diff --git a/setup/server.py b/setup/server.py
index 0bb25a51..b2ca2175 100644
--- a/setup/server.py
+++ b/setup/server.py
@@ -91,7 +91,7 @@ def build_app(path):
         data = flask.request.form.copy()
         data['uid'] = str(uuid.uuid4())
         try:
-            data['dns'] = str(ipaddress.IPv4Network(data['subnet'])[-2])
+            data['dns'] = str(ipaddress.IPv4Network(data['subnet'], strict=False)[-2])
         except ValueError as err:
             return "Error while generating files: " + str(err)
         db.set(data['uid'], json.dumps(data))
diff --git a/towncrier/newsfragments/1083.bugfix b/towncrier/newsfragments/1083.bugfix
new file mode 100644
index 00000000..3fa17d9a
--- /dev/null
+++ b/towncrier/newsfragments/1083.bugfix
@@ -0,0 +1 @@
+Allow subnet with host bit set in setup