Avenir Properties said it is having to scrap the scheme because North Yorkshire County Council is reducing the size of the plot, on Coltsgate Hill, to build one of two footpaths as part of a redevelopment in the area.
Coltsgate Hill lies in an 11-acre area of derelict land west of the market place. The land is being developed in a £15m scheme, which began in June and is expected to take 21 months.
The development, described as the last part of a plan to revive the city's fortunes, will create a 20,000sq ft supermarket, four smaller shops, 21 apartments and a car park.
It will be linked to the city centre by walkways to Market Place West and Fishergate, and to the highway network by a new road from Blossomgate and Coltsgate Hill.
Harrogate-based Avenir Properties said it was about to start work on its development when it learned that one of the planned footpaths would take out an area earmarked for two town houses.
Amanda Brayshaw, the company's sales manager, said the impact of the change meant the scheme was no longer financially viable and, despite letters and telephone calls to the county council, the company had heard nothing for three weeks.
She said: "It is as if the county council is hiding behind a wall of silence. Ripon is crying out for affordable homes and we want to build five, yet the county council, which owns the land, has decided to take a slice of the agreed footprint. We cannot accommodate the town houses and the entire scheme will have to be scrapped.
"This is a real blow for the city's first-time buyers. We are asking the county council to sit around the table with us, but all we are hearing back is silence."
A council spokesman said: "We are sorry if Avenir Properties feels we have not consulted them sufficiently. Our consultant engineers met the company on behalf of the county council and have responded to all correspondence received on this matter. We would also like to clear up any misunderstandings which may have arisen over this proposed development.
"A meeting is being arranged between the county council and Avenir, at which any outstanding issues can be raised."