The motion to introduce the new local laws was passed in a 4-1 vote at the ordinary council meeting after mayor Debbie Arnott declared it was time the council took the lead on the issue.

Cr Ben Blain opposed the move while Crs Vicki Jellie and Richard Ziegeler declared a conflict of interest and did not vote.

Cr Blain questioned the cost of enforcing the new laws and said it would be an additional administrative burden on the council and ratepayers. "This isn't a step forward," he said.

Cr Blain said the new laws showed the council had not done enough to advocate for state legislation. "This is our failure, not the state," he said.

Cr Blain said it would not create equality or address the housing shortage in Warrnambool but Cr Arnott said it was not designed to alleviate the rental shortage.

Cr Arnott said the council needed to help level the playing field between traditional accommodation providers and short-stay holiday rentals. "Short-stay accommodation is largely unregulated," Cr Arnott said.

"These accommodation providers are basically running a business off the back of traditional accommodation owners, they make good money."

She said the $400 equated to about two nights' accommodation, and owners needed to be held accountable for the behaviour of their guests.

Cr Arnott said it may initially cost a little more time and effort to get the register up and running but after that it "should not be difficult".

She said different bodies had approached the government about the issue, and AirBnb-style accommodation should be required to have certain safety standards. "It's time we took a lead on this," she said.

Cr Arnott said it was designed to regulate the industry and get owners to contribute to the visitor economy like traditional owners who paid commercial rates

Cr Max Taylor said the new laws and fee were the most appropriate method to resolve the issue but he would have preferred the state government to step up.

He said there was a lack of action at state level where it did not seem to be a legislative priority. Cr Taylor said the annual fee would also be a tax deductible expense for those declaring income off short-term accommodation.

Cr Angie Paspaliaris described the move as "reasonable" and "appropriate".

"Owners using their properties as short-term accommodation are generally reaping... commercial-like returns, so I believe those owners can pay their fair share," she said.

The new fee would generate $20,000 a year in revenue for the city council.

Plans to bring in a $400 charge and new local laws to govern holiday rentals were first mooted in 2021 but were dumped after the proposal sparked backlash in the wake of the pandemic lockdowns.

It was revived in the council's budget for the 2022-23 year and in December, a draft of the short-stay accommodation law was released for public feedback.

The council received 14 submissions to its plan with some wanting the fee to be adjusted depending on the size of the rental property.

Another said short-stay accommodation was impacting the amount of long-term rental properties which were having a profound effect on businesses trying to fill job vacancies.

"The impact of local families having to relocate elsewhere as they face the situation of being homeless is causing a further drain on skilled workers for out town and region," they said.

One submission called for the council to stop intervening in the free market.

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