Small and Emerging Developers Roundtable Surfaces Pathways to Scale Affordable Housing Production

The Urban Institute convened a Small and Emerging Developers Roundtable on March 9, 2026, bringing together leaders from across the housing ecosystem to examine one of the field’s most pressing challenges: how to support small and emerging developers in moving from one-off projects to sustained, scalable development pipelines.

At the center of the discussion was a defining question: What combinations of policy, capital, and capacity interventions can help developers grow without increasing public-sector risk or slowing housing production?

Persistent Structural Barriers

Participants identified a set of interrelated challenges that continue to constrain small and emerging developers.

Regulatory and process barriers remain a primary obstacle. Lengthy permitting timelines, restrictive zoning, and complex entitlement processes introduce uncertainty and delay, disproportionately affecting smaller developers who lack the capital reserves to absorb extended predevelopment periods. Public procurement structures and competitive funding mechanisms can further limit access, often favoring larger, established firms with existing scale.

Capital access continues to be one of the most significant constraints. Many emerging developers struggle to secure financing due to limited balance sheets and lack of track record, even when projects are fundamentally viable. Complex capital stacks increase transaction costs and risk, while early-stage and predevelopment funding gaps persist across markets.

A notable insight from the discussion was the importance of credit enhancement tools and guarantees. Participants identified these mechanisms as among the most actionable near-term solutions to unlock capital, reduce lender risk, and accelerate project timelines—particularly without relying solely on increased subsidy.

The Enterprise Capacity Gap

Beyond individual projects, participants emphasized a deeper structural issue: the misalignment between existing programs and the realities of building sustainable development businesses.

Many current interventions are designed around single transactions rather than long-term enterprise growth. While technical assistance programs can help developers initiate projects, they often fall short of supporting the operational infrastructure required to scale—such as staffing, systems, and pipeline development.

This dynamic creates what several participants described as an “enterprise capacity-building cliff,” where support diminishes before developers reach stability. The result is a cycle in which promising developers are unable to transition into consistent producers of housing.

Inequities and Ecosystem Fragmentation

The roundtable also highlighted longstanding inequities embedded within the development ecosystem. Structural factors—including disparities in access to capital, networks, and institutional relationships—continue to advantage larger, often white-led firms.

These inequities are compounded by ecosystem fragmentation. Developers, lenders, public agencies, and investors frequently operate in silos, making it difficult for emerging developers to navigate pathways to opportunity or build the relationships necessary for sustained growth.Participants also challenged the broad use of the term “emerging developer,” suggesting the need for more precise classifications that reflect differences in scale, business models, and growth goals.

Key Levers for Change

Despite these challenges, the discussion surfaced a clear set of opportunities to strengthen the pipeline of small and emerging developers.

Expanding access to capital remains foundational. Increasing the availability of predevelopment funding, alongside the use of guarantees and risk-sharing tools, can help bridge early-stage gaps and attract broader investment.

Investing in developers as businesses represents a critical shift. Participants emphasized the need to treat developers as entrepreneurs—supporting not just projects, but the growth of firms through enterprise-level capital, operational support, and long-term capacity building.

Strengthening partnerships and networks was identified as essential. Strategic collaborations between emerging and established developers can help build track record and expand access—provided these partnerships are structured to be equitable and non-extractive. More broadly, the field would benefit from deeper coordination among public, private, and philanthropic actors.

Leveraging public policy tools offers another pathway forward. Housing Finance Agencies, local governments, and other institutions can influence outcomes through program design, land use policies, procurement practices, and targeted incentives. Tools such as Qualified Allocation Plans (QAPs), set-asides, and participation requirements can help incentivize inclusion and capacity building.

Advancing equity within evolving constraints remains a cross-cutting priority. Participants emphasized the importance of reexamining how risk is defined and priced, while continuing to build the evidence base for inclusive development strategies that expand access to opportunity.

From Projects to Pipelines

A central takeaway from the roundtable was the need to move beyond a project-by-project framework toward a more holistic, ecosystem-based approach.

The goal is not only to produce more housing units, but to cultivate a stronger, more resilient development ecosystem—one in which capital circulates within communities, developers can grow sustainable enterprises, and public, private, and philanthropic actors align around shared outcomes.

As the affordable housing field continues to confront rising costs and persistent shortages, the role of small and emerging developers will be increasingly important. Unlocking their potential will require coordinated action across policy, capital, and capacity—along with a fundamental shift in how the field defines and supports development at every scale.