Allerdale Council representatives met in the town, with many local residents looking on.
They turned out to support a motion proposed by ward councillor Markus Campbell-Savours, which also received the backing of the full council in a unanimous vote.
Cllr Campbell-Savours proposed that Allerdale writes to the Government, calling on Westminster to tackle the UK housing crisis - in particular, the surge in holiday lets and second homes which is reducing the number of properties available for families.
Councillors heard that the rise in holiday lets is driving up house prices and making it difficult for first-time buyers to get a foot on the housing ladder.
Steve Harwood, one of the residents who attended, told the Local Democracy Reporting Service: "It's a major issue. Any new property that comes up that doesn't have a condition on it is being snapped up as a holiday let."
Resident Lorraine Taylor asked the meeting: "What does the council intend to do to stop this town from dying?"
Speaking to his motion, Cllr Campbell-Savours said: "Despite the restrictions we face in the National Park, we are blessed with organisations like Keswick Community Housing Trust, who have worked tirelessly over recent years to see new homes built for local families.
"I have huge admiration for the work they have done but feel sad that the work is being undermined by a huge flaw in the system. Currently there are no rules to prevent you or I from buying an open-market property, changing it into a home and then a holiday let.
"For every home we have seen built in the town over recent years, we have seen greater numbers of homes taken out of permanent use and changed into holiday lets.
"But the problem is hard to quantify if there is actually no requirements to register."
Cross party support was given to his motion.
Deputy leader of the Conservative-led council, Marion Fitzgerald, said: "The proliferation of second homes and holiday lets doesn't just affect the housing supply available to local people, it also impacts the community and businesses where there are significant numbers of houses in towns and villages standing empty for large parts of the year."
She recommended acknowledging recent moves from the housing ministry, listing a series of projects to address the housing crisis. Among them was a consultation calling for views on the council tax arrangements for holiday lets.