Perth and Kinross Council (PKC) tenants will see their rent increase by an average £1.62 a week in April 2023.
Councillors rejected a Liberal Democrat attempt to go against the wishes of tenants - who narrowly voted for the lowest option of 2.2 per cent - and increase it by 2.9 per cent.
The decision was taken by Perth and Kinross Council's Housing and Social Wellbeing Committee on Wednesday, January 25.
The 2.2 per cent increase will mean an average weekly rent of £75.23 per week for council housing tenants.
PKC owns and manages 7,923 properties. The Housing Revenue Account receives rent income from houses, garages, and other properties.
In November 2022, PKC surveyed all 7,923 tenants asking them to indicate their preferred option in terms of a rent increase. Three options were put before tenants with details on what each would fund the council to do.
The three options were a rent increase of: 2.2 per cent, 2.9 per cent or 3.2 per cent. All three options would result in new and increased investment in: buying stock for repairs and improvements, service and maintenance costs, increased utility costs, contract price increases, fire sprinkler systems and continued funding for digital, financial and social inclusion.
An increase of 2.9 per cent would have supported buy back funding of £20million over five years to buy back 40 ex-council properties per year, £150,000 for planned maintenance and an additional £40,000 of
enhanced measures to tackle anti-social behaviour.
The 3.2 per cent increase would have supported buy back funding of £25 million over five years to buy back 50 ex-council properties per year,£200,000 for planned maintenance and an additional £80,000 of enhanced measures to tackle anti-social behaviour.
There was a record uptake with 20.5 per cent more tenants completing the survey than the previous year. A third of tenants - 2,625 - responded. Just over half - 51 per cent - voted for the lowest option of a 2.2 per cent increase with 49 per cent of those who responded prepared to pay more for more services.
Option Two of 2.9 per cent received 33 per cent of the vote while Option Three - a 3.2 per cent increase - got 16 per cent of the vote.
Convener Tom McEwan moved the HRA budget for 2023/24 to 2027/28 which included the rent increase of 2.2 per cent for 2023/24 for approval.
Seconding SNP councillor Jack Welch said: "This report demonstrates the housing team in Perth and Kinross are providing high quality affordable housing and property services and is actively pushing opportunities to invest and meet increasingly challenging targets."
Liberal Democrat councillor Peter Barrett tabled an amendment to increase the rent by 2.9 per cent.
He said there was a "fine balance" and "fine margins" between those that supported each option and raised concern "Option One merely stokes up more problems for the future".
He said a 2.9 per cent increase would reduce staff budget cuts and was "still affordable" with an average housing rent increase of £2.14 resulting in an average weekly rent of £75.75.
He added: "I am regularly following up constituent tenants' concerns which haven’t been addressed because of shortages in the local team."
Liberal Democrat bailie Claire McLaren seconded.
Executive director of Communities Barbara Renton reminded councillors of legal advice regarding rent setting.
She said: "The recommended rent increase presented to council reflects our tenants' views. Councillors must have regard to tenants' views and must be able to demonstrate they have done this."
Mrs Renton added: "Given we have got the highest number of tenants who have responded to our survey than ever before and that that survey has - while very close and I accept that - [shown] 51 per cent of our tenants have said they would prefer Option One."
She warned councillors voting through an option other than the one tenants voted for could be challenged and it was "very possible" PKC could have a performance failure through the Scottish housing regulator.
Only the two Liberal Democrat councillors supported the amendment with the other 13 councillors on the committee voting for the 2.2 per cent increase as recommended and voted for by tenants.
