Private land in towns and cities close to essential services including public transport will be acquired by the State to build affordable homes.
Housing Minister Eoghan Murphy told the National Construction Summit that land used in an "inefficient way" to sell "couches, cars and trucks" could be compulsorily acquired by a new regeneration agency to help boost output.
The summit also highlighted concerns about the capacity of the construction sector to build homes and complete the €116bn investment programme proposed in the National Development Plan (NDP).
Maurice Buckley, chairman of the Office of Public Works, also said there was too much of a "disputes and claims" culture which was delaying projects.
"Everywhere in Government people are very worried as to what impact it (the €116bn NDP spend) will have," he said.
"There's a report on demand for skills up to 2020 and addressing the challenges, and it identified capacity bottlenecks in certain sectors and skills shortages.
"Do we have people trained up to cope with building regulations, especially in SMEs?"
He said the industry needed to upskill to allow companies to compete for major projects, including a €1bn flood defence programme to be built over the next decade.
"There's too much of a disputes and claims culture, especially with the public sector.
"It's delaying things and costing more," he said.
"It won't be tolerated. It's only a handful of companies but collectively we have to get that sorted."
The conference was told that the number of homes under construction and with planning permission has risen, with the Central Bank suggesting 23,000 new homes would be completed this year and 27,000 in 2019.
"These are dramatic increases in what we've seen before. If we are successful in achieving these numbers, it will show Rebuilding Ireland is working," Mr Murphy said.
Affordable units would be delivered by the new National Housing and Regeneration Agency, expected to be formally established later this year, which would identify State-owned sites to deliver affordable homes. It would also, if required, compulsorily acquire private land.
"The State has to become directly involved in our key land banks. That means a regeneration agency for site assembly and new home building. It will also involve private land," Mr Murphy said.
He cited land around the Naas Road in Dublin, which was within the canals, connected to the M50 and close to the Luas.
"All key pieces of infrastructure, but the lands around it are used in a very inefficient way to sell couches, mattresses, cars and trucks," he said.
"This is a key strategic land bank. If we're going to achieve compact growth, if we're going to take advantage of key pieces of infrastructure and face down climate change, we have to take land like that and repurpose it for homes and work places.
"The new regeneration agency will have the mandate to tackle issues like that."