Threshold's annual report shows that over 20,000 people contacted the charity last year with a housing problem.
The charity said the issue of deposit retention has become more acute in recent years because many landlords are facing financial difficulties.
The report found that the problem of poor standards is due to a shortage in the amount of accommodation and the rising cost of rents.
The most common problems reported included broken heating systems, poor ventilation and dampness.
Threshold said that city and county councils are obliged to inspect rented properties to enforce minimum standards legislation - but it 40% of local authorities are unaware of their responsibilities.
Threshold chairperson Aideen Hayden said there is evidence that local authorities are to blame for the persistence of sub standard accommodation being offered.
Speaking on RTÉ’s Morning Ireland, she said: "€24 million between 2005 and 2012 was handed over by the Department of the Environment to local authorities to carry out inspections of rented properties.
"The fact that a significant number of them, over the last few years, carried out no inspections at all is not good enough."
Senator Hayden said Threshold has again called for a NCT-type inspection for rented accommodation to be introduced.
"Before a landlord is entitled by law to rent a property it should be certified as fit for purpose.
"In the way that you walk into restaurant and know that you are protected, you drive a car that has an NCT, you have a rented property that has a certificate to say it is fit for purpose."