Housing Minister Eoghan Murphy has said people should be "excited" about co-living and having "less space for less rent".
Mr Murphy told the National Housing Conference at Dublin Castle yesterday that the controversial developments, where tenants have their own en-suite bedroom but share a kitchen and living room, should be welcomed.
"As we all did when we were younger, we sacrificed less space for less rent," he said.
"This isn't about allowing for high-density bedsits, but a new accommodation that's been very successful round the world."
Today's young professionals and students are "a generation with a different approach, that will sacrifice less space for less rent", he added.
"And we must recognise some young people are starting off in their careers, they don't necessarily want to live in a four-bed semi-D, or in the isolation of a flat and co-living has been so well received in London and New York.
"We can work with the public and private sector to bring them into reality. I think people will be very excited by this.
"It's important now to see applications come in to give people an idea of how exciting that kind of development can be," he said.
As revealed in the Irish Independent on Saturday, Mr Murphy announced that he will introduce legislation to stop landlords evicting tenants from their homes after six years without giving a reason. That legislation is due to be drawn up before the end of the year.
Meanwhile, legislation to be brought before the Dáil this week will give tenants more time before they can be evicted.
"The bill we're bringing through the House this week is going to lengthen, triple, quadruple, the length of time you have before you have to leave and the landlord can only do it [evict] under certain conditions," said the minister.
"I've been talking about bringing tenancies in for an indefinite duration.
"I couldn't do it in the current legislation but this will hopefully be finalised in the Seanad this week.
"A second rent bill will be coming in the fourth quarter of this year."
Mr Murphy also said ending "arbitrary" height caps in cities such as Dublin, Galway and Cork could see the creation of much taller buildings to tackle the housing crisis.
However, John O'Hara, city planning officer for Dublin City Council, said: "We need to question the assumption that height, by itself, will solve the housing crisis.
"The evidence from Vancouver and Chicago is that this is not the case, that height will solve the housing crisis.
"You have to make new neighbourhoods that are attractive, that people want to live in, to bring their children up in, to go to school in, to grow old in, so for that reason there has to be a variety (of properties)."
The minister also pledged to introduce affordable housing and shared ownership schemes, but didn't specify any timeframe for these.
"We are now progressing part-ownership and cost-rental models we have seen working in other cities," he said.
"This might not be done in a year or two but it is for the coming years, it's important we get that right and don't make any mistakes and that opportunity is closed to us."
However, speaking outside the conference, David Browne, president of the Royal Institute of the Architects of Ireland, said: "It seems to me there are reasonably straightforward ways to get a shared-ownership scheme up and running in a reasonable near term.
"I would have thought you could probably have one in by the end of the year if the financial resources are there to support it."
The Government has spent €1.2bn throughout the housing crisis buying up almost 7,200 privately built homes, directly competing with first-time buyers in the property market, the Sunday Independent can reveal.