Cornwall Council will not be able to own the houses that it is building as they will be made available for market rent.
Council officers said that they would have to put the homes being built under its housing delivery programme in an arm&apos;s length company.
The details of how the homes will be managed were revealed in a briefing for councillors about the council&apos;s ambitious investment programme.
Councillors were told how the council has now incorporated its housing delivery programme (HDP) into the investment programme.
The briefing heard that the investment programme is aiming to provide good facilities for Cornwall in the form of housing, workspace and employment but also provide a financial return to the council so that it can fund frontline services in the future.
As the HDP fits in with those aims it had been decided by the council to place it into the wider investment programme.
The HDP has already started with houses already being built in Bodmin, Tolvaddon and other sites across Cornwall with more in the pipeline.
With the HDP the council is looking to build thousands of houses across Cornwall but said that these would be rented out on the open market.
Phil Mason, strategic director for economic growth and development, explained that the houses being built by the council were aimed at a particular market.
He said: "The housing delivery programme is to provide a product to compete with that is currently there in the private rental market place.
"We met a significant number of people who are existing renting in the private rental sector who were dissatisfied and unhappy with the quality and tenure of their homes.
"None of those people were citing the cost of their homes but it was the poor quality of their homes and the cost of heating and not being able to stay in one place.
"The housing development programme was trying to compete with the marketplace and it will help the quality or rented homes.
"The homes we develop will be a market rent but will be a very good quality in terms of insulation and very good quality with space.
"You (tenants) will be able to have pets and if you are a good tenant and want to stay you will be able to stay."
However, while the council is borrowing money to invest in the building of the homes it will not be able to own them once built.
Mr Mason explained: "The council can&apos;t own private houses and let them out. The intention is that they would sit in an arm&apos;s length management company."
The comments about the homes came after some councillors raised concerns about them not being affordable homes.
Andrew Mitchell, Cabinet member for housing, said: "The HDP was never purported to be an affordable led development programme. It is market housing that the council is borrowing money to invest in."
However he did point out that any development sites would still have to deliver affordable housing under planning rules so would deliver around 35% affordable homes.
Cllr Mitchell said that by putting good quality homes into the private rental sector could "show the market that they can up their game in Cornwall".