A Geylang apartment which caught fire, killing two workers, last Friday was an unauthorised dormitory.
"The residential unit does not have the Urban Redevelopment Authority's planning permission to be used as workers' dormitories," said a URA spokesman.
"We do not allow such (private) residential properties to be used as workers' dormitories to accommodate more than eight occupants."
The URA said offenders may be fined up to $200,000.
The URA, which sets rules on renting of private homes, said it is jointly investigating the fire with the police, Singapore Civil Defence Force (SCDF) and Manpower Ministry (MOM).
The second-floor, walk-up apartment at Lorong 6 Geylang, where the fire broke out, was believed to have housed over 30 foreign workers.
Its owners - a Singaporean couple who wanted to be known only as Mr and Mrs Bala - said they had rented out their apartment to a master tenant, whom they declined to name, and the tenancy agreement had capped the tenants at "eight or 10".
Two construction workers from Bangladesh - Mr Mamun Abdullah, 22 and Mr Hosen Ali, 20 - died in the blaze. Three other workers were injured.
The incident occurred just months after another fire in Lorong 4 Geylang killed four foreign workers in December. That was at another walk-up apartment barely 200m away.
The URA told The Straits Times it takes a serious view of unauthorised dormitories.
It said it investigated 2,500 cases of unauthorised use of private residential properties last year, up from 2,100 in 2013 and 1,800 in 2012, but did not provide a more detailed breakdown.
It has probed 180 cases of alleged unauthorised workers' dormitories in Geylang since December, it added.
On the fire last December, the URA said it had completed a joint investigation with the police, SCDF and MOM.
The government agencies have recommended to the Attorney-General's Chambers (AGC) for the "persons responsible" to be jointly prosecuted, said the URA without giving details.
When contacted, the AGC confirmed it had received the investigation report and was reviewing the case.
Labour MP Yeo Guat Kwang, chairman of foreign worker advocacy group Migrant Workers' Centre, hit out at employers who cut corners on housing.
"It is clearly the employers' responsibility to provide proper housing for their foreign workers. They have a legal obligation to do so," said Mr Yeo.
"They cannot say 'I don't know'."