It will look at the costs and benefits, with a “go or no-go" decision by the end of the year.
It comes after the PM said the plan to avoid a hard border in Northern Ireland was "anti-democratic".
Prime Minister Boris Johnson described the Irish backstop Brexit plan as "anti-democratic".
Business groups urged the government to act after many firms failed to get a customs number.
Office blocks are also being used to house families as 210,000 children are estimated to be homeless.