Social Democrats leader Holly Cairns has warned Government it risks throwing renters "to the wolves" due to its modular homes plans.
The memo from both Minister for Housing James Browne and Minister of State John Cummins, stipulates that the homes must comply with building regulations and standards.
Speaking during the latest Dáil leaders questions debate, Deputy Cairns said it is "outrageous" that Government is pushing ahead with the initiative while telling renters "they should be happy about it".
The Social Democrats leader said "young people are exhausted" by the Coalition's housing plans, saying "they look at this Government with despair, and who can blame them".
Deputy Cairns said while the Coalition insisted last year modular homes in back gardens would not be put up for rent, she said this has in effect happened.
She said the way this is taking place is unacceptable, as the units will be available via licencing agreements rather than under the inspection of the rental tenancies board.
Responding to the criticism, Taoiseach Micheál Martin said he has a "relentless" focus on housing supply, and said in comparison Deputy Cairns argument is "waffle".
He said Government has the "highest record since the State was founded" in terms of new social housing units, and that in the past week he has been at various sod turnings which will lead to the construction of 2,000 new houses and apartments, adding: "Not cabins, real enrichment."
While the Taoiseach said "we're never going to solve it [the housing crisis] by criticising", Deputy Cairns said she was shocked by the "profoundly positive spin" she had just heard.
The Social Democrats leader said more than 5,500 children are currently homeless, before again criticising the "unbelievably positive message" from the Taoiseach and asking: "I have to wonder are you even convinced?"
Deputy Cairns said she wanted a specific answer on whether the Taoiseach is "okay with" people who will live in modular homes not having any rental tenancies board rental rights.
In response, Mr Martin did not give a direct answer, and instead highlighted a number of housing developments voted against by Social Democrats councillors, saying "you just can't keep opposing everything and claim you're serious on housing, choices have to be made".
Meanwhile, Labour's housing spokesperson Conor Sheehan called the plans "entirely unacceptable".
"While there is a need for flexibility in exempted development, this proposal raises serious and urgent questions that Government has failed to answer," he said.
He accused ministers of "pushing ahead with a plan that could fundamentally reshape parts of the rental market without any clarity on standards, oversight, or enforcement".
Mr Sheehan added: "There is a real and pressing concern here about how vulnerable renters will be protected.
I fear a situation where people are effectively forced to live in what amounts to a shed at the bottom of someone's garden, with none of the protections that apply to standard tenancies.
"That is not a housing solution. It is a recipe for disaster."
Full scrutiny of regulations needed, says Sinn Féin
Sinn Féin Spokesperson on Housing Eoin Ó Broin said he is concerned the proposed modular home exemptions are not just for family use, but for private rental stock.
Speaking on RTÉ's Today with David McCullagh, Mr Ó Broin said: "Not only do we have the possibility of the proliferation of large volumes of poor-quality modular units, but the Government is proposing that these people will have no tenancy rights whatsoever, that they will be licensees."
He said he wanted the regulations to be published and for there to be full scrutiny in the Oireachtas Committee on Housing.
"We need to ensure that we do give families the flexibility that they need for their own direct family members, but [that] we do not ... have a return to very, very poor quality high cost accommodation because the Government made a mess of this."
Social Democrats Housing Spokesperson Rory Hearne TD said "hiding a generation in back gardens is not a solution to our housing crisis".
Deputy Hearne said there are "so many flaws in this half-baked plan that it's difficult to know where to start".
"This was initially put forward as an initiative to allow parents provide modular housing units on their properties for family members to live in.
"However, it has now morphed into something completely different - a carte blanche for unscrupulous landlords to build back garden AirBnbs or substandard rental pods.
"There has been a lot of vague talk about safeguards and regulation as part of the Government's plan to allow planning exemptions for modular homes in gardens. But this only raises further questions," he said.
Labour housing spokesman Conor Sheehan said the proposal to rent out such units privately was "entirely unacceptable".
"Yes, I accept that there is a need for more flexibility in relation to exempted development, but we need to see, number one, what is actually being proposed, because this has been flown now like effectively a shed in the wind for over 15 months," he said.
"The Tánaiste is going around the place lately a bit like Larry King.
"He seems to have an opinion and a comment on everything, but we are waiting more than 15 months now for these - we need to see exactly what's in them.
"This hasn't been clearly thought through at all. It's very clear that they're doing this in response to pressure that they're getting from their own backbenchers and from sectoral interests who want to make money."
He said placing garden homes in the Rent-a-Room scheme was "opening the door to exploitation".
"I think, should that happen, you mark my words, we'll all be back here at six months or a year's time where we have some horrendous example of some godforsaken shed in some poor part of the country that's absolutely stacked with people."
