The pounds 60m Bonamy and Bramcote project in Rotherhithe is one of the largest urban renewal schemes in London.
It will have created 900 new and refurbished homes when work is completed in February 1996. A quarter of the 263-strong workforce live in Southwark.
Sir Brian Pearse, chairman of the Housing Corporation, a national body funded by the Government and the private sector which regulates and supervises the 2,000 housing associations registered with it, said the scheme was 'an excellent example of good practice'.
The corporation, which has a pounds 2bn budget for 1994-1995, allocates funds to selected schemes across Britain.
Unemployment in the area is running high with figures in October showing the rate had risen to 21.4 per cent.
The Southwark scheme is being run jointly by the South London Family Housing Association, Southwark council and Barratt, the builders.
Sir Brian added: 'To have 25 per cent of the workforce coming from the local community, as at Bonamy, is more than commendable.
'Development schemes of this type, involving huge contracts, large sums of money and major contractors should involve local labour as much as possible.'
One local bricklayer who has benefited is Mohammed Sheriff, from Queen's Road, Peckham.
He has lived in the area for more than five years and has mastered the skills of his trade while working on the Bonamy project.
'It's brilliant that so many local people are employed here, many learning skills for the first time,' he said.
'Crime arises from the poverty and hardship caused by unemployment and schemes such as this are doing something practical to turn those problems round.'
When the scheme has been completed, up to 75 per cent of existing households will have been rehoused on the estate.
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