Local authorities have been criticised for failing to draw down hundreds of millions of euro, which has been made available to help tackle the housing crisis.
The Interim Chairman of the Land Development Agency said Waterford is now the only city in Ireland where a one-bedroom apartment is affordable to rent by someone on the average industrial wage.
Speaking on RTÉ's Morning Ireland, John Moran said a Government fund designed to promote urban regeneration and boost development has had a very low uptake.
Just 5% of the €2bn Urban Regeneration and Development Fund was successfully applied for last year.
Mr Moran said Project Ireland 2040 was designed to address issues such as unaffordable rent, security of tenure and long commutes.
He said the fund was aimed at towns and cities outside of Dublin to "change the way they operate to become more attractive".
Mr Moran said local authorities must "get out of this concept" that building more roads will solve their problems.
He said: "The way that the country needs to develop is that we will have little neighbourhoods, almost like little towns within our cities, where people walk, hop on a bike, an electric scooter.
"So we have to get out of this concept that building more roads will solve the problems we have."
Mr Moran said if you do not ask for the money, you cannot get it, and urged local authorities to "get those plans together now".
"We're talking about cities like Limerick, which is 100,000 people, growing to 150,000 people in, effectively, 20 years.
"That's not going to happen in the 18th, 19th or 20th year, it has to happen quickly and it has to be planned for so that it works across all the agencies, like education, transport, housing or water."
Mr Moran said this was "absolutely critical" for the work of the Land Development Agency.
He said they are supposed to be catalysing about 7,500 homes a year until 2040, but they cannot do that with "different isolated sites".
He said they will need "large tracts of a hundred acres" in downtown areas in towns that they can plan and develop.
