London First, which speaks for businesses in the capital, said Mr Khan’s proposed Homes for Londoners (HfL) body should be interventionist rather than merely strategic.
It would both buy land and use its compulsory purchase powers to assemble sites for housebuilding.
In a report published with law firm Dentons, London First said HfL’s primary role should be getting public land ready for development.
Where practical, it would set acceptable density levels and clear requirements about the mix of tenures and affordable homes sought for sites it owns or has assembled.
HfL would try to increase the value of sites it owned by buying adjacent privately-owned land where this would enable it to create scale for development.
Securing a pipeline of developable land in this way would give Mr Khan direct influence over housebuilding and increase the speed of delivery, the report argued.
Achiveing a significnat increase in housebuilding output would need ”a muscular approach to delivery and strong political will”, the report noted.
It pointed to the urgency of building more homes in a city where the average price is now some £530,000 and where only 27,819 homes were built in 2014-15 – against a target of 49,000 a year – with demand set to increase with London’s population projected to hit 10m in the 2030s.
London First housing director Jonathan Seager said: “London must double its rate of housebuilding if it is to adequately house a growing population and keep the city competitive.
“The mayor has both the convening legitimacy and a set of powers and resources, which complement those of the boroughs, to help get more homes built.”
In his election campaign, Mr Khan said he would “deliver more affordable homes, ‘first dibs’ on those homes for Londoners, and action on rents”, with HfL created to fast-track the building of affordable homes to rent and buy.
He also set a target for 50% of all new homes in London to be affordable, but has since said this would be only a long term goal.
London’s deputy mayor for housing James Murray, said: “The Mayor has been clear that fixing London’s housing crisis and getting to grips with the mess that has been left behind by his predecessor will be a marathon, not a sprint.
“We have started to work with local authorities, developers, housing associations and others to get building the new homes that Londoners so desperately need – including those on public land within the Mayor’s control.
He added: “We are working closely with London First, and very much welcome the suggestions in their report about setting up ‘Homes for Londoners’.
”Many of the ideas in the report are in line with plans we have been taking forward since the election, and we will continue to work with London First as we take our proposals forward.”
