REDLAND City Council has refused a development application to turn a Capalaba house into what is known as "rooming accommodation''.
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Under the application, tenants for four bedrooms would enter into individual lease agreements, with a maximum of five people living onsite at any one time.
The refusal risks the council being involved in legal action.
A report to council says the suburban house is not markedly different to others in the street.
The DA was received after a show cause notice was issued when it was found the proposed use was already occurring without lawful approval.
Each room is to have an ensuite, with a communal kitchen and dining area.
Councillors rejected staff recommendations that the application be approved.
Officers told councillors that the city plan did not define "rooming accommodation'' so a Brisbane City Council planning document was used to guide recommendations.
Cr Paul Gleeson said the proposal was essentially a four-unit complex.
He said Brisbane's rooming accommodation was to cater for university students so they could have affordable housing close to campuses.
The Redlands did not have such an issue and, even if it did, such accommodation was not something that would be put in a back street but rather near a transport hub.
"This is a scourge in our planning scheme,'' he said. "It would be a terrible outcome. If you think the community has been loud over small lot housing, you wait for this to open up.''
Cr Paul Bishop said the issue was another disruptor like Airbnb and Uber and the council had to be careful not to impact on investors' rights.
Cr Golle said if it was approved, it would create a dangerous precedent.
"I'm happy to test this through legal channels to see what a magistrate says,'' he said.
Council officers warned the matter could eventually end up in court and that the development had to be rejected on planning grounds which would stand legal scrutiny.
They also warned that refusing an application in such a way would ultimately see RCC control of the project lessened because a court would decide on the matter.
Cr Lance Hewlett said if the DA was approved it would create an imbalance whereby someone building four units would pay infrastructure charges of $80,000 while an applicant for this type of project would pay nothing.
