A plan to charge Warrnambool property owners a $400 fee for their short-stay accommodation has been labelled "ad hoc" and "rough".
The proposed new law - which could affect up to 100 properties - will now go out for public consultation after it was passed in a 3-2 vote of council on Monday.
Mayor Debbie Arnott said it was time for the council to "take a stand" on the issue.
But Cr Ben Blain said the local law wouldn't level the playing field between AirBnb-type operators and motels and hotels. "A rough law like this doesn't achieve what we're saying it's set out to do," he said.
The annual fee would apply to the 2022/23 financial year if it gets councillors' tick of approval when it returns to the February council meeting.
If approved, property owners who fail to comply with the new law could face penalties of up to $3600.
Cr Blain said he saw no advantage tying up council resources administering the fee.
During the meeting he sought clarification over whether the revenue raised would go to support the visitor economy or whether nearly all the money raised would go on enforcing the law - something that was pointed out in the council's own research paper.
He was told the reference in the report was old but the council was unable to put a price on how much it would cost to enforce but it was anticipated it would be low.
"We don't actually know what it's going to cost to administer which is kind of a big question mark when you are going out to consultation," Cr Blain said.
Unless it was the same across the state, the "ad hoc" local law didn't seem to address the number one issue of AirBnbs, he said.
"I hope it doesn't go out for consultation but if it does, Merry Christmas to the AirBnb owners."
Cr Vicki Jellie said it should be, like other states, administered by the Victorian government not local government with variations across many municipalities.
"I'm still not quite sure this proposal is correct. I'd be very interested in getting feedback from the community," she said.
Mayor Debbie Arnott said the short stay accommodation was largely unregulated.
She said that while it was a state government responsibility, "when is that going to happen? We don't know".
Cr Arnott questioned why AirBnbs shouldn't contribute to the promotion of the tourism sector like hotels and motels. "A $400 fee is not a great expense on the short-term accommodation providers," she said.
"I do think it's important we get started on this... it's time we take a stand on this."
Under the proposed code of conduct, the property owner must control and be responsible for the behaviour of occupants and residents at the dwelling.
Unacceptable behaviour, under the proposed changes, include aggressive behaviour, yelling, screaming, arguing, cheering, clapping and singing. Additional accommodation such as tents or caravans would not be allowed.
Use of outdoor areas including swimming pools, spas, outdoor decking and balconies would be banned between 11pm and 7am.
The local law would also require owners to provide adjoining neighbours on all boundaries and directly across the road with contact details. The council is in discussions with the Municipal Association of Victoria around uniform statewide regulation.
Crs Arnott, Akoch and Taylor voted in favour of sending the proposed law out for consultation, Cr Angie Paspaliaris was absent and Cr Richard Ziegeler declared an interest.
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