"The issue in Bagenalstown is we've fallen so far behind Tullow in private builds," said Cllr Arthur McDonald at the September meeting of Bagenalstown Municipal District.
Cllr McDonald claimed that the lack of private builds is "putting pressure on the local authority" to provide housing.
Cllr Willie Quinn said there is "not enough in the market as developers are not getting enough out of it as the margins are too tight".
"When Brexit comes it'll be a major problem too," he added.
Subscribe or register today to discover more from DonegalLive.ie
Buy the e-paper of the Donegal Democrat, Donegal People's Press, Donegal Post and Inish Times here for instant access to Donegal's premier news titles.
Keep up with the latest news from Donegal with our daily newsletter featuring the most important stories of the day delivered to your inbox every evening at 5pm.