Lord Mayor Adrian Schrinner revealed rate increases of at least $38 a year and up to $200 a year in some suburbs for next financial year but insisted the city’s residents still “get more and pay less” than other south-east Queensland councils.

The average 4.93 per cent rate increase – the highest in 12 years  – will help pay for a $4 billion budget dominated by a $500 million “rebuild and recovery” program following the devastating February floods that affected 23,000 homes.

“Brisbane already has the cheapest rates in south east Queensland thanks to our years of financial management,” Schrinner said.

He insisted the rate rise was below Brisbane’s inflation rate of 6 per cent and far below recent land valuation increases.

Describing the budget as about flood recovery and housing affordability, he also revealed a council crackdown on Airbnb operators with plans to slug them 50 per cent on top of their rates bill unless they release their homes into the long term rental market.

The council also plans to revive the urban renewal focus of previous administrations and try to repeat the success stories of rejuvenated areas such as New Farm and Newstead in other suburbs.

The plan may see areas that were once used for car yards and warehousing turned into apartment and townhouse developments to increase housing supply in the city.

Other flood recovery spending items in the budget include a doubling of the drainage expenditure to $131 million over the next three years, and nearly $60 million to repair bikeways, much of its spent on the Kedron Brook route that suffered some of the worst damage in February’s deluge.

The council last months opted to freeze or cancel a number of planned infrastructure projects as a means of getting costs under control but is going ahead with its Brisbane Metro transit project and two nw green bridges at Kangaroo Point and Breakfast Creek.

Sensitive to some criticism that the council is too focussed on the CBD, Schrinner pledged that at least 80 percent of spending would be on city suburbs.

The most controversial measure in the budget was aimed at property investors leasing out their houses as “mini-hotels” on Airbnb and other platforms, warning them of “significantly higher rates” if they continued to ignore long-term renters.

Schrinner said the change – which will begin on July 1 taking the form of a 50 per cent premium on top of the general rates rise – was a means of tackling housing affordability and easing a dramatic rental squeeze in Brisbane.

He said those using their properties for short-term accommodation would be encouraged to “self-identify” but the council is also encouraging neighbours to report house owners they suspect are making money on Airbnb.

“We’re going to give landlords who’ve turned homes into mini hotels using websites like Airbnb and Stayz a choice between returning these properties to the long-term rental market or face significantly higher rates,” Schrinner said on social media before delivering the Budget.

Later he said: “It is my hope that instead of paying extra, many owners will return these houses and apartments to the long-term rental market which will help ease the housing shortage.”

“If owners have these properties in the market for a short term, that is their choice, but what they’ll be facing now is a 50 per cent increase in their rates.”

“We’re excluding individual rooms. This is about people who rent out the whole house.”

Those who lease their properties for less than 60 days a year will also be exempt.