He warned that the status quo is not an option and that housing associations must adapt with radical thinking and bold new ideas to support the increased supply of affordable homes.
The Minister highlighted examples of good practice by housing associations including securing investment from wider sources such as the European Investment Bank, which gives housing associations access to another, competitively priced source of lending.
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And he pointed to how housing associations have embraced the National Housing Trust initiative, which aims to support around 1000 new affordable homes for intermediate rent.
Over the next 25 years, the number of households in Scotland is projected to increase by more than a fifth to 2.8 million - an average of an additional 19,000 households per year.
In Glasgow, addressing the Scottish Federation of Housing Associations annual conference, Alex Neil said: "The trail of destruction left by the UK Government's planned 80 billion a year spending cuts means that next year, Scotland's housing sector faces the stark prospect of a reduction in funding for low cost homes.
"Housing Associations are already developing fresh thinking and are actively involved in new funding models such as the National Housing Trust, and securing finance from new sources such as the European Investment Bank.
"In May, The Scottish Government published a discussion document, Housing: Fresh Thinking, New Ideas, which poses fundamental questions about the way homes can be built, allocated, funded and managed.
"It is therefore in the interest of every housing association in Scotland to join that debate and help shape the future direction of our housing system."
(GK)
