Amid a rise in homelessness across Worcester, the city’s housing authority will start constructing what officials call the first-in-the-state building of micro-units to house people who have been chronically homeless.

The three-story complex named “A Place to Live” will feature 24 fully furnished studio apartments along with a unit for a resident manager. The building will also have a shared common space where residents have access to resources such as health and wellness programs and assistance finding jobs.

“Investments in permanent supportive housing will help decrease the number of homeless individuals in Worcester,” said Alex Corrales, CEO of the Worcester Housing Authority, at a groundbreaking ceremony on Monday. “This model will not only help people experiencing homelessness to achieve long term housing stability, but also improve their health and well-being.”

According to the Central Massachusetts Housing Alliance, the homeless adult population in Worcester rose nearly 50% to 500 people between February 2021 and Spring of this year. City officials and housing advocates say Worcester’s shortage of affordable housing is fueling the increase in homelessness.

Median monthly rent for August in the city is nearly $1,900, up more than $200 from a year ago this month, according to Zillow. About 50% of Worcester renters are cost-burdened, meaning they’re paying over 30% of their income on rent and utilities. Housing advocates say some people who escape homelessness and find an apartment are becoming homeless again because they can’t afford increases in rent.

“We have folks with [housing] vouchers that just can’t use them. They can’t find units that are at a rent level that the voucher can pay,” said Leah Bradley, CEO of the Central Massachusetts Housing Alliance. “Investing in [apartment] production helps to build that supply.”

Worcester Housing Authority officials say they plan to complete construction of the new complex at 38 Lewis Street by early next summer. The housing authority will work with other housing agencies to reach out to people who are homeless and help them complete applications to live in the building. A lottery will then determine which applicants can move in.

Similar to public housing, monthly rent will be on a sliding scale capped at no more more than about 30% of a resident’s gross monthly income. If residents have no income, they will not have to pay anything.

City officials and housing advocates stressed the new project is an example of a “housing first” response to homelessness. Unlike other forms of housing for homeless people, applicants will not have to be sober or meet other behavioral health benchmarks to be eligible to live in the new complex.

“Housing is a basic need,” Bradley said. “Folks who are homeless for long periods of time tend to have psychiatric issues and may resort to substances. And so putting folks in housing and not having folks on the street is really what’s going to help them make that next step and meet their potential.”

The Worcester Housing Authority has experienced several pandemic-related construction delays with the “A Place to Live” project after announcing plans for it in 2020. Corrales said he initially wanted the complex to be a modular building constructed in a factory, which is then assembled onsite, a process that would be less expensive than traditional building methods.

But Corrales said rising construction costs and increasing demand nationwide for pre-built homes have forced him to scrap his original plan for the modular building. Next month, workers will begin constructing the complex onsite. The project will cost about $6 million, double the initial estimate.

The Massachusetts Department of Housing and Community Development contributed about $3 million for the project. The city of Worcester and the Massachusetts Housing and Shelter Alliance also helped with financing.

At the groundbreaking on Monday, Lt. Gov. Karyn Polito said she wants other communities and housing authorities around Massachusetts to pursue similar projects for homeless people.

“Housing has to be on the forefront of everyone’s agenda,” she said. “In order to break the cycle of homelessness…we need to create more units of housing.”

Worcester officials said more housing for homeless people is planned across the city. One proposed project includes a community of tiny homes for the homeless.