Cr Allan Smith advocated the development type as an answer to revitalising the centre of the city at a Dubbo City Council meeting on Monday.

His colleagues supported the motion he brought forward, resolving the council "take the necessary action to promote the opportunities for residential accommodation within and adjoining the Dubbo central business district".

Cr Smith's target audiences for the message included both developers and the community.

He said if developers thought there was "a buck in it" they would proceed.

The councillor brought the matter forward this month after discussion in previous meetings about the state of the commercial zone and measures that could be taken to strengthen it.

"It's timely that I bring this forward, I note we've had some discussion in past months... (to) try to revitalise and make sure our city has a heart," Cr Smith said.

He recalled "that some years ago" in downtown Dubbo every bank had a residence above it and hotels were also the home of their operators.

Cr Smith said they as a council had not promoted the opportunities as much as they could have.

"Shop-top housing development allows that kind of development to come back," he said.

Cr Ben Shields supported the motion, saying it ticked a number of boxes.

He said the CBD needed some work and that it would soon face further competition from other retail developments in the city.

Residential growth could also make the area safer at night, Cr Shields said.

"(At the moment) it attracts the crooks because no one is around," he said.

"I can't support this any more passionately than I am."

The motion was carried unanimously.

The Dubbo Local Environmental Plan 2011 lays out the aims and uses of the commercial core zone.

Shop-top housing is permitted with consent but residential accommodation is listed among the prohibited uses.