The turf has been cut on the first in a series of affordable housing projects in Gwynedd.
Around 90 homes will be built across the county by Cyngor Gwynedd as part of the Tŷ Gwynedd scheme aimed at local people.
It marks the first time the county council has built its own housing on the Llanberis site in over 30 years.
Three homes will be built in the village - two semi-detached houses with two bedrooms; and one detached house with three bedrooms.
The council says the new homes will be aimed especially at locals who find it difficult to buy or rent a home, but may not qualify for social housing.
Councillor Craig ab Iago, cabinet member for housing and property, said: "We are in the midst of a housing crisis, and it's essential that we build more houses to address the acute shortage of affordable homes in our communities."
"Tŷ Gwynedd is one of the key projects within the housing action plan, and it's a moment of great personal pride to see this vision beginning to take shape after years of thorough planning by council officers."
"I would like to thank everyone who joined us at the event to celebrate this significant milestone in Llanberis, especially the children of Ysgol Dolbadarn, who represent the future of our communities."
Cyngor Gwynedd says it's aiming to provide over a thousand affordable homes within three years as part of its wider housing action plan.
The Tŷ Gwynedd houses are being built with a focus on energy efficiency, using green technology and innovative design to keep energy bills down. Local Welsh slates will also be used on the roofs.
Cllr ab Iago added: "It's important to highlight that this is just one of a number of plans that the council is implementing to tackle the crisis."
"Other plans include providing grants and loans to help the people of Gwynedd to buy and renovate houses, buying property to rent to local people at an affordable rate and several plans to tackle homelessness in Gwynedd."
"All these projects are vital to ensure that we provide the basic human right of safe, affordable, and suitable homes for the people of the county."
Building work on the Tŷ Gwynedd homes in Llanberis is expected to be completed next summer - with the houses being allocated through the Tai Teg affordable homes register.