Developers will lose planning permission for large-scale housing projects unless they begin construction within 18 months under a new Government plan.
Minister for Housing Eoghan Murphy will bring proposals for a 'use it or lose it' measure before Cabinet today in response to concerns the strategic housing development (SHD) scheme is not working.
It has emerged construction on two-thirds of homes granted fast-track planning permission has not yet begun.
The measure aims to reduce the potential for developers to hoard sites which have planning permission for large developments in order to increase their sell-on value.
Mr Murphy will also tell ministers he is open to increasing the percentage of commercial or other non-residential uses allowed as part of a SHD planning application from 15pc to 20pc for mixed-use development in urban areas.
The SHD scheme was launched in 2017 as a way to speed up housing construction with developers planning large-scale housing projects of at least 100 homes or 200 students units able to bypass council planners and instead go straight to An Bord Pleanála.
However it has emerged in recent weeks that construction has yet to start on nearly two-thirds of the 15,000 houses and apartments given the go-ahead under the scheme in recent years.
Mr Murphy will tell ministers today he envisages implementing a provision whereby developers in receipt of an SHD planning permission will be required to start a certain level of development works within 18 months of permission being granted, otherwise the permission will lapse.
Mr Murphy will also confirm he plans to extend the scheme by a period of two years until the end of 2021, a plan that was widely expected.
While the scheme can be extended by a ministerial order, Mr Murphy will have to change the law in order to include the 'use it or lose it' provision and the proposal to increase the percentage of commercial or other non- residential allowed as part of an SHD application.
Such legislative changes are likely to be included in the Planning and Development Bill.
The proposed changes to the SHD scheme come on foot of a review group which has been examining how the scheme has been working in recent months.
According to a Department of Housing briefing, the review concluded that there remains an under-supply of housing, particularly in urban areas, and consequently the original justification for the introduction of the SHD arrangements remains.
The scheme has been heavily criticised by Opposition parties.
Fianna Fáil, Sinn Féin and Socialist TDs have said that better-resourced local authority planning departments would have been an equally effective and more democratic approach to delivering housing as swiftly as possible.
Speaking in the Dáil earlier this month, Fianna Fáil leader Micheál Martin said research had shown that the scheme had not worked.
"It seems the scheme has been used to get large-scale planning through with a view to selling it on," he said.
Taoiseach Leo Varadkar defended the policy and said the "intention and the idea behind it was to fast-track the planning system" and therefore to get homes built more quickly.
Mr Varadkar pointed out that Fianna Fáil had supported the proposal and that the latest figures showed that as many as 16,000 homes had received planning permission.
He said that 6,000 were "either built or are being built" but that "there is always a time-lag".
Mr Varadkar added: "It could well be the case that figure of 6,000 could be 7,000, 8,000, 9,000, 10,000 or even higher."
The Irish Planning Institute has also argued that the scheme should be scrapped in favour of providing more funding to local authority planning departments.