Health services and other resources are already under pressure in Coventry, the council saysA council has taken planning enforcement action to prevent the government from housing more than 100 extra asylum seekers in Coventry.
Coventry City Council said it was a "last resort" to stop contractor Serco turning property there into a hostel.
It added a new hostel would pressurise "already over-stretched" resources, saying Serco was running three in the city as things stood.
The government said the public expected it to cut asylum seekers' hotel costs.
As turning the site into a hostel would require a formal change of use under planning guidelines, the local authority has used a planning notice to challenge the move, preventing Serco from placing people there for an initial 28 days.
The council said it was proud of Coventry's history as a city of sanctuary, which was open and diverse, but it feared the new asylum seekers would not get the support they needed.
"I cannot stress enough that the issue we have is not with the people that would be placed [here], many of whom are fleeing terrible circumstances that we can barely imagine," said David Welsh, cabinet member for housing and communities.
"Our issue is with the unfair Home Office system that sees cities like Coventry take far more than our share; placing added pressure on an already overstretched local support system with no recurring funding to help pay for it."
Mr Welsh said specialist health services in the city were already struggling to manage the demand from people in existing hostels.
He added the attempt to launch a fourth was taken without council consultation, and it was unclear how long the venture was for and what support services, if any, were available.
Last year, Coventry was among West Midlands councils that sought a judicial review against the Home Office over its dispersal policy. It was withdrawn following a new policy approach by the government.
A government spokesperson said on Monday: "The number of people arriving in the UK who require accommodation has reached record levels due to the unacceptable rise in small boat arrivals and our commitment to accommodate those from Afghanistan.
"Every day the hotel bill for accommodating more than 45,500 asylum seekers and over 9,200 Afghans is £6.8m and the British public rightly expect that we reduce these costs as quickly as possible.
"We therefore continue to look at all available options to source appropriate and cost-effective temporary accommodation."