Homeless families will no longer be prioritised over other people on the social housing waiting list.
Dublin City Council plans to end the practice to prevent long stays in emergency accommodation.
Instead, it will encourage families to use the housing assistance payment to pay a landlord in the private rented sector.
It follows controversial claims by the head of the Housing Agency that some homeless families were 'gaming the system' in order to jump the social housing waiting list.
Homeless campaigner Fr Peter McVerry told Newstalk Breakfast the latest decision is an indictment of the housing system.
"Many homeless families have come from the private rented sector - they've been evicted for a variety of different reasons.
"And now Dublin City Council is telling them 'you've got to go back into the private rented sector if you want to get permanent accommodation".
"They don't want to go back into the private rented sector because there's no security of tenure - they don't have any permanence there.
"So that's why they want a council house - and because council housing in such short supply, low-income families are now competing with each other to get the few social houses that become available".
