The Committee began investigating the Government's housing policies last March following publication of the review of the housing market by economist Kate Barker.
The review, commissioned by the Treasury and ODPM, called for 120,000 additional homes to be built each year to make houses more affordable. This would bring the total house-building to around 260,000 per year.
If such proposals are taken forward, the MPs' report says, "the principal beneficiaries...will be property development companies, whilst the principal loser will be the environment."
The report focuses on the Barker review because it feels "significant work" is being done to implement the review's proposals - in spite of the Government saying it will not respond to them until later this year.
It is the review's proposed changes to the planning system that come in for most criticism. This includes the plan to over-allocate land for development by 20-40%, with the excess being automatically released if market conditions demand it.
These changes would leave the planning system in "a democratic vacuum", the report says, and "would encourage less controlled development, which is exactly what the planning system was set up to prevent."
Such development could greatly affect the south-east environment, the report warns, an area where houses are already supplied water "by an unacceptable and unsustainable abstraction regime".
The report draws attention to the conclusions of a DEFRA study by consultancy Entec into the environmental impacts of housing supply (ENDS Report 354, pp 43-44 ). The study concluded that the housing sector's carbon dioxide emissions could increase by 20% if Barker's proposals were implemented. Waste arisings could increase by 25%.
Entec's findings should be investigated further given the otherwise "inadequate" evidence base for the Government's housing policies, the report says.
It expresses concern, however, that DEFRA wants any further work to use current build rates as the baseline for assessing environmental impacts - a move that would immediately halve Entec's estimated environmental costs.
"We are disappointed not to see set out explicitly in the key requirements for a sustainable community the need to comply with the principles of sustainable development," the report says. "We deplore the absence of any reference to environmental protection, or the need to respect environmental limits."
The only "key requirement" to mention the environment, focuses on providing a "safe and healthy local environment with well-designed...green spaces".
Even if this situation were changed, however, the MPs question whether housebuilders would be able to improve the environmental performance of new buildings.
There is "very little evidence" that the energy efficiency requirements of current building regulations are being met, the report says.
Recent research for the Building Research Establishment concluded that one-third of new homes do not comply with the energy efficiency requirements (ENDS Report 360, pp 13-14 ). An investigation for Aberdeen Council found that 60% of homes failed the regulations.
"We are alarmed by the apparent ease and possible extent of non-compliance with...the building regulations," the report says, before calling on the ODPM to investigate the problem.
Given the shortage of workers in the construction industry - an estimated 76,000 new entrants a year if the Barker review is implemented - the levels of non-compliance can only get worse, it adds.
Last year, the Government's Sustainable Buildings Task Force recommended a code for sustainable buildings be developed to encourage housebuilders to improve the situation. This will not work, though, unless the code is a precursor to stricter building regulations. "A clear timetable for the standards to be met or to be translated into the regulations [is needed]".
On a more ambitious level, the report calls for the Government to reintegrate environmental and planning responsibilities in one Department, as it was in the old Department of the Environment, Transport and the Regions.
"Environmental considerations and sustainable development are central to land use and planning policy and it is inexplicable that responsibility for these areas was separated into different Departments."
This would also end the problem of DEFRA being "sidelined" in relation to housing policy. The Department has not been included in the ODPM and Treasury task force now taking forward the Barker proposals.
Up to 10,000 properties planned for the Thames Gateway could be located in areas at "significant risk" of flooding without proper planning, it adds.