TEN eco-friendly apartments are being built by Two Rivers Housing in Cinderford.
Construction methods which reduce carbon emissions will be used and long term energy bills for future tenants should be reduced.
It will provide a 44 per cent energy efficiency improvement on current building standards and no more than 105 litres of water per person, per day will be used.
The building is taking place in partnership with Cavendish Park Builders and the Forest of Dean District Council.
District councillor Peter Amos, cabinet member for planning and housing cut the turf at a special ceremony.
He said: "At this extraordinary time of recession we are trying to identify opportunities not only to provide housing but also jobs and work for our local firms.
"This development, which represents an investment of nearly £1.3million, is being constructed by a local firm and is due for completion by October of this year. It will contribute an inward investment into the district of some £500,000.
"We would especially like to congratulate Two Rivers Housing on looking to the future by building high energy efficient housing which will reduce the costs of running the new homes for the occupants as well as reducing the amount of CO2 emitted by each property."