Social housing contractor Ring Stones Maintenance & Construction is on site at the £6m Primrose Mill development in Burnley for Calico Homes and Hobstones Homes.
The Primrose Mill scheme comprises of 60 affordable homes, with a mix of two- and three-bedroom properties and 12 apartments.
One third of the homes are designated for general sale, with a number available under the Affordable Homes Programme at 80% of market rent.
Jon Rukin, managing director of Ring Stones, said: "Like much of the country, Burnley is facing an affordable housing shortage, with demand far outstripping supply. Many younger people who have grown up in the area are struggling to get on the property market.
"The positive impact of this development will resonate far beyond those who manage to secure a home. We will also be looking to create real value within the community through employment and training initiatives and helping to stimulate investment in the local economy."