|My understanding of the dynamics of the housing market|
Three different inter-related processes
Some people thus conclude that developers are greedy and self-interested, but every one else is also greedy and self-interested. Property owners want to sell their property as high as possible, prospective buyers want to pay the lowest price possible, elected representatives want to keep their job by appealing to their voters, why single out developers? Ultimately, economics is not a moral play, if you have a desired outcome, then you need to look at the actual levers that you have to influence the system in the desired direction, to reward people for doing what is socially desirable.
So if you want lower market value of housing, then you can either increase supply or decrease demand. To increase supply, the only way to do so is to incentivize developers to build more and faster, and to achieve that, then you need to make it possible for them to build at a lower cost, which is the opposite of what generally happens, as people try to squeeze every penny out of the "greedy" developers.