The ACT Greens have released a bill to freeze rents in the territory for two years but Chief Minister Andrew Barr has already ruled out the measure.
This could result in a split in the territory government's cabinet but the Greens are remaining hopeful they can convince Labor to support the bill.
Greens backbencher Johnathan Davis released the draft bill on Friday and has been backed by his party colleagues, including Greens Leader and ACT Attorney-General Shane Rattenbury.
Under the bill, a landlord would be barred from raising rents in the territory for two years and once that period is over rents could only rise by 2 per cent per year.
"We are very hopeful that a freeze of rents will actually give tenants a reprieve [and] will actually give tenants a break," Mr Davis said.
But the move will potentially set up a fierce political fight between the Greens and Labor.
Labor won't support a rent freeze but will consider other elements of the legislation.
Mr Barr said recent data had shown rents were falling in the territory and vacancy rates were increasing. He said the government was focused on increasing supply to the market.
"Given rents are falling and we are working to increase supply, we are not supportive of the rent freezes proposed in the draft legislation," Mr Barr said.
"Appropriate prescribed rent caps combined with no-cause eviction protections - as currently formulated in the ACT - strike the balance of ensuring property maintenance, encouraging further investment and avoiding excessive rent increases. Rent freezes will put that at risk."
Mr Rattenbury, as Attorney-General, is the minister responsible for implementing rental laws in the territory. He said the Greens would bring forward the bill as part of the cabinet process.
"I think there are some elements of this the Labor party has expressed reservations about but there are other are elements we hope to be able to convince them," he said.
"We think these are effective measures. The experience we've seen overseas is that a rent freeze and a sustainable rent cap can make a real difference for the lives of those people who are renting.
"I will be seeking to negotiate with [Labor] on this bill. I will be urging them to get behind this."
The rent freeze bill will not be supported by the Canberra Liberals.
"This is pure unadulterated political grandstanding from the Greens," opposition housing spokesman Mark Parton said.
"Mr Davis knows full well a rent freeze would force more landlords out of the market immediately, but more importantly, disincentivise future property investment which would greatly impact future supply."
The federal Greens have been campaigning for a nationwide rent freeze as part of its negotiations around Labor's Housing Australia Future Fund. The Greens have so far refused to back the fund and a rent freeze is a key demand.
Prime Minister Anthony Albanese announced on Friday the bill will be re-introduced to Parliament next week which could trigger the potential for a double dissolution election.
Mr Davis' bill has been released for public comment but there is no timeline on when the bill will be introduced to the Legislative Assembly.
Mr Davis acknowledged rents could be frozen at the peak of the market but said tenants would be able to attain a lower value if the market dictated that.
"We would be freezing rents at their high peak, obviously if market trends dictate that tenants can get a more competitive rate on their rent then we would absolutely welcome that," he said.
"But the challenge here is that fundamentally leaving the price of rent and leaving people's access to safe, secure and affordable homes completely up to the free market, that is continuing to fail Canberrans, Australians and anyone living in this capitalist hellscape."
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