More than 800,000 new homes need to be built in London by 2021 to keep up with housing demand, according to the body that represents the capital's councils.
London Councils, which represents 33 local authorities, said London's "future status as a global city" was at risk if the homes were not built.
A spokesman said costs for the London economy would continue to spiral if the demand was not meant.
London's population is expected to top nine million by 2021, he said.'A scandal'
According to London Councils' analysis of housing statistics from the Department for Communities and Local Government (DCLG) and Greater London Authority, 526,000 new homes are needed to be built between 2011 and 2021 in London just to keep up with current housing demand.
End Quote Sir Steve Bullock London Councils' Executive Member for Housing
More working families will struggle to rent and to buy, more people could be forced out of the capital and homelessness is very likely to go up"
A further 283,000 homes would also need to be built to meet both new demand and the backlog of housing need in London, it said.
However, according to London Councils' research, only 250,000 homes will be built on current projections.
Sir Steve Bullock, London Councils' Executive Member for Housing and the mayor of Lewisham, said: "The news that London needs almost a million homes by 2021 is a scandal - the last time we faced such an acute housing supply crisis was after the Second World War. This is a long time coming and the capital's future prosperity is on the line.
"Rising housing costs are not only a problem for those struggling to rent but for any Londoner wishing to buy their own home.
"If the housing crisis is not solved, costs for the London economy will continue to spiral. More working families will struggle to rent and to buy, more people could be forced out of the capital and homelessness is very likely to go up."Boost supply
London Councils has suggested a number of policies to boost housing supply including lifting the "housing borrowing cap" which prevents councils investing in housing.
Other policies include increasing investment in the rental sector, supporting smaller scale builders, and promoting sustainable development near London's Tube and rail network.
In February London Mayor Boris Johnson said all stamp duty on property sold in the capital should be retained by London and not go to central government, to help build the new homes it "desperately needs."
He said: "If we do not come up with a new plan to build the homes we need, this great city will suffer and the whole country will feel the consequences."
A spokesman for the Department for Communities and Local Government said builders, investors and local councils were being encouraged to increase the supply of both new-builds and repurposed empty homes.
"A number of schemes are in place covering England to help create more homes such as an investment fund for developers to help build homes on development sites that have stalled," he said.
"We've introduced the New Homes bonus, which is a grant to local councils for increasing the number of homes and their use and we're offering new loan guarantees for housing developers."