Foreign investments in Manhattan are usually rented out and are part of the housing supply.
Also, lots of the medium-height buildings are historic in nature, so demolishing them is not a very good option.
I agree that there could be some further development, but there should be some sort of regulation to avoid ghost-town status.
Had all of the apartments been rented out to actual residents, the picture would have been much better.
If this is common we should build more and take the money of these stupid foreigners. If we build enough, regulation is unnecessary - why prevent foreigners from giving us their money?
Perhaps subletting rent stabilized housing when the price increases further? In this case it wouldn't be much of a problem.
I haven't seen any statistics, just some anecdotal evidence for absentee renters, especially in the past two years.
Regardless, ownership is obviously a bigger problem.
It is not just stories and anecdote, there are large portions of high-end London real estate sitting empty because foreign buyers often do no want a tennant.
Sometimes this results in very inefficient transportation/location for actual legitimate companies that operate there and people who live there because of the dead weight real estate.