So you really don't understand capitalism do you? It has nothing to do with being "victims" and everything to do with maximizing profit.
Developers are going to charge whatever price the market will bear. If they cannot get the rate of return they want they will simply not build. Nowhere in that equation is there any incentive to build housing units for families of moderate incomes. Low-income housing or whatever term you want to use will never, has never been built using purely "market-based" solutions as far as I am aware.
Developers are not rushing to build houses that average families can afford but rather over-sized McMansions that they can sell for maximum profit. Even Langford, the Libertarian Capitalists favorite local municipality, had to use incentives to create their moderate-income housing.
Developers build what the market wants, not what they think it wants and they charge what the market will pay, not what they want it to pay.
I'd put a little bit of faith in your theory if there were two development companies colluding and we as consumers were getting wiped on the floor, but there are dozens and dozens of home builders in the CRD who sell for as little as they can to turn enough profit to stay in business.
And then there are thousands of home owners who happen to put their houses on the market at the prices we see.
Now here's a question. Why aren't the folks who believe the silly myths that developers are raking in millions on our blood sweat and tears selling the homes they bought in the 80's with no capital gains? They seem to have no qualms with capital gains in the hundreds of thousands.
Anyways this is a silly debate.