Adur District Council’s old garage compounds in Daniel Close and Gravelly Crescent, in Lancing, will be replaced by 16 properties.
This includes a mix of one, two and three-bedroom properties.
The houses, which the council said will be energy-efficient, will be made up of “factory-built modules”.
These are pieces of the homes that are made off-site to cause minimal disturbance to neighbours and reduce waste.
The council said: “This method of building will significantly reduce the amount of construction work that has to happen on-site, which will mean far less disruption to local residents.”
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The council also said this would make the project more sustainable and affordable.
The new homes are part of the council’s small sites programme, which turns under-utilised council-owned sites into housing areas.
So far this year, 14 residents have moved into similar developments.