The Tories say tenants are often best placed to bring about improvements
The Tories say they would give council house tenants "unprecedented" power to improve their neighbourhoods, if they win power at the next election.
Scrapping targets and giving residents control of improvement schemes could bring dramatic progress, shadow housing minister Grant Shapps said.
A cleaned-up neighbourhood was as vital to tackling crime and health problems as decent homes, he said.
Labour said it had given tenants the powers and money to make improvements.
Quality of life
More than £33bn has been spent on upgrading social housing since 1997, 60% of it government money, to ensure it meets acceptable standards for warmth, insulation and facilities.
In a speech in London, Mr Shapps acknowledged that under Labour many of the UK's council estates had been transformed by innovative design improvements.
However, he said the focus on the internal design and contents of houses, driven by government targets, had meant the quality of life in surrounding areas had often been neglected.
As a consequence, many estates were plagued by anti-social behaviour and an intimidating atmosphere, he said.
"Unfortunately, this rather blunt, target-oriented approach directed by Whitehall hasn't taken account of what really matters to people on the ground.
"A new front door won't improve life for families who are too afraid to walk out of it. And a new fitted bathroom is not going to clean up the local neighbourhood."
The Tories are promising to give council tenants new powers to shape their neighbourhoods according to their own needs, rather than relying on remote planning decisions.
A future Tory government would encourage partnerships between residents' groups, councils and housing associations to ensure tenants had a voice in regeneration decisions from the start and could access funds for improvements themselves, Mr Shapps said.
These could involve the better use of existing housing units or, in some cases, the demolition of buildings.
He cited the example of a council estate in Powys which had been "turned around" by the efforts of local residents in cleaning up living spaces and tackling social problems head-on.
"Residents should have a greater role in determining the nature and speed of regeneration," he told the BBC.
"It is about putting power back in the hands of people for whom the community, or lack of it, is everything."
Ministers said the quality of housing was essential to the reputation of an area and the living standards of residents.
They said the number of council houses which fail to meet acceptable standards had halved since 2001 - a million homes having been modernised - with 95% of accommodation expected to make the grade by next year.
"It is quite right local communities themselves, not central government, set their own long term vision, joining up regeneration plans for new jobs, homes, transport and other investment," a spokesman for the Department of Communities and Local Government said.
"Since 1997 this government has given them the powers and funding to do just that."