Is there an alternative process you are referring to? If so, what is it?
Private industries that regularly fail ought to instead be nationalized, especially ones that deal with basic necessities. The government should be building housing on a massive scale, and selling it at low cost to families, individuals for personal use only, non profit co-ops, etc. Hundreds of thousands of new apartment units ought to be built by the government as prefab units that are manufactured in pieces in factories and then shipped off for assembly at location. Basically, lego-ify housing. Such a solution would benefit greatly from economies of scale, and would go such a long way towards fixing the problem. This would take quite a lot of rezoning, but nothing impossible.
Capitalism works on the assumption that there is competition, but that’s not really possible with housing. You can’t realistically just move to a different place overnight every day to get the best deal, there are limits for how many residences exist in an area, etc. Housing is physically tied to land use, which means there essentially is no competition. As a result landlords price gouge, price fix, and charge thousands of dollars for single bedroom units that are run down and in need of repair. Government doesn’t work on the notion of competition. If the law says that X housing units are to be built in city Y, then it’s going to happen, all without a profit motive.
what incentive someone would have to develop property (finance and pay for the actual physical process of constructing a physical place for people to live
The government exists to maintain the stability and well-being of our country, so it has a responsibility to develop property to fix the housing crisis, and to replace the utter failure that is landlords. The people who actually build housing, the construction laborers, city planners, etc, they all are doing actual work and deserve compensation. Landlords don’t do that, owning is not a job and should not have a wage.
A society with landlords has failed at one of the most basic tasks. Housing is a human right, it should be easily accessible to everyone.