A 90-day cap on short-term holiday letting now seems certain to be enforced in parts of the Byron Shire.

The council has been lobbying the New South Wales government to approve the strategy in a bid to expand the long-term rental market.

Mayor Michael Lyon said the council now had the go-ahead to draw up its own plan for public exhibition.

"It's pretty much a done deal now," he said.

"They've given us the ability to complete the planning proposal without any further reference to the Planning Department."

Mr Lyon said he had no doubt the 90-day cap would be approved by the council, although it would only apply in certain areas.

According to the council's website, the options being weighed for short-term and holiday accommodation are either a 90-day cap on non-hosted accommodation in the majority of the shire, or non-hosted accommodation being available year-round in certain areas.

Achieving this would require dividing the shire into two precincts, the website says.

Mr Lyon said short-term holiday letting tied up more than 20 per cent of the shire's housing stock, making it difficult for local workers to find somewhere to live.

"I don't think there's any doubt that the overwhelming majority of our community want to see some regulation of holiday letting," Mr Lyon said.

"So it will definitely go through, I think.

"It will just be where we land on which areas will be 90 days and which will be 365 days."

Businesses sceptical

Mr Lyon said the cap was unlikely to be imposed in expensive beachfront areas such as Wategos Beach and Belongil Spit.

"It's just not going to be feasible or realistic that they will provide affordable housing, and also that it is very clearly a tourist area," he said.

"Certainly places like Mullumbimby, Sunrise and Ocean Shores — these will be 90-day caps for sure."

The final plan could be approved by the council before the end of the year, but there would also be a 12-month transition period to allow property owners in affected areas to adjust to the new rules.

The president of Byron's Holiday Letting Association, John Gudgeon, does not believe the strategy will achieve its goals.

"There's no place in Byron Bay that's affordable," he said.

"I think it's a real failure of planning both at state and local level to really provide something that is practical.

"Instead what they're doing is playing around with people's property rights."

Mr Gudgeon said the rules would also be difficult to police.

"Just trying to track what's going on is going to be a total bureaucratic, logistic nightmare," he said.

A 180-day cap is already in place in other parts of NSW such as Greater Sydney, Ballina and Newcastle.