The French government plans to make housing a legally enforceable right, French PM Dominique de Villepin says.
A housing bill will be presented to the cabinet on 17 January, he said, as the government came under renewed pressure to help homeless people.
Squatters have moved into a vacant office block in Paris and also set up a tent city along a canal in the capital.
The office building, near the Paris stock exchange, has been nicknamed the "ministry for the housing crisis".
Three housing lobby groups took it over and then invited families to move in. Homeless Parisians are also camping out in 200 tents by the Canal Saint Martin.
Lobby groups say about a million people in France are homeless, of whom 100,000 are sleeping on the streets.
Under the government plan, from the end of 2008, the right to housing will apply to homeless people, impoverished workers and single mothers.
All those living in slums are to benefit from the same right from the start of 2012, Mr de Villepin said.
The plan entails the construction of 120,000 new homes every year up to 2012.
The new legislation is designed to put housing in the same legal category as education and health in French law. It is a key demand of the campaign groups for the homeless.
Makeshift camps
Homelessness is becoming an election issue ahead of April's presidential poll, with the two main candidates setting out their views.
The conservative candidate, Interior Minister Nicolas Sarkozy, has appointed a lawyer to follow the squatters' case and the Socialist candidate, Segolene Royal, has spoken to a housing advocacy group.
The squatters' campaign is being spearheaded by a group called Les Enfants de Don Quichotte (Children of Don Quixote).
The group has also set up makeshift camps in the southern port city of Marseille, as well as Orleans, Lyon and Toulouse.
France's Le Monde newspaper reports that the occupied office building in central Paris has been vacant since March 2004, but that a sale is due to go ahead on 8 January. A bailiff has ordered the squatters to leave.
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