Approval will need to be given by the council's cabinet at its meeting next Monday (June 21), but it is hoped the Housing Revenue Account (HRA) - which records expenditure and income on running a council’s own housing stock - will relaunch next April.
Peterborough Council is among many local authorities seeking to relaunch its HRA to unlock new funding and investment. It comes after the government changed legislation and relaxed previous restrictions which made it difficult for councils to build new homes.
By building and acquiring its own rental housing stock, the council aims to reduce homelessness and further reduce numbers in temporary accommodation in the city while also increasing the amount of good quality affordable houses for residents.
In the past year, the housing team has reduced its reliance on temporary accommodation from 416 households to 298, and its rough sleeper count has reduced from 37 to six.
The council's previous housing stock was sold to Cross Keys Homes in 2004/05 because it could not afford the investment needed to improve the stock to the required standard.
At the time, incentives were offered by government that encouraged councils to transfer their stock. Around 81% of tenants supported the decision at the time, as they were able to access improvements as part of the transfer deal.
Steve Allen, cabinet member for housing at Peterborough Council, said: "Providing new council housing will complement the work of our housing association partners in increasing the number of homes available for residents in greatest housing need.
"We will bring a fresh approach to delivering affordable housing by engaging with local people and stakeholders at the earliest opportunity.
"The homes we intend to build will be low carbon and energy efficient, fitting in with the council’s goal to become carbon zero by 2030. This also has the added benefit of cheaper running costs for tenants."