The article appears to be talking about vacant homes that are a result of people buying flats and only using them when they visit the city, not vacancies due to

The article appears to be talking about vacant homes that are a result of people buying flats and only using them when they visit the city, not vacancies due to demand bottoming out for new housing. A person wealthy enough to buy a spare Manhattan apartment isn't going broke if interest rates go up. Fixed-income securities are less attractive when there is increasing inflation. A bond that returns 1% will still only return 1%. You don't want your money stuck in 1% bonds when seeing double digit inflation. Interest rates basically go up to either counter or prevent an increase in the rate of inflation. It's difficult to target a single market to head off a speculative bubble with the tool of interest rates alone, especially if inflation is low and stable.