Chinese Foreign Real Estate Investment and Voting in U.S. Presidential Elections

Abstract

Few economic issues affect people as personally and universally as housing. Yet despite the increasing globalization of housing markets, little is known about its political implications. This study investigates whether rising Chinese investments in U.S. homes influenced local voting in recent U.S. presidential elections. Building on theories of self-interests, sociotropic politics, and nativism, I develop hypotheses on the electoral effects of foreign real estate investment through greater home equity, improved local economies, and increased immigration. Using a series of difference-in-differences designs that combine a unique exogenous shock to Chinese capital outflows in 2013 with original measures of local attractiveness to Chinese investments, I find that greater exposure helped local home prices recover but reduced 2012–2016 presidential vote for the incumbent Democratic Party. Larger white populations exacerbated this negative effect while stronger local economies attenuated it. Contradicting predictions of self-interests, the negative effect exacerbated in areas with high shares of homeowners. Together, the results suggest competing effects driven more by nativist and sociotropic concerns.