Fort McMurray is considering a proposal that would have temporary work camps built inside the Alberta city to accommodate an influx of workers created by a construction boom.

Construction firms say temporary accommodation is needed to prevent a labour shortage that would slow the pace of construction.

But people and businesses with longtime roots in the city of 56,000 oppose the creation of temporary housing near the downtown core. They worry it could increase crime.

"When you have a camp of 200 guys who are away from home and they are within walking distance to the bar and the casino, there is a potential for increased activity," says Mike Allen, president of the Fort McMurray Chamber of Commerce.

Housing in the northern Alberta community has been in short supply since Suncor announced five years ago it would expand its oilsands development. The project was expected to create up to 4,000 new jobs at its peak.

The rental vacancy rate is less than one per cent.

In December, Canada Mortgage and Housing Corp. reported that rents in Fort McMurray were the highest in Canada, up 20 per cent over 2004. A two-bedroom apartment rents for an average of $1,478 a month.

The city itself has taken steps to help employees find accommodations. Earlier this month, councillors voted to double the cost-of-living allowance for permanent employees to $200 per biweekly pay.

Council also voted to give its workers a series of housing breaks, including a one-time grant of $5,000 per employee to help with a first-month rental payment and damage deposit.

Allen says small-business owners are worried temporary housing would make it easier for out-of-town companies to take work from Fort McMurray contractors that have been there from the beginning.

He says he might be more in favour of the proposal if the housing were to be built outside the city.

But city officials who support the proposal say problems will pop up regardless of where temporary housing is built, and that the basic problem of the housing shortage must be solved.

"Whether it's five miles out of town or right downtown, you are still going to have traffic and the issues," said city Coun. Renee Rebus.

"I'm hoping that it is going to create more building, more opportunity for builders to come in so we can at least hopefully catch up with the infrastructure – not only municipal infrastructure, but there is also the housing issue," says Rebus.

City council was scheduled to vote on the issue Tuesday night.