A £1.7 million investment to regenerate part of Darlington could be approved by council officials next month.
Developers are hoping to secure permission for 18 family homes in the Lascelles Park area of the town.
Darlington Borough Council has received a planning application from the Home Housing Association for groupings of two, three and four-bedroom properties.
If the scheme is approved by the planning committee next month, a wheelchair-accessible home would also be provided.
Three blocks of council flats on the site would be demolished.
The planning application proposes six homes on the site of Mansfield House, seven on the site of Gayles House, in Melsonby Cresent, and five on the site of Kirby House, in Gilling Cresent.
Tenants in the council flats are being re-housed by the authority and consultation on the proposed development has been completed.
The new properties would be rented under a housing association scheme.
The development would be scheduled for completion in 2004.
Although it has yet to be approved by the planning committee, the development has already attracted support.
Councillor Paul Baldwin, cabinet member for housing, said: "We are pleased to be working with the housing association on this development, which will bring more quality, family housing to Darlington, in line with the council's housing strategy."
The housing scheme would be the latest phase of plans to improve Lascelles Park.
Earlier this year, it was announced that the area and Redhall were in line for an investment of £2m for council house repairs.
More than 300 council homes this year and 300 next year will have new bathrooms and kitchens, be rewired and have industry-standard loft insulation and uPVC windows installed.
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