This takes the wrong legal slant. The developer is not selling homes to immigrants he is selling an investment. The chinese buyers don't expect to live there,even part time. For them they are buying a property, somewhat like a stock, whose value will rise at 5 percent per year, that rather than be valued in Yuan will be valued in dollars, and which they can always mortgage to get fast dollars. Can an entity of the US government regulate foreign investment? Yes it can, and its done all the time. More importantly they can tax the shit out of it. Like most legal questions related to foreign investment its how you argue it in court. This article frames the legal brief of the developer. Unfortunately no one asked the legal scholars about investment. If this sounds like money laundering it is. Check out those laws.