Private letting agents are being offered "placement fees" of €500 by Dublin's local authorities in return for renting properties to homeless families.

The Institute of Professional Auctioneers and Valuers said the offer, which has been made in recent weeks to agents, could be considered a conflict of interest if members were already contracted by landlords to rent a property on their behalf.

RTÉ's Morning Ireland has learned that agents have been approached by council staff and advised that they will be paid a fee once a HAP tenant moves in to a property.

In a statement, the Dublin Region Homeless Executive said the move was designed to secure more HAP tenancies.

It said: "When an estate agent makes suitable properties exclusively available to homeless families, which includes not advertising them on letting websites and not holding open viewings, then when the agent has given five properties, the DRHE will pay the agent €500 per property plus VAT following the submission of a proper invoice."

The DRHE added that it accepts that its involvement in the private rental sector is distorting the market but that "there is no alternative until the supply of social housing increases sufficiently to allow us to reduce that reliance".

Under the HAP scheme the local authority commits to pay up to 87% of the rent to the landlord on behalf of the State.

The Irish Property Owners' Association has called for the immediate removal of the placement fees.

Margaret McCormick, Information Officers with the IPOA said: "It is a totally unacceptable situation. The landlord employs the agent and the agent works for the landlord. This is a trust issue."

"Placement fees should not be paid and should be removed from the market immediately."

Patrick Davitt, CEO of the Institute of Professional Auctioneers and Valuers, said: "We want to support HAP, there is no problem there.

"It is a very good social incentive, but if you are receiving a fee from two different parties that's a different thing altogether.

"Some agents don't like it and they wouldn't take part in it without telling their landlords. Anyone that does would leave themselves open to a complaint to the PSRA or the professional institutes."

Fianna Fáil spokesperson on housing Darragh O'Brien said he was "massively taken aback" on learning of the approach.

He said: "They haven't told anyone about it. At the Oireachtas Housing Committee it hasn't been mentioned to us. We want to house families that are homeless. Is this the right way to do it?

"It has potentially an unintended consequence of pitching one type of tenant against another. The real issue here is the lack of supply and a lack of a permanent solution to our housing crisis."

The Minister for Housing said: "We need to do everything thing we can to get families out of crisis". 

Eoghan Murphy said if the DRHE had solutions they can work with - landlords and letting agents that can prevent families from entering into emergency accommodation - then those opportunities should be pursued. 

Asked if the practice was skewing the rental market, he said we have to prioritise the most vulnerable.