The use of private sector housing will cut waiting times being experienced by thousands of families.
Shelter Scotland said major changes are needed to meet the governments target to end unintentional homelessness.
Speaking at Shelter Scotland's housing conference in Glasgow, Communities Minister Stewart Maxwell said: "We recognise the need to boost housing supply.
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"We are supporting a new generation of council house building, backed by £25m and have proposed a goal to build 35,000 houses a year by the middle of the next decade."
Government plans could lead to legal changes to conditions attached to the use of private houses, including secure tenures, affordability and meeting homeless applicants' support needs.
Gavin Corbett, Head of Policy at Shelter Scotland, said: "The current climate makes the argument for greater public investment in those homes even more compelling."
(GK/JM)
