The council owns 90 units in Palmerston, Hampden and Oamaru. Weekly rents range from $70 for a bedsit to $118 for a two-bedroom unit.
Last year, rents increased 7.65%. This year, the rises will be between 5% and 15%, depending on the unit.
However, some tenants qualify for accommodation supplements from Work and Income New Zealand to help pay rent, and that number is expected to rise with the rent increases.
Age Concern helps the council liaise with its community housing tenants, visiting them every three months. The social worker will assist with the introduction of the rent increases, advising tenants on what assistance was available.
Details of the rent increases are in a report going to the council's committee of the whole meeting on Tuesday.
The increases do not need the approval of the committee or the council, but are approved by chief executive Michael Ross under delegated authority.
Since 2009 the council has attempted to have the community housing units pay for themselves, rather than being subsidised by other ratepayers, including superannuitants living in their own homes.
Community housing had a deficit of about $200,000 in 2009, which is being reduced out of rates. At the end of June this year, the deficit will be about $80,000.
The council intends charging rents at 80% of market value and between 25% to 30% of the gross superannuation single benefit.
At present, rents are between 66% and 75% of market rental and about of 22.5% of superannuation.
Property officer Renee Fisher-Hewitt said more residents were expected to be eligible for an accommodation supplement with the rent increases.
Tenants who qualified for the supplement would pay an increase of between $5 to $7 out of their own pockets, the remainder being made up by the supplement, Ms Fisher-Hewitt said.
Increasing rents would reduce the need to subsidise community housing through rates, in line with council policy, and offset escalations in costs.
Rental income from the units would increase from $393,000 a year to $419,000 if all units were occupied, she said.
It would move rents closer to 80% of market rates while still remaining affordable by aiming for 25% to 30% of the gross superannuation benefit, which had increased on April 1 from $389 to $400 for a single person living alone.
Landlords were required to notify tenants 60 days before any rent increase. Council tenants were being notified over the coming week, she said.
