Cairn Homes and Glenveagh Properties have applied to the High Court to seek a Judicial Review of the new Kildare County Development Plan for 2023 to 2029.
The proposed County Development Plan will reduce the number of homes which can be built in the county to just 9,144.
The current plan, now coming to an end, allowed for 22,272 homes to be built in the last six years.
Cairn and Glenveagh, the country's two biggest homebuilders, said this represents a reduction of 59% on the number of new homes that can be permitted under the new plan at a time of an "unprecedented" housing crisis.
They claim the cut in the number of new homes that could be delivered across all housing types - including social, affordable and private - is as a result of a reliance on out of date Census data from 2016.
"As a consequence, Glenveagh and Cairn believe the plan has materially underestimated Kildare's population growth and its current and future housing needs," the two housebuilders said in a statement today.
Cairn and Glenveagh said the ceiling imposed by Kildare's new plan, similar to the methodology used by Wicklow County Council, is considered premature and potentially damaging as both believe it is based on "flawed and restrictive data", which underestimates housing needs.
Stephen Garvey, the chief executive of Glenveagh Properties, said that as currently proposed, the plan would greatly limit the development of much-needed social and affordable homes in Kildare.
He said that Kildare is a county that has seen unprecedented population growth, significant foreign direct investment, with associated job creation, as well as substantial investments in critical infrastructure by the Government.
"On that basis, we believe it would be remiss of us not to challenge this plan," Stephen Garvey said.
Michael Stanley, the chief executive of Cairn Homes, said that increasing supply in areas where there is a proven need and demand for housing is the only answer to address the country's housing crisis.
"We will continue to be consistent in our approach to challenging these flawed and potentially damaging county development plans," Michael Stanley added.