Construction is officially underway on a major new affordable housing development in downtown Manchester, turning what was once a parking lot between Orange and Pearl streets into a new residential complex.

The project, being developed by NeighborWorks Southern New Hampshire, will include 126 affordable apartments, along with 12 townhomes that will be offered for sale and a 455-space public parking garage. The apartments will include one-, two- and three-bedroom units, with rents expected to range from approximately $1,100 to $1,800 per month.

The development comes as housing costs continue to put pressure on Manchester and communities throughout New Hampshire. Current median rents statewide are approximately $1,769 for a one-bedroom apartment, $2,111 for a two-bedroom and $2,540 for a three-bedroom, according to CoStar data provided by New Hampshire Housing.

That makes the new project particularly significant for renters who have been priced out of the private market.

The development is also notable because it combines affordable rental housing with new homeownership opportunities. The 12 townhomes will provide a smaller number of opportunities for buyers, while the apartments are designed to serve households struggling to find reasonably priced rental housing.

For Manchester, the project represents more than simply adding another apartment building. It is an example of how underused urban land can be converted into housing while preserving valuable downtown parking infrastructure. The 455-space garage is intended to replace parking previously provided by the site.

The human impact is also becoming increasingly clear. NeighborWorks staff say many residents in their existing properties have experienced homelessness or major changes in their family circumstances before securing stable housing. Having an affordable place to live can give those households the stability needed to address employment, family and other challenges.

The new apartments are expected to be ready for residents in late 2027.

For New Hampshire's broader housing market, the project highlights an approach that is becoming increasingly important: using existing land and infrastructure to create housing in communities where demand is already strong.

Manchester is still facing a significant shortage of affordable housing, but projects like this show what can happen when public, private and nonprofit interests come together to turn underused property into new homes.

As construction moves forward, the Pearl and Orange Street development will be one of the city's more closely watched housing projects—and a tangible example of New Hampshire's continuing effort to add housing for residents who are increasingly being priced out of the market.