Work has begun on the Evershed redevelopment, which will transform a derelict St Albans city centre site.
The Higgins Construction development will provide 80 new homes alongside 52 town houses, 16 maisonettes and 12 apartments.
Mark Witham, of Spen Hill Developments, said: "We're very excited that Higgins is now on site and making a start on this important development.
"St Albans is a city that is really going places, particularly in this location with all the improvements coming forward to London Road.
"We're delighted to play out part in its resurgence."
St Peter's ward councillor Alun Davies, who met with project leaders on Tuesday, said: "I am very pleased that work has started as the land has been empty for such a long time and the development is on brownfield land which is ideally what we want.
"My involvement is so try and minimise the impact on local residents and businesses and so far so good, they haven't reported any issues.
"There is a momentum there because of a number of new businesses which we do not want to be impacted."
Steve Leakey of Higgins Construction said: "We are proud to be involved in this project that will enhance the local area."
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