The owners of private cabins in the park say the council-owned cabins are falling into disrepair, but the council says it rents out only the inhabitable cabins.
"Many of the cabins were families' pride and joy and were a beautiful addition to Queenstown. Since they were bought by the council, many have fallen into a shameful state. I consider the council as a slumlord," private cabin owner Tony Ganley said.
Mayor Clive Geddes said he was not of the impression the cabins were in such a state.
"I have not been made aware of the cabins being in a serious condition. If anyone is concerned about the state of council-owned rental properties, they should address the council directly," he said.
The Queenstown Lakes District Council-owned cabins are managed by Lakes Property Services, where managing director Joanne Conroy said only the cabins in a `suitable condition' were being rented out.
"Some of the cabins have been taken out of the rental pool, as they are no longer suitable to live in, or because they lack full bathroom facilities. The rest are in varying conditions, but acceptable to live in. While they are some of the cheapest rental options in town, renting for about $150-$250 per week, you should, of course, not expect more than you pay for.
"We have an ongoing upgrade programme for the cabins, and renovate about 10 cabins every year. But it usually only involves the basics, like new paint and carpets. We would rarely add insulation," Ms Conroy said.
The council owns 77 cabins in the area, of which most are rented out through Executive Accommodation.
The majority of the cabins around the current camping facilities at the holiday park - along with the most of those in the area known as the Lynch Block, accessed off Glasgow St and Earnslaw St - are privately owned on leasehold land.
All leases run until 2015.
Mr Geddes said it was the council's intention to develop the "valuable" land.
"An enormous amount of discussion and project work for this prime site has been done over the past decade. The council was about to enter a joint venture property development, but as the property market collapsed, the plans were shelved until the market becomes stable again. But it is still my hope we will be able to look at those plans again before 2015," he said.
