The dismantling of the Housing Executive signals the privatisation of accommodation for those in need and could lead to rent increases, union leaders said.
The 40-year-old body provides social housing let at low rents and on a secure basis to people on low incomes and benefits. It has faced controversy over the handling of maintenance contracts and underwent extensive change at the top of the organisation.
Social Development Minister Nelson McCausland has announced plans to scrap the Executive and said an independent rent panel would agree rent levels, understood to be within a framework set by the minister to ensure affordability.
Irish Congress of Trade Unions Northern Ireland deputy secretary Brian Campfield, who represents many Housing Executive employees, claimed the minister wanted to split up the Executive due to chronic lack of public investment.
"This has lead to a situation were in order to maintain the current stock and build new social housing effectively the NIHE as a landlord will cease under these proposals to be the landlord which will be handed over to other bodies out with the public sector," he said.
"This is effectively privatisation of social housing in Northern Ireland."
He pointed out that many of the Executive's tenants were on housing benefit (and would enjoy a degree of protection) but cited higher rents charged by some housing associations.
Rent levels at the Executive are set by Minister McCausland below those levied by housing associations, which fill much of the demand for low-cost properties and use the profits to build new homes or maintain existing stock.
Mr McCausland said the Executive was no longer sustainable and did not make the best use of public money. He proposed major reforms including a new regional housing body.
The DSD would be responsible for overall strategy, regulation and inspection. A regional housing body would deliver regional services and programmes while the landlord function would be removed from the public sector to allow access to private funding to allow for suitable investment. The minister said: ""These proposals set out a compelling and sustainable vision for new structures to support the future development and delivery of social housing in Northern Ireland."