The Taoiseach has said housing shortages will increase the challenges the Government faces with the mica redress scheme.
Micheál Martin said some people will have to seek alternative accommodation while homes affected by the mica scandal are being replaced and repaired.
Defective building blocks containing excessive deposits of the mineral mica have seen thousands of properties start to crumble across the country.
An estimated 5,000 homes in Co Donegal are affected, with thousands more understood to have faulty blocks in counties Sligo, Clare and Limerick.
In November the Government agreed that the mica redress scheme will be capped at €420,000 per home.
Homeowners will be able to receive €145 for the first 1,000 square feet, which will reduce to €110 for the second 1,000 square feet, and the remainder will be set at a rate of €100.
The Government has committed that the scheme will take inflation into account, and the per-foot rate will be reviewed every year.
It is estimated that 7,500 homes will benefit from the revised scheme.
In October, tens of thousands of people from Donegal, Mayo, Sligo and Limerick flooded Dublin to demand the Government covered all the costs for homes that were crumbling due to the defective blocks.
Mr Martin said: “First of all there’s very substantial resources being made available through the mica scheme.
“I think a lot of work still has to be done in terms of that phasing, but there will be challenges, of that there is no doubt, because of the fact that quite a substantial number of houses will have to be refurbished or redone again and some will have to be rebuilt.
“People will have to seek alternative accommodation for a period whilst that work is under way.
“So the resources are provided for both to enable people to rent whilst the houses are rebuilt, but it will be challenging because of the overall shortage of housing in the country and that’s manifest in Donegal.
“We will work with local authorities there and those housing agencies to see what we can do in the interim.
“There’s no super solution to that, we just have to work with people and, if we can, work things through.”
Mr Martin said he did not expect housing shortages to force people to move away from Donegal.
