Close to permanently rented out to foreign/domestic investors not living there.

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.

Why would an absentee foreigner rent a flat? Unlike buying it, that's not even an investment. It's just throwing money away.

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?

Not sure why they do it myself or how prevalent it is.

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.

Because in some locations (c.f. London) this makes the asset far more liquid. Having renters requires you to engage a property management company and the presensce of tennants makes it harder to flip the property quickly if you need to get access to your stash of ill-gotten gains.

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.

Until you cite some statistics (specifically the residential vacancy rate), you are in fact just repeating stories and anecdotes.