Council bosses want to flatten two blocks of flats with “serious problems” and purchase the land so 60 homes can be built on the plot.
Southern Housing told residents last year they must leave the complexes in Eaton Place, Margate as the structures were set to be demolished.
Weymouth House and Stratford House contain 78 flats and were built about 10 years ago.
But the number of tenants depleted in both buildings after the housing association did not put in new ones.
It comes after a host of issues at the homes, with claims property doors were out of line, windows had fallen out of frames and some residents were banned from using their balconies.
Meanwhile, Thanet District Council has published a report proposing to purchase the land in Eaton Road from Southern Housing, which would cost just less than £12m to deliver, hopefully with contributions from grants.
It would enable the authority to deliver about 60 rentable homes on the plot currently occupied by the two defective buildings, if planning permission is secured.
The council has negotiated an offer of £600,000 – which it says represents “excellent value” at £10,000 per plot including demolition costs.
“This falls way below the normal amounts other sites in urban areas would realise on the open market,” a report set to be considered by the Overview and Scrutiny Panel on Tuesday states.
“Given the condition of the buildings, the council is also keen to secure an agreement with Southern Housing regarding the careful demolition of the building to make the construction more cost-effective for the resultant replacement scheme.”
The council says the construction costs are not known and there are no assumptions made about grant funding at this stage.
But the report added: “While full and detailed redevelopment scheme costs would be brought to a subsequent cabinet meeting should the land approval be agreed, it is anticipated
on basic calculations, the cost of delivering a scheme of circa 60 homes would cost just less than £12 million.
“Professional fees – pre-contract design fees – are anticipated to be 5% of the construction costs, circa £600,000.
“This is subject to material and build costs, interest rates, inflationary pressures, supplier tender returns, the availability of Homes England grant and any other funds available – subject to budgetary announcements by the government.”
As of September 24 when the report was drafted, eight residents remain in the two blocks.
Deputy council leader and housing cabinet member Helen Whitehead says “creative approaches” to delivering homes are necessary to provide what is needed for residents.
The Labour councillor says the crisis tenants have faced concerning defects in these properties “has underlined a need to produce secure, long-term housing on the site”.
“We have long been supporting residents affected by this situation but we also need to work to ensure long-term affordability in Margate at the same time.
“Knowing the profound need for genuinely affordable housing in Margate, we have been in talks with Southern Housing to ensure this land is used for genuinely affordable homes.
“I am delighted our discussions led to this exceptional opportunity to utilise this brownfield site in the centre of town for new properties to support residents in housing need and temporary accommodation, and to produce double the previous affordable housing on-site.”
Last year, allegations emerged of a divide between how the tenants of the two blocks were treated.
Social housing tenants occupied Stratford House, who were told they would be rehoused.
Residents were told they would receive up to £8,100 compensation, plus help with moving and buying new uniforms for their children if they had to change schools.
Tenants at Weymouth House pay a market rent and have a short-term tenancy agreement. They were told to find replacement homes and would receive only £1,000 compensation.
Southern Housing said last year “significant structure and fire safety repairs” were needed to both blocks and closed the buildings for safety reasons.
“The costs and technical complexity of repairs needed made these buildings unviable,” a spokesman said at the time.
The acquisition is subject to approval and the cabinet will be asked to green-light the recommendations when they meet on October 24.
