Work has started on 171 new homes off Old Gloucester Road in Cheltenham.
Housing association Bromford is building the homes on land including Cheltenham Borough Council’s former Arle Nursery site.
The development will include 92 homes for social rent, 22 for shared ownership and 57 for open market sale.
The project has been part-funded by Homes England.
The new homes will include air source heat pumps and solar panels.
The scheme will also contribute more than £2.2 million towards local schools, roads, bus services and play areas.
The first homes are due to be completed in autumn 2027, with the full development expected by winter 2029.