr. 1, 1990, invalidated by the Urban and Rural Planning Law, Oct. 28, 2007), art. 31, translated in 1987–1989 P.R.C. Laws 349 (describing the application process for a construction project in a planned urban area).

[43]. Shitong Qiao, The Evolution of Chinese Land Law: Stick by Stick?, in Private Law in China and Taiwan: Legal and Economic Analyses 182, 191–95 (Yun-Chien Chang, Wei Shen & Wen-Yeu Wang eds., 2017).

[44]. See Hamilton, supra note 32, at 116.

[45]. Molotch, supra note 10, at 309.

[46]. Id. at 309–10.

[47]. Fischel, supra note 11, at 1.

[48]. Been et al., supra note 8, at 229; Schleicher, supra note 8, at 1682–83.

[49]. Robert Ellickson & Vicki Been, Land Use Controls: Cases and Materials 73 (3d ed. 2005).

[50]. Id.

[51]. Id.

[52]. See generally id.

[53]. See, e.g., Been et al., supra note 8, at 228; Schleicher, supra note 8, at 1676–77.

[54]. See, e.g., Thomas Johnson, Environmentalism and NIMBYism in China: Promoting a Rules-Based Approach to Public Participation, 19 Envtl. Pol. 430, 430–31 (2010); Yi Sun, Facilitating Generation of Local Knowledge Using a Collaborative Initiator: A NIMBY Case in Guangzhou, China, 46 Habitat Int’l. 130, 131–32 (2015).

[55]. Fischel, supra note 11, at 4–8.

[56]. Id. at 4–6.

[57]. Douglass C. North, A Transaction Cost Theory of Politics, 2 J. Theoretical Pol. 355, 356–57 (1990).

[58]. Id. at 357–58 (quoting Anne O. Krueger, The Political Economy of Controls: American Sugar 38 (Nat’l Bureau of Econ. Research, Working Paper No. 2504, 1988).

[59]. Hills & Schleicher, Planning, supra note 8, at 95. See also Hills & Schleicher, Balancing, supra note 8, at 89–90.

[60]. Hills & Schleicher, Balancing, supra note 8, at 102 (“[N]o legislator will vote to allow a new development in her district unless she can be sure everyone else will reciprocate by taking their fair share of the housing needed to meet demand.”).

[61]. Lee Anne Fennell, Homeownership 2.0, 102 Nw. U. L. Rev. 1047, 1062 (2008).

[62]. Fischel, supra note 11, at 13–14.

[63]. See Fischel, supra note 11, at 4.

[64]. North, supra note 57, at 357–60, 363–64.

[65]. Hills & Schleicher, Planning an Affordable City, supra note 8, at 95.

[66]. See id. at 94–95 (arguing for “centralized” plans).

[67]. See id. at 92.

[68]. See Charles M. Haar, The Master Plan: An Impermanent Constitution, 20 Law & Contemp. Probs. 353, 365–66 (1955). See generally Daniel R. Mandelker, The Comprehensive Planning Requirement in Urban Renewal, 116 U. Pa. L. Rev. 25 (1967); Carol M. Rose, Planning and Dealing: Piecemeal Land Controls as a Problem of Local Legitimacy, 71 Calif. L. Rev. 837 (1983). For a fantastic literature review of this debate, see generally Hills & Schleicher, Planning, supra note 8.

[69]. See Hills & Schleicher, Planning, supra note 8, at 102–04.

[70]. See generally Wing-Shing Tang, Chinese Urban Planning at Fifty: An Assessment of the Planning Theory Literature, 14 J. Plan. Literature 347 (2000).

[71]. See, e.g., North, supra note 57, at 357.

[72]. Fischel, supra note 11, at 13.

[73]. Ellickson, supra note 37, at 402.

[74]. Cf. id. at 402, 436–38; Andrew H. Whittemore, Zoning Los Angeles: A Brief History of Four Regimes, 27 Plan. Persp. 393, 393–94 (2012).

[75]. See, e.g., Richard A. Epstein, Exit Rights Under Federalism, 55 Law & Contemp. Probs. 147, 155–58 (1992).

[76]. See Ellickson & Been, supra note 49, at 671–74.

[77]. Id.

[78]. See generally Jon C. Teaford, The Municipal Revolution in America: Origins of Modern Urban Government 1650–1825 (1975).

[79]. William A. Fischel, The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies 8, 16, 75–76 (2001).

[80]. See Qiao, supra note 39, at 85–88, 96–98.

[81]. See supra Section I.A.

[82]. Ellickson, supra note 37, at 401 (“Residents may genuinely prefer that their municipality remain the way it is rather than grow rapidly.”).

[83]. Id. at 430.

[84]. See, e.g., Glaeser, supra note 9 (“To East Coast urbanites, Houston’s appeal must be mysterious: the city isn’t all that economically productive—earnings per employee in Manhattan are almost double those in Houston.”); Kotkin, supra note 5 (“The nation’s three largest metropolitan areas fall to the bottom of our list: Los Angeles (46th), Chicago (52nd) and, in last place New York. Since 2010, the New York metro area has lost a net 529,000 domestic migrants, adding to the 1.9 million who departed from 2000 to 2009.”). Cf. id. (“[S]everal Texas cities . . . have logged strong job growth . . . .”).

[85]. See, e.g., Sue Feng, China’s Graduates: An Ant’s Life, Wall St. J.: China Real Time Rep. (Nov. 5, 2009, 4:42 AM), https://blogs.wsj.com/chinarealtime/2009/11/05/chinas-graduates-an-ants-life; Kevin Tang, China’s “Ant Tribe” Lives in the World’s Most Cramped Apartments, BuzzFeed (Nov. 27, 2013, 7:12 AM), https://www.buzzfeed.com/kevintang/chinas-ant-tribe-lives-in-the-worlds-most-cramped-apartments.

[86]. See, e.g., Vicki Been, “Exit” as a Constraint on Land Use Exactions: Rethinking the Unconstitutional Conditions Doctrine, 91 Colum. L. Rev. 473, 511–16 (1991); Christopher Serkin, Local Property Law: Adjusting the Scale of Property Protection, 107 Colum. L. Rev. 883, 888–89 (2007).

[87]. Daniel Hertz, What Filtering Can and Can’t Do, City Observatory: City Comment. (Oct. 11, 2015), http://cityobservatory.org/what-filtering-can-and-cant-do. See also Stuart S. Rosenthal, Are Private Markets and Filtering a Viable Source of Low-Income Housing? Estimates from a “Repeat Income” Model, 104 Am. Econ. Rev. 687, 687 (2014) (“[P]rivate markets are thought to provide low-income housing primarily through a dynamic process in which homes built for higher income families slowly deteriorate and filter down to lower income households.”).

[88]. Rosenthal, supra note 87, at 704.

[89]. See id. at 688–89.

[90]. See Fischel, supra note 79, at 215 (“After zoning was established, however, the suburbs did not have to bow to the inevitability of convergence with their neighbors. They could control their own destiny.”); Fischel, supra note 11, at 4–6; Been et al, supra note 8, at 231.

[91]. See, e.g., Joseph P. Schwieterman & Dana M. Caspall, The Politics of Place: A History of Zoning in Chicago (Jane Heron ed., 2006); William A. Fischel, An Economic History of Zoning and a Cure for Its Exclusionary Effects, 41 Urb. Stud. 317 (2004) (explaining how zoning transformed from a means to mediate disputes to a means of exclusion).

[92]. See, e.g., Vill. of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926); S. Burlington Cty. NAACP v. Twp. of Mount Laurel, 456 A.2d 390 (N.J. 1983); S. Burlington Cty. NAACP v. Twp. of Mount Laurel, 336 A.2d 713 (N.J. 1975).

[93]. Robert C. Ellickson, Alternatives to Zoning: Covenants, Nuisance Rules, and Fines as Land Use Controls, 40 U. Chi. L. Rev. 681, 721–22 (1973).

[94]. Ellickson & Been, supra note 49, at 74–76 (discussing the evolution of zoning laws).

[95]. Ellickson, supra note 93, at 721–22.

[96]. See id.

[97]. See, e.g., Robert G. Bone, Normative Theory and Legal Doctrine in American Nuisance Law: 1850 to 1920, 59 S. Cal. L. Rev. 1101, 1105–08 (1986); Joel Franklin Brenner, Nuisance Law and the Industrial Revolution, 3 J. Legal Stud. 403, 408–11 (1974).

[98]. See Schwieterman & Caspall, supra note 91, at 13 (“Frontage-consent ordinances . . . were based on nuisance doctrines and required that the majority of residential owners on a block provide consent before certain land uses would be permitted.”).

[99]. See id.

[100]. See Ellickson & Been, supra note 49, at 73–98 (discussing the evolution of zoning through the Euclid decision).

[101]. See, e.g., Brenner, supra note 97, at 408.

[102]. Allison Dunham, A Legal and Economic Basis for City Planning (Making Room for Robert Moses, William Zeckendorf, and a City Planner in the Same Community), 58 Colum. L. Rev. 650, 652–53 (1958).

[103]. See id. at 654, 656–58. See also A Standard City Planning Enabling Act §§ 8, 15 (Dept. of Commerce 1928); A Standard State Zoning Enabling Act §§ 4, 7 (Dept. of Commerce 1926).

[104]. See Dunham, supra note 102, at 654, 656–57.

[105]. Phillip P. Green Jr., The Power of the Zoning Board of Adjustment to Grant Variances from the Zoning Ordinance, 29 N.C. L. Rev. 245, 245 (1951).

[106]. Id. at 245–46. See also Jesse Dukeminier, Jr. & Clyde L. Stapleton, The Zoning Board of Adjustment: A Case Study in Misrule, 50 Ky. L.J. 273, 273 (1962).

[107]. See Green, supra note 105, at 245–48.

[108]. See, e.g., Paul Davidoff, Advocacy and Pluralism in Planning, 31 J. Am. Inst. Planners 331, 335 (1965).

[109]. A Standard State Zoning Enabling Act §§ 7, 11 (Dept. of Commerce 1926).

[110]. See, e.g., Ronald M. Shapiro, The Zoning Variance Power—Constructive in Theory, Destructive in Practice, 29 Md. L. Rev. 3, 18–22 (1969).

[111]. See id.

[112]. See David W. Owens, The Zoning Variance: Reappraisal and Recommendations for Reform of a Much-Maligned Tool, 29 Colum. J. Envtl. L. 279, 295–98 (2004); Carol M. Rose, New Models for Local Land Use Decisions, 79 Nw. U. L. Rev. 1155, 1155–57 (1984).

[113]. See Molotch, supra note 10, at 321.

[114]. See Kenneth T. Jackson, Crabgrass Frontier: The Suburbanization of the United States 232–34 (1987).

[115]. See, e.g., Wendell E. Pritchett, The “Public Menace” of Blight: Urban Renewal and the Private Uses of Eminent Domain, 21 Yale L. & Pol’y Rev. 1, 21 (2003).

[116]. Id.

[117]. See Robert A. Caro, The Power Broker: Robert Moses and the Fall of New York 19 (1974).

[118]. See Fischel, supra note 11, at 19–21, 26–27.

[119]. See id. at 13, 21–25.

[120]. See id. at 18–19.

[121]. See id. at 17, 26. Cf. Mangin, supra note 8, at 101.

[122]. See Fischel, supra note 11, at 13; Mangin, supra note 8, at 108–10.

[123]. See, e.g., Mangin, supra note 8, at 99–100 (describing the ease with which San Francisco can “zone[] up”).

[124]. Id. at 99.

[125]. Harold A. Ellis, Neighborhood Opposition and the Permissible Purposes of Zoning, 7 J. Land Use & Envtl. L. 275, 285–86 (1992). See also Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 255, 263 (1977) (holding that plaintiffs had failed to prove that the zoning laws had a racially discriminatory purpose, though this may have been their effect).

[126]. See generally S. Burlington Cty. NAACP v. Twp. of Mount Laurel, 336 A.2d 713 (N.J. 1975).

[127]. See Roderick M. Hills Jr., Saving Mount Laurel, 40 Fordham Urb. L.J. 1611, 1612–14 (2013).

[128]. See Massey et al., supra note 28, at 18–19.

[129]. See Ellis, supra note 125, at 284, 297–98. See also generally Edward G. Goetz & Barbara Lukermann, The Minnesota Land Use Planning Act and the Promotion of Low- and Moderate-Income Housing in Suburbia, 22 Law & Ineq. 31 (2004).

[130]. Michael Lewyn, Against the Neighborhood Veto, 44 Real Est. L.J. 82, 82 (2015).

[131]. See, e.g., Richard Plunz, A History of Housing in New York City xli–xliii (2016).

[132]. See Caro, supra note 117.

[133]. See Been et al., supra note 8, at 228–29.

[134]. See Raymond Charles Rauscher & Salim Momtaz, Brooklyn’s Bushwick—Urban Renewal in New York, USA 63–64 (2014); Richard Bass & Cuz Potter, A Tale of Three Northern Manhattan Communities: Case Studies of Political Empowerment in the Planning and Development Process, 31 Fordham Urb. L.J. 285, 287 (2004).

[135]. See Bass & Potter, supra note 134, at 288–89.

[136]. Id. at 289.

[137]. Tom Angotti, Race, Place and Waste: Community Planning in New York City, 1999 New Village J. 5, 5.

[138]. See id. at 5–6; Robert F. Pecorella, Community Governance: A Decade of Experience, 37 Proc. Acad. Pol. Sci. 97, 102–03 (1989).

[139]. See, e.g., Howell S. Baum, Community Organizations Recruiting Community Participation: Predicaments in Planning, 18 J. Planning Educ. & Res. 187, 188 (1999).

[140]. See Angotti, supra note 137, at 5–6; Pecorella, supra note 138, at 100–01 & tbl.3.

[141]. Been et al., supra note 8, at 241.

[142]. Id. at 252.

[143]. Id. at 252–253 (“[D]ownzoned lots were more likely to be located near . . . rail stations than the typical lot located outside a rezoning project study area.”).

[144]. See Rachel Sugar, More than Half of New Yorkers Are Rent Burdened: Study, Curbed (Dec. 15, 2016, 11:04 AM), https://ny.curbed.com/2016/12/15/13967302/new-yorkers-cost-burden-rental-market-apartment-list.

[145]. Amy X. Wang, The Average Manhattan Apartment Now Costs $1 Million, Quartz, (Oct. 1, 2015), https://qz.com/515524/the-average-manhattan-apartment-now-costs-1-million.

[146]. NYU Furman Ctr., State of New York City’s Housing and Neighborhoods in 2015 43 & fig.4 (2016), http://www.nyc.gov/html/mancb3/downloads/resources/NYUFurmanCenter_
SOCin2015_9JUNE2016.pdf.

[147]. Id. at 5. The study defined gentrified neighborhoods as “sub-borough areas (SBAs) . . . that were low-income in 1990 and experienced rent growth above the median SBA rent growth between 1990 and 2010–2014.” Id. at 4.

[148]. See, e.g., Henry Goldman, De Blasio Re-Election Bid Stresses Affordability, Not Inequality, Bloomberg (Mar. 31, 2017, 2:00 AM), https://www.bloomberg.com/news/articles/2017-03-31/de-blasio-re-election-bid-stresses-affordability-not-inequality.

[149]. Bill de Blasio & Alicia Glen, Housing New York: A Five-Borough, Ten-Year Plan 5 (2014), http://www.nyc.gov/html/housing/assets/downloads/pdf/housing_plan.pdf. See also Jennifer Fermino, Mayor de Blasio Unveils $41B Proposal to Develop 200,000 Units of Affordable Housing, N.Y. Daily News (May 5, 2014, 1:36 PM), http://www.nydailynews.com/
news/politics/mayor-unveils-41b-affordable-housing-plan-article-1.1780018.

[150]. De Blasio & Glen, supra note 149. at 9, 32, 71.

[151]. Id. at 10.

[152]. See, e.g., Vivian Yee & Mireya Navarro, Some See Risk in de Blasio’s Bid to Add Housing, N.Y. Times (Feb. 3, 2015), https://nyti.ms/2FD0fKC.

[153]. Id.

[154]. Michael Gartland & Yoav Gonen, Sky-High Opposition: De Blasio Faces Revolt Over Building Plan, N.Y. Post, Nov. 17, 2015, at 10.

[155]. Id.

[156]. Josh Dawsey, New York City Zoning Plan is Under Fire, Wall St. J. (Dec. 4, 2015, 8:20 PM), https://www.wsj.com/articles/new-york-city-zoning-plan-is-under-fire-1449277801.

[157]. Michael M. Grynbaum & Mireya Navarro, Mayor de Blasio Seeks to Rebuild Momentum for Affordable Housing Plan, N.Y. Times (Dec. 10, 2015), https://nyti.ms/2uwXdXH; Ed Garcia Conde, NYC Council Has a Big Opportunity to Do the Right Thing, Welcome 2 Bronx (Feb. 10, 2016), https://www.welcome2thebronx.com/2016/02/10/nyc-council-has-a-big-opportunity-to-do-the-right-thing.

[158]. Savitch-Lew, supra note 1.

[159]. Id.

[160]. Id.

[161]. J. David Goodman & Mireya Navarro, New York City Council Backs Affordable Housing Plan, N.Y. Times (Mar. 14, 2016), https://nyti.ms/2mVgx7W.

[162]. See Erin Durkin, City Council Passes Mayor de Blasio’s Zoning Plan to Transform Brooklyn’s East New York, N.Y. Daily News (Apr. 20, 2016, 10:20 PM), http://www.nydailynews.com/new-york/brooklyn/city-council-passes-plan-transform-brooklyn-zone-article-1.2609215.

[163]. Daniel DeMay, Murray: No Changes to Single-Family Zones, Seattle Post-Intelligencer: Seattle Pol. (July 29, 2015, 3:08 PM), https://blog.seattlepi.com/seattlepolitics/
2015/07/29/mayor-wont-pursue-changes-to-single-family-zones.

[164]. J.K. Dineen, Uphill Battle for Housing Bonus Plan, S.F. Chron. (Feb. 25, 2016), https://www.pressreader.com/usa/san-francisco-chronicle-late-edition/20160225/282226599798937.

[165]. Reid Wilson, Cities Drive the U.S. Economy: Here’s Proof, in One Map, Wash. Post: Govbeat (Mar. 6, 2014), https://wapo.st/1hQ3JZs.

[166]. Id.

[167]. Hills & Qiao, supra note 20, at 177.

[168]. See id. at 191 & n.95.

[169]. Fulong Wu, Planning for Growth: Urban and Regional Planning in China 59 (2015).

[170]. Id.

[171]. 中华人民共和国城乡规划法 [Urban and Rural Planning Law of the People’s Republic of China] (promulgated by the Nat’l People’s Cong., Oct. 28, 2007, effective Jan. 1, 2008), art. 14.

[172]. See, e.g., Kui Xiong, Political Analysis of Power Structures in Urban Planning Process: Based on Shanghai Urban Planning Institutions and Practices in the 1990s, at 81–84 (2005) (unpublished Ph.D. dissertation, Tongji University) (on file with author).

[173]. 中华人民共和国城乡规划法 [Urban and Rural Planning Law of the People’s Republic of China], art. 19.

[174]. See Wu, supra note 169, at 59.

[175]. 上海市城市总体规划（1999年–2020年）[Shanghai City Master Plan (1999–2020)] (Dec. 4, 2003), http://www.shanghai.gov.cn/nw2/nw2314/nw2319/nw10800/nw11407/nw12941/
u26aw1100.html.

[176]. Id.

[177]. See 北京市城市总体规划 (2016年–2035年) [Beijing City Master Plan (2016–2035)], http://zhengwu.beijing.gov.cn/gh/dt/t1494703.htm (Sept. 29, 2017); 深圳总体规划获批 10年后人口低于1100万 [Shenzhen Comprehensive Plans Approved According to Which Its Total Population Should be Under 11 Million in 10 Years], Shenzhen News Network (Aug. 24, 2010, 7:46 AM), http://www.sznews.com/finance/content/2010-08/24/content_4860257.htm.

[178]. See北京市人民政府办公厅关于印发《北京市积分落户管理办法（试行）》的通知 [Administrative Measures for the Settlement of Beijing Hukou Points] (2016), http://zhengce.beijing.gov.cn/library/192/33/50/438650/79206/index.html; 年上海积分落户政策 [The Policies of Hukou Points in Shanghai, 2017], Hukou Shanghai, https://web.archive.org/web/
20170826093541/http://www.hukoushanghai.com/lhsh/907.html (last visited Sept. 26, 2017).

[179]. 北京市城市总体规划缘何“短命”？[Why Is Beijing’s Master Plan “Short-Lived”?], People (June 6, 2011, 8:43 PM), http://politics.people.com.cn/GB/30178/14830221.html.

[180]. Id.

[181]. Yi Huiyun, 京沪启动新一轮城市规划编修：计划赶不上变化 [New-Round Amendment of Urban Planning Gets Started in Beijing and Shanghai: Plan May Not Be Able to Keep up with Changes], Sina Fin. (Apr. 3, 2014, 1:58 AM), http://finance.sina.com.cn/china/20140403/
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[182]. See深圳市城市总体规划 (1996–2010) [Shenzhen Master Plan (1996–2010)], Shenzhen News (June 8, 2013, 11:21 AM), http://www.sznews.com/news/content/2013-06/08/content_8159168_
3.htm.

[183]. 深圳总体规划获批 10年后人口低于1100万 [Shenzhen City Master Plan Receives Approval, and the Population Is Projected to Be Less than 11 Million in 10 Years], Shenzhen News (Aug. 24, 2010, 7:46 AM), http://www.sznews.com/finance/content/2010-08/24/content_4860257.htm.

[184]. See Tania Branigan, Riding Beijing’s Subway End to End: 88km of Queues and Crushes on a 20p Ticket, Guardian (Sept. 10, 2014, 7:51 AM), https://www.theguardian.com/cities/
2014/sep/10/-sp-beijing-subway-china-metro-queues-ticket-investment (“Each day 9.75 million passengers ride the lines across Beijing: nearly three times as many as take the London Tube and twice as many as use the New York system.”). See also, e.g., Daozu Bao, Shanghai Metro Hires People to Shove Commuters into Trains, China Daily (Feb. 4, 2010, 8:40 AM) http://www.chinadaily.com.cn/china/2010-02/04/content_9425324.htm; Kevin McGeary, Shenzhen Subway Line to Add Shuttle Trains During Rush Hours, Nanfang (Jan. 18, 2013, 7:00 AM), https://thenanfang.com/shenzhen-subway-line-to-add-trains-during-rush-hours.

[185]. See, e.g., 从宿迁到昆明：商人刘卫高的“地”国 [From Suqian to Kunming: The “Land” Empire of Businessman Weigao Liu], Sina News (Mar. 19, 2015, 9:32 AM), http://news.sina.com.cn/zl/zatan/2015-03-19/09323406.shtml; Shen Fan Cui Xiankang, 受贿超2400万云南原副书记仇和获刑14年半 [The Former Deputy Secretary In Yunnan, Qiu Ji, Accepted Bribes for Over RMB 24 Million and Was Sentenced to a Prison Term of 6 Months and 14 Years], Caixin (Dec. 12, 2016, 5:28 PM), http://china.caixin.com/2016-12-15/101027333.html (last visited Mar. 12, 2017).

[186]. Linmao Xia, Analysis on the Technical and Political Factors of the Regulatory Detailed Planning Alteration in Beijing 78 (2005) (unpublished Ph.D. dissertation, Tsinghua University) (on file with author);

[187]. Yuefeng Chen, Legal Control Over City Planning Power: A Realistic Perspective 112 (2010) (unpublished Ph.D. dissertation, Shanghai Jiaotong University) (on file with author).

[188]. 深圳市城市规划委员会章程 [Charter of Shenzhen Urban Planning Commission] (promulgated by the Shenzhen Urb. Plan. Comm’n, Aug. 1, 2002, effective Aug. 1, 2002), arts. 18, 27, http://www.szpl.gov.cn/szupb/zcfg_6712/czgc/201105/t20110506_457328.html; Yuefeng Chen, supra note 187, at 106.

[189]. Yuefeng Chen, supra note 187, at 107.

[190]. Interview with a former Shenzhen urban planning pfficial (Jan. 10, 2017) (transcript on file with author).

[191]. 深圳市城市规划委员会章程 [Charter of Shenzhen Urban Planning Commission], art. 12; 吴丹 (Dan Wu), 深圳市存量土地背景下控规管理机制研究–以控规局部调整为例(A Study of Regulatory Control Plans in Urban Redevelopment in Shenzhen: Partial Adjustments as an Example) 11–13 (unpublished manuscript) (on file with author).

[192]. Interview with Dan Wu (October 6, 2015).

[193]. See, e.g., 罗湖城市更新快得想不到原因就是改革放权 [Unbelievable Pace of Urban Renewal in Luohu: The Reason is Reform and Devolution of Power], Shenzhen News (Feb. 15, 2017, 9:08 AM), http://dc.sznews.com/content/2017-02/15/content_15278331_2.htm.

[194]. 关于加强北京市城市建设节约用地标准管理的若干规定 [Stipulations on Strengthening Urban Construction Land Use Control Standards] (promulgated by the Beijing Mun. People’s Gov’t, effective March 24, 2008), http://www.lawinfochina.com/display.aspx?lib=law&id=6808.

[195]. 上海市城市规划管理技术规定 [Shanghai Urban Planning Administration Technical Regulations] (promulgated by the Shanghai Mun. People’s Gov’t, Oct. 18, 2003, effective Jan. 1, 2004), http://www.shanghai.gov.cn/nw2/nw2314/nw2319/nw2407/nw12939/u26aw972.html.

[196]. 广州市城乡规划技术规定 [Guangzhou City Urban and Rural Planning Technical Regulations] (promulgated by the Guangzhou Mun. People’s Gov’t, Oct. 19, 2015, effective Jan. 1, 2016), http://www.gz.gov.cn/gzgov/s8263/201512/731366b75b7c4c11af46b24c8550412c.shtml.

[197]. 深圳市城市规划标准与准则 [Shenzhen Urban Planning Standards and Rules] (promulgated by the Shenzhen Mun. People’s Gov’t, effective Jan. 1, 2014) http://www.zzguifan.com/webarbs/
book/52416/955629.shtml.

[198]. Residence Districts: Overview, N.Y.C. Dep’t City Plan., https://www1.nyc.gov/site/
planning/zoning/districts-tools/residence-districts-r1-r10.page (last visited Mar. 20, 2018).

[199]. See Qiao, supra note 39, at 103.

[200]. Hongbin Cai et al., To Build Above the Limit? Implementation of Land Use Regulations in Urban China, 98 J. Urb. Econ. 223, 223–24 (2017).

[201]. Id. at 224.

[202]. Id.

[203]. See Guojin Qi et al., 关于银行不良资产包涉及抵押工业地产的收购处置调研报告 [Research Report on the Acquisition and Disposition of Non-Performing Banking Assets Including Mortgaged Industrial Real Estate] (2015), http://www.coamc.com.cn/dfzch/jtyf/
ywtt/201508/P020150812561751803967.pdf.

[204]. See id.

[205]. See id.

[206]. See id.

[207]. Id.

[208]. Huajian Zhong, 俞正声部长告诫大城市一把手：城市规划公开才能遏制腐败 [Minister Yu Zhengshen Warned Leaders of Big Cities: Only Public Urban Planning Can Contain Corruption], Urban Planning Communication, No. 23, at 3 (2000).

[209]. See Zhenyu Chen, 城市规划中的公众参与程序研究 [A Research on the Process Related to Public Participation in Urban Planning] 42–43 (2009).

[210]. See上海市城市规划条例(2003修正), [Shanghai Municipal Regulations of Urban Planning (amended 2003)] (promulgated by the Shanghai Mun. People’s Cong. Standing Comm., Nov. 13, 2003), art. 26, http://www.shqyg.com/renda/cwhgb/node185/userobject1ai609.html.

[211]. See id., arts. 17–19.

[212]. See 北京市城市规划公示管理暂行办法 [Beijing City Interim Rules on Urban Planning Publicity] (promulgated by the Beijing City Gov’t Comm. of Urb. Plan., Nov. 7, 2003, abolished Jan. 1, 2009).

[213]. See Peng Xinqiong, 北京城市总体规划（2004–2020年）昨起公示 [Beijing City Comprehensive Plan 2004–2020 Publicized Yesterday], News 163 (Nov. 7, 2004, 2:09 AM), http://news.163.com/41107/2/14I5OQSA0001124T.html.

[214]. See Bing Zou et al., 从咨询公众到共同决策—深圳市城市总体规划全过程公众参与的实践与启示 [From Public Consultation to Joint Decision-Making: Practice and Implications of Public Participation in the Process of the Shenzhen Comprehensive Urban Plan], 35 City Plan. Rev. 91, 91–96 (2011).

[215]. See 中华人民共和国城乡规划法 [Urban and Rural Planning Law of the People’s Republic of China] (promulgated by the Nat’l People’s Cong., Oct. 28, 2007, effective Jan. 1, 2008).

[216]. Id. art. 26.

[217]. Id. art. 48.

[218]. Id. art. 50.

[219]. See, e.g., 定安县人民政府与定安金地建设开发有限公司规划行政管理上诉案 [People’s Gov. of Ding’an Cty. v. Ding’an Jindi Constr. & Dev. Co.] (Hainan High People’s Ct. 2016), http://openlaw.cn/pdf/judgement/b25f8d1c215d453d94c32965ad6f94bf.

[220]. See generally Guangxin Liu & Yanwen Liu, 论城市规划过程中的公众参与 [On Public Participation in Urban Planning], 8 Theoretical Res. Urb. Construction 1 (2013); Yanfen Ye, 论城市规划过程中的公众参与问题 [On the Problem of Public Participation in the Process of Urban Planning], 13 Econ. Vision 390 (2013). This is also consistent with Carol Rose’s critique of master plans. See Rose, supra note 68, at 875.

[221]. 中华人民共和国城乡规划法 [Urban and Rural Planning Law of the People’s Republic of China] (promulgated by the Nat’l People’s Cong., Oct. 28, 2007, effective Jan. 1, 2008), arts. 9, 48, 60.

[222]. See, e.g., 唐小红诉苏州市规划局规划许可纠纷案 [Xiaohong Tang v. Planning Bureau of Suzhou City] (Canglang District People’s Ct. 2007); Chenwei Ji, 论行政诉讼中城市规划利害关系人的判定 [On the Judgment of Urban Planning Stakeholders in Administrative Litigation], 32 Legal F. 70 (2017).

[223]. See, e.g., Yang Jian, 改规划乱规划无规划政绩驱使致城市规划乱象频出 [Problematic Urban Planning Motivated by Political Achievement], People (Dec. 13, 2013, 8:23 AM), http://finance.people.com.cn/n/2013/1213/c1004-23830135.html.

[224]. Jia Lunong, 上海市中心建经适房遭附近业主联合抵制 [The Construction of Economically Affordable Housing in the Downtown Shanghai Faces Boycott from Nearby Property Owners], Sina News (Aug. 17, 2010, 1:00 AM), http://news.sina.com.cn/c/sd/2010-08-17/010020910222.shtml.

[225]. Id.

[226]. Id.

[227]. See Xiao Wenxin & Li Kainan, 媒体调查称兰州高低收入者均不满贫富混居政策 [Those with High or Low Incomes Are All Dissatisfied with the Policies of Mixed Rich and Poor Residences], Sina News (Oct. 8, 2010, 12:17 AM), http://news.sina.com.cn/c/sd/2010-08-10/001720860323.shtml.

[228]. See, e.g., Johnson, supra note 54, at 431; Sun, supra note 54, at 133, 136.

[229]. See, e.g., 近年新建大项目受到周边居民反对事件一览（包括PX事件） [Those Incidents That Received Opposition from Nearby Residents in Recent Years (Including the PX Incident)], iFeng (Sept. 20, 2014, 2:24 AM), http://finance.ifeng.com/a/20140920/13131025_0.shtml; Chen Yang, 东莞樟木头上百村民散步抗议建垃圾焚烧厂 [Hundreds of Villagers Protested the Construction of a Waste Incineration Plant in Zhangmutou, Dongguan], SouthCN (Mar. 29, 2010, 9:11 AM), http://news.southcn.com/g/2010-03/29/content_10554085.htm.

[230]. Johnson, supra note 54, at 436; Sun, supra note 54, at 136.

[231]. Shitong Qiao, Planting Houses in Shenzhen: A Real Estate Market Without Legal Titles, 29 Canadian J.L. & Soc’y 253, 258–66 (2014).

[232]. See Eli Mackinnon, The Twilight of Shenzhen’s Great Urban Village, Foreign Pol’y (Sept. 16, 2016), http://foreignpolicy.com/2016/09/16/china-demolition-economy-the-twilight-of-shenzhens-great-urban-village-baishizhou.

[233]. Furman, supra note 8, at 2. See also Peter Ganong & Daniel Shoag, Why Has Regional Income Convergence Declined? 1–4 (Hutchins Ctr., Working Paper No. 21, 2016).

[234]. Edward L. Glaeser et al., Why Is Manhattan So Expensive? Regulation and the Rise in Housing Prices, 48 J.L. & Econ. 331, 359–60 (2005).

[235]. Ganong & Shoag, supra note 233, at 2. Of course, land use regulation is not the only factor contributing to megacity housing shortages. For example, “[a]ccording to a recent study by Issi Romem, chief economist at BuildZoom, part of the explanation lies in the geographic characteristics of cities and metros—mountains, lakes, coastlines, etc.—that make it all but impossible to expand and add more housing.”). Richard Florida, Blame Geography for High Housing Prices?, CityLab (Apr. 18, 2016), http://www.citylab.com/housing/2016/04/blame-geography-for-high-housing-prices/478680.

[236]. See Mangin, supra note 8, at 106.

[237]. See id.

[238]. 中国或现50个“鬼城” 三亚威海排前十 [China’s 50 “Ghost Cities;” Sanya and Weihai Rank in the Top 10], Caixin (Oct. 14, 2014, 9:58 AM), http://m.datanews.caixin.com/m/2014-10-14/100738050.html.

[239]. Glaeser, supra note 4, at 6.

[240]. G.A. Res 71/256, ¶14(b) (Dec. 23, 2016).

[241]. Id. at ¶ 33.

[242]. Ellickson, supra note 93, at 705–11; Ilya Somin, The Emerging Cross-Ideological Consensus on Zoning, Wash. Post (Dec. 5, 2005), https://wapo.st/1Ny1U4C; Glaeser, supra note 9.

[243]. Glaeser et al., supra note 234, at 367.

[244]. See Ellickson, supra note 37, at 437.

[245]. Id.

[246]. See Wendell E. Pritchett, The Curious Tale of Public Participation in American Land Use Decisions (Mar. 14, 2017) (unpublished manuscript) (on file with author).

[247]. For a real-world practice, see Erica C. Barnett, How Seattle Is Dismantling a NIMBY Power Structure, Next City (Apr. 3, 2017), https://nextcity.org/features/view/seattle-nimbys-neighborhood-planning-decisions.

[248]. See James S. Liebman, Voice, Not Choice, 101 Yale L.J. 259, 259–78 (1991).

[249]. Rachel Meltzer & Jenny Schuetz, What Drives the Diffusion of Inclusionary Zoning?, 29 J. Pol’y Analysis & Mgmt. 578, 578 (2010).

[250]. Kent E. Portney & Jeffrey M. Berry, Urban Advocacy Groups, City Governance, and the Pursuit of Sustainability in American Cities 1, 28 (Aug. 21, 2009) (manuscript delivered to the Am. Political Sci. Ass’n), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1459082.