According to the Mishnah on today’s daf (=page), there are a number of restrictions on selling or renting houses or fields to non-Jews. These restrictions may stem from concern that the places that are given to the non-Jews may lose the opportunity for fulfillment of mitzvot – e.g. that tithes will no longer be separated from the produce of the field – or that there is a prohibition against giving a non-Jew a stakehold in the land, based on the interpretation of the passage in SeferDevarim (7:2) that concludes with the words lo tehanem.
Rabbi Yossi distinguishes between three different areas:
The Land of Israel itself, where these laws are most severe,
Suria, and area to the north of Israel, where some of these laws apply while others do not, and
Hutz la’aretz – the Diaspora – where both houses and fields can be sold to non-Jews.
The area of Suria mentioned in the Mishnah is the Biblical area to the north of Israel, known as Aram Damesek and Aram Tzovah. We find that Suria has a unique status in halakhah with regard to many halakhot, not only because of its proximity to the Land of Israel, but because it was part of the northern Kingdom of Israel under several kings during the period of the first Temple. Furthermore, some opinions suggest that the northern border of Israel extends well to the north of the Jewish settlement in Israel during the second Temple period. There was also a large Jewish population center there, and some of the political leaders there were descendants of Jews (like the grandchildren of King Agrippas) or were closely allied with them.
All opinions in the Mishnah agree that houses should not be rented as dwelling-places, since the pagan will bring his idols into the house, and the Torah forbids allowing such gods into one’s house (Devarim 7:21). The rishonim are aware that it is common practice to rent houses to non-Jews, and they differentiate between Israel and the Diaspora, arguing that the passage in Sefer Devarim really forbids only a Jew from bringing idols into his home, and that there is no prohibition against allowing others to do so.