North Yorkshire County Council is increasing the rent it charges on houses it owns by 7 percent.
The council owns 8,500 residential properties across the county.
Executive member for planning for growth, Councillor Simon Myers says even with the increase the council will be out of pocket.
The council says that due to inflation it is set to invest £2.2m more into the cost of running and maintaining the homes in the coming year than it would receive in rental payments.
While government rules introduced in 2012 stipulate the housing service must be self-funding, the combined surpluses the district councils have built up means the authority will be able to undertake building improvements.
The seven percent rent increase is the maximum increase allowed under government rules.
The county council's Executive member for planning for growth, Councillor Simon Myers says the increase is needed.
Councillor Simon Myers, said the formation of a unitary authority presented “great opportunities” in tackling the stubborn issue of creating a sufficient amount of affordable housing.
He said the unitary authority was looking to develop more social housing, adding:
“It is morally imperative that we bring our housing stock up to a decent standard…”
Councillor Myers said:
“We would like to build on the success of the boroughs and districts and build further accommodation for social rent.”
Councillor Myers said the authority understood the financial pressures facing council tenants, but that it had a long-term commitment to providing good quality homes and the only way to “up our game” was to charge a seven per cent increase.
Councillor Derek Bastiman, the council’s executive member for open for business, said he would “make no apologies” for ensuring residents’ right to live in a comfortable home.
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