OSHAWA -- The Supreme Court of Canada's dismissal of a challenge to Oshawa's regulations governing student housing should spark creation of appropriate accommodation, City officials say.

But the president of the student association at Durham College/University of Ontario Institute of Technology says council's stance on the issue could create a housing crisis in Oshawa.

"This is not a student issue," Amy England said Friday. "This is a human issue."

On Thursday, the Supreme Court dismissed an appeal of lower court decisions upholding Oshawa's zoning bylaws, which prohibit commercial lodging houses in residential areas. The Supreme Court also rejected an application from the Ontario Human Rights Commission seeking intervener status in the proceedings.

The appeal stems from a finding by Superior Court Justice Peter Howden in the summer of 2008 that roughly three dozen houses in subdivisions surrounding the DC/UOIT campus can be classified as commercial lodging houses, and therefore contravene City bylaws.

The landlords contended their properties are single dwellings for groups of tenants, much like typical family homes.

"This decision will act as a deterrent for lodging houses in the neighbourhood and it will encourage quality, purpose-built housing," City Councillor Louise Parkes said in a statement. "This finally gives some clear directions and allows us to all move forward together."

City politicians have said repeatedly as the debate has raged they're not trying to eliminate student housing in residential areas surrounding the campus, but have cited a duty to uphold Oshawa's bylaws and protect the integrity of residential neighbourhoods. Oshawa has implemented a licensing program for potential student homes that involves applications by landlords and inspections by City staff.

Applications for just 166 of the estimated 350 properties providing housing to students have been filed, but it's hoped more will be processed now that appeals of the bylaw have been exhausted, said Jerry Conlin, Oshawa's director of municipal law enforcement and licensing.

"I think you may see an increase in that now that the court decision has been (finalized)," he said.

Mr. Conlin said the ruling doesn't signify a move to eliminate student housing in residential areas but does crack down on "monster" multi-resident properties.

"The (court) decision doesn't eliminate rental rooms," he said.

Paul Vrama, president of a homeowners' association in the area and a landlord himself, said landlords don't oppose licensing; the problem is the City is moving exceedingly slowly on application approvals.

"They haven't issued a single licence," he said. "I think licensing, once it gets going, can solve a lot of the problems. But not all of them."

He said it's not likely student housing will be eradicated in neighborhoods surrounding the Simcoe Street North campus.

"It depends on the City's interpretation of the law and what it means," Mr. Vrama said. "If you assume this is an affirmation of a law that's already out there, nothing has changed.

"The problem is, the City's doing nothing," he said.

A heavy-handed approach to the issue would see students tossed out of safe, stable housing and into Oshawa's lower-end apartments, displacing other renters, Ms. England fears.

"I think the City needs to look at the ramifications of dispersing 2,000 people into the city," she said.

"That's the next question for the City: Where do you expect them to live?"