Queenstown's council is not ruling out regulating residential boarding houses, but for now is focused on ''addressing the cause of the disease ... rather than the symptoms''.
Queenstown Lakes District Council district plan manager Matthew Paetz said under the proposed district plan the council was trying to enable more housing and more density in residential areas and around town centres, as well as introducing a ''business mixed-use zone''.
''There's a massive problem in terms of the mismatch between demand and supply, especially with the rental housing market.''
The high demand coupled with a lack of supply had seen an increase in rental prices - which was leading to overcrowding and the creation of residential boarding houses, which did not require consent.
Mr Paetz said Trade Me data showed median rents across the district had increased by almost 32% in two years.
The median rent, district-wide, in 2013 was $380. This year it was $500.
''It's pretty significant in percentage terms, it's pretty high.
''That's across the district, so I wouldn't be surprised if there are some parts in central Queenstown that have increased more in percentage terms than that, as well.''
Mr Paetz said by increasing the housing supply the council hoped to ''address the overcrowding issue in some form''.
Last week council property services manager Peter Laurenson said provided a property was not unsafe or unsanitary it could be run as a residential boarding house - for example, a Fernhill property housing up to 20 tenants.
Mr Laurenson said, provided all tenants were aware it was a boarding house, they all had a copy of the agreement identifying which room was theirs and they knew who the other tenants were, from a building perspective there were no other requirements.
However, if a property owner wanted to rent their property for ''short-term'' accommodation to fee-paying guests for up to 90 days a year, they might need to register as visitor accommodation or obtain resource consent, potentially resulting in increased rates.
Mr Paetz said at this stage the council had no plans to consider regulating residential boarding houses in the same way.
''At the heart of this problem is a lack of supply and anyone who's tried to rent in this town - including myself - will know that it's ... costly and availability is very poor.
''A natural outcome of that is that you'll get overcrowding.
''So, we're trying to address the issue by addressing the cause of the issue.
''We're not saying we won't consider potential regulation [of residential boarding houses] but we also need to be cognisant of unintended consequences.
''For example, if we start to clamp down on boarding house development, where are people going to live?''Submissions on the proposed district plan close on October 23.
Hearings were tentatively scheduled between February and July next year and decisions were expected in the second half of 2016, Mr Paetz said.
