For lower end housing stock, homeowners usually "jump" up to more expensive properties as they become more financially stable or as they need the room. This market seems entirely disconnected from that, but I'm not sure.
So, yes, the fact that global-elite billionaire scumbags use our real estate to launder their drug/blood money is a huge issue.
For lower end housing stock, homeowners usually "jump" up to more expensive properties as they become more financially stable or as they need the room.
That seems to be a Boomer thing. They bought the 3000 SF houses that are impossible to maintain unless you hire maids (which Americans don't like to do, even though at $20/h they're still cheaper than doing your own cleaning). I think the young generation values freedom and experiences (e.g. travel) more than stuff and space. Frankly, I find McMansions depressing.
Unfortunately, in many cities it's impossible to get a 1000 SF place at an appropriate price. You end up buying or renting 2000+ because that's all there is, unless you're talking about seriously defective housing (e.g. no laundry in the building, no dishwasher.)
Also, any source for your assertion about the effect of rent control on rents in NYC? I'm very interested in this if you have it.
In the case of NYC housing, the demand is inelastic, meaning that the price increases stick because enough people do not have any acceptable alternative to paying it (likely because employment in their chosen profession requires being physically located in or near Manhattan).