Sunderland Housing Group (SHG) said it has built 111 houses since it took over the council housing stock in March 2001 – 18 of which have been sold.
Politicians have called for an investigation into why SHG is investing £42million in private developments, while more than 19,000 people are on the waiting list for rented homes.
And today, Sunderland Council announced that cabinet members will be asked to agree to a review of housing renewal plans for the city at a meeting tomorrow.
When SHG took over, 3,500 homes were earmarked to be demolished over 10 years – figures which were agreed with the Government.
But SHG increased that to 6,000 – controversially including many privately-owned homes which had been purchased under the council's right to buy scheme.
As of today, the housing group has sold 4,500 homes under "right to buy" schemes, have demolished 901 – and emptied 800 for demolition.
It plans to build 4,000 to replace them over the next three years.
Tenants now have a legal right to buy their property, which is out of the control of SHG.
Housing bosses defended themselves today, saying they were not obliged to build any new homes when they took over stock. But despite that, they launched a five-year renewal scheme to build 4,000 in April 2003.
John Craggs, strategic executive for SHG, said: "We have said we would demolish 6,000 homes and build 4,000. We have said we would build 4,000 homes in five years.
"It is an important point that the new homes are to be built in the five years from when finance was secured for the Pathway Homes developments. This agreement was in 2003.
"At the point of transfer the replacement of demolished homes was not on the agenda. Renewal as a concept in Sunderland did not exist, and was not thought of until 2002."
Politicians claim too many homes have been demolished, emptied or sold to former tenants too quickly – which has added to the housing crisis.
In the meantime, 19,000 people are left on waiting lists to rent a home – 14,000 more than at the time of stock transfer.
But SHG has seen the successful completion of private developments. It has already completed The Athenaeum and Maritime Buildings and is on target to complete the Post Office, Customs House and Hammerton Hall by the end of April.
Sunderland councillor Bryn Sidaway said he thought the comparison between the number of properties to rent and private developments was "disgraceful".
He added: "SHG has to accept the lion share of the blame for the massive waiting lists for affordable rented accommodation in the city."
Emperor Property Management, SHG's private development company, is also working to convert the Water Board buildings, the Mowbray Park Hotel, Foyle Street, Central Buildings, 40 West Sunniside, The Esplanade and the second phase of the River Quarter, which is being taken as a joint venture with another private development company.
Mr Craggs added: "It has been well documented that it has been a long-standing strategic objective of the City of Sunderland Council to regenerate the heart of Sunderland.
"Sunderland has a limited number of quality old buildings and SHG's £42million investment will help the city to achieve that objective."
SHG says all profits made by Emperor will be put back into social housing. However, all losses made by the company would also have to be covered from social housing funds.
But Tyne and Wear Euro MP Martin Callanan called for a full investigation into SHG.
He said: "What a housing group is doing investing £42million in private developments when 19,000 people are waiting for homes I just don't know.
"There should be a full investigation into the financial dealings of the housing group."
On behalf of the Office of the Deputy Prime Minister (ODPM) the Housing Corporation is currently reviewing several allegations made against SHG.
The council will be carrying out a review in response to changing housing needs in the city.
In a joint statement, the council and the housing group said: "The review will cover all housing renewal issues, including the proposed demolition of 6,000 unsustainable homes and the building of 4,000 new, high-quality homes for rent and sale.
"The net loss of 2,000 homes is 1,500 homes less than would have been demolished under the original plan at the time of stock transfer.
"Sunderland City Council holds strategic responsibility for the provision of housing in Sunderland and works with a number of developers and organisations, including Sunderland Housing Group, to help it to achieve its aims."


* Big rise in demand for homes

THE Echo revealed that Sunderland is in the grip of a housing crisis, with more than 19,000 people on the waiting list – and just 2,800 houses becoming available each year.
One house in South Hylton Green had more than 450 applications.
Figures showed that the number of people waiting for homes had risen from 5,100 before council housing stock was transfered to Sunderland Housing Group in March 2001 to 19,137 today – but fewer properties are becoming available.
Housing group strategic executive John Craggs said: "There are not enough homes to rent because people who once lived in rented accommodation before moving on and buying their own home are priced out of the market and more people in general are looking to rent rather than buy."
The Government yesterday announced a multi-million-pound strategy to reduce homelessness – with a pledge to reduce the number of people living in temporary accommodation by half by 2010.


* Family forced to stay in guest house




YOUNG mum Victoria Morrison has been forced to live in a bed and breakfast because she is one of the thousands waiting to be rehoused.
Single mum Victoria, 27, is in the final year of a degree course at university and is trying to raise her two daughters, Paige Gallagher, nine, and Grace Morrison, four.
She says she was forced to flee her home in North Tyneside after she was hounded out by a nightmare neighbour.
She applied to Sunderland Housing Group for a home under the choice-based letting scheme.
She was nominated for "excellent" customer status by a member of the safer estates task force – but she has still been without a home since January 16.
She and her daughters have been sleeping on the floors of friend's homes.
She was accepted as homeless by the Sunderland Housing Group, but is still nowhere near finding a home.
As a student she cannot afford to rent privately and is currently being housed in a guest house in Roker.
Her four-day stay ends today. The £180 bill is being picked up by the housing group.
Victoria says she has written to MPs, councillors and the housing group but feels her pleas are being ignored.
Julie Kelly, head of policy and special projects at Sunderland Housing Group, said: "Ms Morrison presented herself as homeless in January and was assessed and accepted on to the homeless register.
"No suitable properties have been available to date.
"We will continue trying to help her resolve her situation. However, there are no vacancies in the areas she has indicated she would like to live."