Councillors debated both the urgency of the issue and the feasibility for the local government to intervene in the private sector.

"I believe this motion wants us to dedicate council resources to a problem that is not ours to solve," Cr Mark Rodda said.

"I believe we need to stay in our own lane and work on things within council's remit, as many people would say to me: roads, rubbish, rates, parks and gardens, kerb and guttering, footpaths, and pools."

The motion was brought forward by deputy mayor Judy Coates during Tuesday night's council meeting and met with decisive opposition from a few of her fellow councillors.

Cr Coates asked councillors to hold a workshop "as a matter of urgency" to discuss what council can do to avoid an "impending accommodation shortage" from a large number of hotel/motel rooms being booked out for the next 12-18 months by temporary workers in the construction industry.

Her argument is this will have negative knock-on effects for the rest of Tamworth's tourism - plus exacerbate the region's housing shortage - but her colleagues were not persuaded.

Cr Rodda was adamant in his position that any potential shortage of hotel/motel rooms should be left for the hospitality sector to solve itself.

"[This motion] wants to use council resources to somehow smooth out the supply and demand of accommodation like some form of top-down command economy politburo," he said.

He said council should instead focus on fixing chronic staff shortages in its planning department and find ways to tackle the unfair influence of "giant, foreign-owned multinationals like Airbnb".

"I think the best thing council can do to alleviate the housing crisis is as expediently as possible, approve more land to be developed as it comes before us and fill our shortage of planning staff," he said.

"I know of other councils that have made policies to effectively double the rates of homes and units that are providing short-term accommodation-style services in their LGAs ... I would be willing to support a completely separate motion at the next council meeting to investigate the practical and legal aspects of such a policy."

Cr Rodda's points were supported by councilloers Helen Tickle and Brooke Southwell, while Cr Coates was backed by Crs Phil Betts and Bede Burke.

With Crs Marc Sutherland and Steve Mears unable to attend the meeting, mayor Russell Webb was left to cast the deciding vote.

Cr Webb told the Leader his decision was straightforward.

"Council can't really do much at all in terms of the private providers," he said.

"What we can do is encourage more private providers to come into our region."

He also said Tamworth Regional Council is already working on many of the problems Cr Coates identified in her motion, including social and affordable housing.

The mayor then threw blame on renewable energy projects for council's growing backlog of planning applications.

"We are short of staff, but one of the challenges we face is the fact that all these renewable energy proponents come to Tamworth with their proposals, and our staff have to spend hundreds of hours on them," Cr Webb said.

He pointed to the Hills of Gold project in Nundle as an example, which he says has had "five or six different iterations" since 2019, taking "hundreds and hundreds of hours" for council staff to assess and review.

Specific to short-term rentals, Cr Webb said there are also a few projects on hold - including three expressions of interest to develop land near Tamworth airport - until the council's new housing strategy is developed.

Local hospitality mogul Jye Segboer says council made the right decision.

"I think it's certainly something the private sector will look after itself. If occupancy and demand in the city runs higher than its current 65 per cent, then more developers will want to work in that space," Mr Segboer said.

"Council should really be focusing on how it can improve its ongoing services to the community to ensure we don't have any large rate increases, rather than delving into something that is traditionally looked after by the private sector."