The Dáil has passed the Affordable Housing Bill with 101 votes in favour to eight against.
Minister for Housing Darragh O'Brien said the Bill will empower local authorities to build, acquire and make available, homes at prices which are below open market levels.
Despite opposition criticism of the Government's shared equity scheme, the minister said it would bridge the gap between the market value of a home in the private market and what an individual or couple can afford.
The legislation also requires future housing developments to have a 10% minimum social homes and up to a further 10% requirement for affordable homes.
