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The City of Edinburgh Council has formally declared a housing emergency.
The council's housing convener Jane Meagher has tabled a motion highlighting a "crisis" in both the public and private sectors.
It cites the city's record homelessness figures along with a severe shortage of social rented homes and spiralling private rental costs.
The Scottish government is being urged to provide extra resources to help meet the "severe challenges".
Housing Minister Paul McLennan has said "tackling homelessness is a key priority" for the government.
Edinburgh is the first city council in Scotland to formally declare a housing emergency.
The only previous local authority to do so was Argyll and Bute in June.
Council figures show approximately 5,000 households in the capital are in temporary accommodation, the highest number in Scotland.
The city also has the highest rental inflation rate in the UK at 13.7%.
Meanwhile, the council - which is run by a minority Labour administration - said about 200 bids are made for each social rented home that becomes available.
'Broken system'
The charity Shelter Scotland, which has been campaigning for a housing emergency to be declared, said the move would be "an important moment for the fight against housing injustice in Edinburgh".
The charity's director Alison Watson said: "Councillors have an opportunity to show residents they understand that out-of-control rents are making it impossible for many to stay here, that homelessness is devastating lives across the capital, and that they're determined to do all they can to fix a broken and biased housing system.
"We know there are things beyond the council's control, we understand that both the Scottish and UK governments can and must do more, but things can't go on as they are. Business as usual isn't working and all levels of government must respond."
Ms Watson warned the declaration "can't be the end of the story; it must be the start".
She added: "Shelter Scotland is ready and willing to work with the council and other stakeholders to prepare an action plan following the declaration."
Mr McLennan said the Scottish government was making available £3.5bn over this parliamentary term to support delivery of 110,000 affordable homes by 2032, with 70% of those for social rent.
He added: "This includes investing at least £60m to help local authorities and registered social landlords acquire properties for use as high quality, affordable, permanent homes.
"Rapid Rehousing Transition Plans play an important role in Scotland's homelessness strategy and aim to reduce the need for temporary accommodation.
"We have provided local authorities with £52.5m between 2018-24 for their plans to support people into settled accommodation."