We work across public sector housing (section 8,9) and private sector housing. 

The positives are the attractive city location within a big, growing population...in a city with strong job growth within the health and education sectors, among other big employers. 

In the real estate sector, depending on your location, that might be able to only get you 1 deal or it might get you 5 in the rust belt (or it might not be able to get you any deals if you're unlendable).

DSTs allow for investors to 1031 exchange into professionally managed portfolios that are diversified across asset class/sector/geographic, while being a passive owner and earning tax advantage income.

I have a few friends in the established sector in CA and the biggest complaint they were having on purchased facilities would be the established security that comes with the building. 

I would just learn all about a particular sector like multifamily or self-storage and try to find sponsors I like.

The same is true of business sectors within a metro area.

So far lenders seem to want to know that there is some level of experience level in that specific sector, and if not then other factors have to considered and maybe concessions made.

How do you become, as a starting-out developer, a public sector housing developer?

Real estate is a very wide sector, figure out what area you want to focus in on and become an expert!