Earlier in the year, the Department of Planning Industry and Environment announced a new policy on short term rental accommodation, like Airbnb, that would come into effect from November 1.

Under the new rules, Dubbo Regional Council initially determined there would be a 180-day cap on accommodation if the hose does not reside on the premises.

It was based on complaints from residents about Airbnb properties, concerns about the impact it would have on the city's motels and potential impacts on the housing rental market.

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But that decision has since been reversed by the Dubbo councillors.

Dubbo mayor Stephen Lawrence said the initial decision was prudent and appropriate, but after careful consideration, he believed the cap was not necessary.

"The advice [about the affect on housing] was that it's difficult to quantify a particular impact and in those circumstances where we don't have clear and direct evidence that it will impact on those issues my preference is that we allow the market to operate, we allow people that have been using properties in this way to continue to do so," Cr Lawrence said.

He said short term rental accommodation was an "important part of the housing mix" when it comes to tourism.

"I don't think it's going to have a tangible impact on our housing issues. We're moving to deal with our housing issues in other ways...," Cr Lawrence said.

The short term rental accommodation caps will be introduced in the Greater Sydney area, Ballina, Bega Valley, Byron and Newcastle.

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