Garages in a street in Fishersgate are to be demolished to make way for seven “affordable” homes.
The site – in Gardner Road – is one of several where Adur District Council plans to build 56 homes in place of 295 garages.
The £16 million scheme will be funded with help from a £2.24 million grant from Homes England, a government agency.
And the council plans to borrow about £13.7 million as the project move forward.
It hopes to submit a planning application by the end of the year, start work next summer and complete work on the homes next winter.
The council has about 700 people on its waiting list and a shortage of homes available at low-cost rents.
The project won approval at a meeting of the full council on Thursday 29 October.
It is similar to a scheme in Brighton and Hove, with homes being planned and built on under-used council land including garages.
A dozen homes were completed in Buckley Close, in Hangleton, earlier this year.
At the meeting on Thursday councillors supported the scheme but asked why rents would be “affordable” not “social”, given that social rents are cheaper for tenants.
Councillor Carson Albury, executive member for customer services, said that the scheme would not have been financially viable if social rents were charged.
He said: “I would have loved for them to be social rents – that was how I intended the scheme to go through originally – but it was either affordable rents or nothing at all.”
As well as the seven homes in Gardner Road, Fishersgate, the council plans to build
- twelve homes in Downsway in Southwick
- six homes in Wilmot Road in Shoreham
- four homes in St Giles Close in Shoreham
- two homes in Brighton Road in Shoreham
- nine homes in Daniel Close in Lancing
- seven homes in Gravelly Crescent in Lancing
- two homes in Leconfield Road in Lancing
- seven homes in Sylvan Road in Sompting
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