How does one build macOS software without Apple hardware?

You are not allowed to run macOS without a mac and so building native apps.

However you could rent macs and access them with services like Macminicolo, Amazon EC2 Mac instances and others. With them you can run Xcode and build your apps on the cloud.

Yes as an individual, you need Apple hardware to develop iOS and macOS software. Even if you developed your app using something other than a Mac, you will need a Mac to compile the final product that is uploaded to the App Store. Xcode is the primary tool for macOS and iOS development and it is only available on the Mac.

However, there are some workarounds using Electron which would let you build desktop apps for all platforms including macOS. Note that these apps would not be considered the same as macOS apps available through App Store