Labour's Housing Spokesperson says the state's new housing plan is just "new wine for old bottles".
The new Land Development Agency's been funded with €1.25 billion to develop state and privately owned land with at least 40% of new homes being delivered as social and affordable.
Deputy Jan O'Sullivan says selling off state-owned land to developers to make a profit is the total opposite of what needs to happen.
"That state-owned land is very precious," said Ms O'Sullivan.
"It would allow the state to build what we urgently need which is both social housing for the hundreds of thousands of people on housing waiting lists and affordable because if you are now working - maybe two people are working in a family earning low to middle income - it is almost impossible to get a mortgage.
"It is almost impossible to afford housing prices in our cities."
The new €1.25bn Land Development Agency (LDA) promises to build 150,000 new homes over the next 20 years.
The Government said strategic land banks from a mix of public and private land will bring essential long-term stability to the housing market.
Today, we are announcing details of the Land Development Agency, which will build 150,000 homes over the next 20 years. This new agency is going to hit the ground running, from today. It’s one of the most significant ever State interventions in the housing market. pic.twitter.com/GD3diPaKA5— Leo Varadkar (@LeoVaradkar) September 13, 2018
The LDA’s main focus will be on buying existing land owned by state departments and selling it to developers to ensure new homes are built quickly.
The body must deliver at least 40% of housing potential on the land, with 10% social and 30% affordable.
To ensure space and funding is available, the agency will be given sweeping compulsory purchase order powers and the right to use and sell state-owned land.
One of the sites understood to be targeted by the agency is the HSE-owned former St Kevin’s Hospital site in Cork City, which was the target of an arson attack in 2017.