Well, occasionally a developer does mess up! So it sits empty for a year or two, then prices fall to the true price, and only that individual developer lost out. The city still got its property tax, an empty new building for a year or two is no worse than an empty lot for anybody, etc. etc. etc.

But people that claim to hate developers find this sort of situation, a developer that built too expensive housing and ends up eating a loss, much worse than the current state of people being displaced all the time.