The group reviewing the Government's fast-track planning system has criticised the lack of construction on the projects approved under the scheme.
As part of their review, the group claimed the level of construction is "less than might have been expected" and recommended a series of changes to motivate further activity.
Developers granted planning permission for large-scale housing projects under the scheme will now have just 18 months to commence work.
The 'use it or lose it' clause is just one of several changes which will be made to the Strategic Housing Development (SHD) scheme as part of the extension of the legislation.
Housing Minister Eoghan Murphy is to sign off on the changes before the end of 2019, with the scheme now to be extended until 2021.
The scheme, administered by An Bord Pleanála, has been in place since July 2017. It was introduced to motivate the construction of large-scale housing projects, with developments of more than 100 housing units or apartments or 200 student beds submitted directly to An Bord Pleanála to accelerate the planning process.
However, it came under scrutiny in recent weeks due to the relatively low number of projects commencing after receiving permission.
The review group comprised of John Martin, former Principal Planning Adviser, DHPLG, Review Group Chair; David Silke, Director of Research and Corporate Affairs, Housing Agency; David O’Connor, former Chief Executive, Fingal County Council; and Liam Conneally, Director of Services, Clare County Council.
SHD arrangements have "generally been a success" in accelerating the granting of planning permission, the group wrote in their final report.
"At the time the report was finalised, the Board had granted permission for a total of 12,339 housing units (houses and apartments) and 7,573 student bed spaces," the group wrote.
However, they added this has not resulted in commencements in many cases.
"The number of SHD permissions that have commenced development is less than might have been expected, given the public resources put into the arrangements and the benefits provided for developers in terms of time-savings and consistency of decision making," they said.
"The Review Group highlights that, of the 49 SHD permissions granted between January 2018 and 30 June 2019, only 18 (37%) had been activated in some way, either through enabling works or commencement of housing construction."
As such, they recommended the introduction of a 'use-it-or-lose-it' clause, requiring a certain degree of work to commence within 18 months of granting planning.
They also advised doubling the threshold for residential developments from 100 to 200 units, increasing the volume of space which can be used for commercial developments within the projects, and extending the consultation and decision time from 16 to 18 weeks to allow more input from the public.
In his conclusions, the Minister said a significant number of large-scale housing developments were being slowed for "up to two years" due to appeals.
While the Minister agreed with the introduction of the 'use-it-or-lose-it' clause and the increase of commercial space in developments, he rejected suggestions to double the threshold, claiming it would lead to confusion, and to extend the time-frame for public consultation.
The Minister will sign an order to implement the changes before the end of the year.