Developers have the same incentive, they are not incentivized to build properties they'll make less on, even if supply goes up. I've seen lots of properties built, they can be half unoccupied/empty and the rents/leases don't change. They're simply not going to lower the value of their own properties, they'll keep it inflated because at least then it’s a tax write-off/loss.
This increased supply concept is being parroted but no one can provide examples of supply being increased and rents going down, or the very least demand can't be kept up with and no area gets saturated to the point prices go down. Usually the opposite happens, new apartment/housing = nicer neighborhood = more desirable area = rent/housing values go up. We usually call this gentrification. Not unless it was a government subsidized project or section 8 housing or a local economic collapse and people leaving (which cheap rent means little if there are no jobs/economy).
Developers are very risk adverse, they’ll never build in an area that risks supply outstripping demand.
I don't understand how people can live for 20 years, see these patterns and still believe the theories they get taught in economics 101 in school and think they're fully educated on the matter.