Oxford residents could be forced out by an influx of Students unless thousands of new flats are built, according to city council planning officers.
They say expansion plans by Oxford and Oxford Brookes Universities will put pressure on the city's limited housing stock.
This will lead to further rent and price rises, putting accommodation out of the reach of more local people, officers claim.
To combat the problem, universities will be allowed to expand only if they house most of their additional students in new purpose-built accommodation.
Land Registry figures show an average house in Oxfordshire now costs £158,865, compared to £145,718 a year ago.
An increase in demand is likely to see prices rise even further.
Planning officers said the expansion of the universities was also likely to lead to an increase in traffic, putting more strain on the city's congested roads.
Both universities predict student numbers will continue to grow by one per cent a year. This will bring more than 3,600 additional students to Oxford University in the next 20 years.
At Oxford Brookes University, this rate of growth will attract an additional 1,826 full-time and 746 part-time students in the next 15 years.
Council planning officers Steve Pickles and Georgina Harrison prepared a report for the council as part of consultation over the its local plan review.
The report said: "While the council recognises the value of students being able to mix with the local community, housing is a scarce commodity in Oxford.
"As such, students accommodating dwellings, which would be suitable for long-term residents of the city, must be limited if not avoided.
Mr Pickles said: "If the universities want to substantially increase student numbers, they need to increase the amount of teaching and administrative space.
"However, we can say no to any growth unless they increase the amount of student accommodation. It is the ultimate sanction and is quite a powerful tool."
"The universities make a major economic contribution to the city. We fully recognise their importance but have to strike a balance.
"Oxford is tightly constrained and we need to accommodate the university without having an adverse impact on city residents and other activities, like shops, businesses and recreation.
"There's a great housing shortage in the city so getting students to live in provided accommodation will reduce pressure on the housing market leaving more housing for local families."
An Oxford University spokesman, said: "We house as many students as we possibly can, but it varies greatly from college to college."
Oxford City councillor Mr Mike Woodin, who holds the council's environment and health portfolio, said: "Oxford is under huge pressure already. A lot of houses in East Oxford and Headington are going for rent to students and we need a lot of houses to rent to people in Oxford.
"Both universities should limit their expansion to the amount of accommodation they provide."
David Kyffin, an Oxfordshire County Councillor and landlord of the King's Arms pub in Holywell Street , Oxford, said: "Oxford is dependent on both universities and students are our bread and butter.
"I can see the argument that expansion would lead to big problems for housing and infrastructure, and that it is like trying to cram a quart into a pint pot. But we have to hope the benefits offset the disadvantages.
"Students bring business to everyone from pubs and take-aways to plumbers, and everyone suffers in the holidays when they have gone."
Mr John Thwaites, the general manager of Blackwell's Bookshop, in Broad Street, Oxford, said: "Without the students, Oxford wouldn't be what it is. We are very happy to serve the university in any way we can.
"Increasing the number of students would be a benefit, but it is important that students have the ability to manage and have the best quality education. Unless there are improvements it could be quite difficult."
Management at Bar Risa and the Jongleurs Comedy Club on Hyth Bridge Street, welcomed plans to boost the city's student population.
Duty manager Mr Duncan Griffin said: "Students are very important to Oxford and increasing their number would be a good thing. It would definitely benefit everyone in the retail trade."
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